Louisiana Gov. Bobby Jindal and Benteler Steel/Tube CEO Matthias Jaeger announced a $900-million, two-phase facility that will include both a seamless steel tube mill (phase one) and a steel mill (phase two). The project will be built on 330 acres at The Port of Caddo-Bossier, where Benteler will create 675 new direct jobs paying an average annual salary of $50,000, plus benefits. The facility will be one of the largest manufacturing projects in Northwest Louisiana’s history.
An economic-impact analysis performed by Louisiana State University (LSU) indicates that the Benteler project will have a huge impact on Northwest Louisiana. Specifically, LSU estimates that the 675-job project will lead to the creation of approximately 1,540 new indirect jobs, resulting in a total of more than 2,200 new, permanent jobs in the area as a result of the project. Additionally, during the term of Benteler’s contract with LED, which runs through 2035, LSU estimates that the project will result in total new earnings of $2.7 billion (approximately $150 million per year at full employment) in Northwest Louisiana and a total, cumulative economic impact of $16.2 billion in the region.
Gov. Jindal said, “This is a huge win for our state as it will be one of the largest industrial projects in the history of Northwest Louisiana that will change the face of this area’s economy.”
Benteler Steel/Tube GmbH, based in Paderborn, Germany, has decades of experience in the development, production and sale of seamless hot-rolled and seamless cold-drawn steel tubes. The company is a business unit of privately held Benteler International AG, which is based in Salzburg, Austria. The seamless steel tubes produced by the facility will be used for the exploration and transportation of oil and gas, as well as for the generation of power and mechanical applications. Currently, seamless steel tube facilities of various manufacturers in North America are concentrated in Alabama, Ohio, Pennsylvania and Mexico. The output of the new facility at the port primarily will be destined for locations in Illinois, Indiana, Ohio and Texas.
“We are pleased to select Louisiana as the site for Benteler Steel/Tube’s first U.S. production plant,” Jaeger said. “
Benteler’s analysis of Oil Country Tubular Goods (OCTG) markets in the U.S. shows strong demand through 2035 as the nation reduces energy imports and increases domestic production.
To secure the project, LED offered Benteler a customized incentive package that includes performance-based grants totaling $57.4 million to reimburse site development, infrastructure and equipment costs incurred by the port and the company over the next few years of construction and operations; a performance-based grant of $12.75 million to reimburse certain relocation and internal training expenses; and the development of a new training facility and specialized equipment focused on manufacturing technology to be built on the campus of the Bossier Parish Community College.
The Red River Waterway Commission will contribute $6 million, The Port of Caddo-Bossier will contribute $3 million, and the Caddo Parish Commission will contribute $2.6 million, all for infrastructure improvements at the port required to support the new facility.
In addition, Benteler Steel/Tube Manufacturing Corp., the U.S. entity operating the Shreveport site, will receive the services of LED FastStart™ – ranked the No. 1 state workforce-training program in the nation. The company also is expected to utilize Louisiana’s Quality Jobs and Industrial Tax Exemption incentive programs.
The new training center initially will focus on meeting the training needs of Benteler, once these initial needs have been met, the facility will serve the broader needs of growing manufacturers throughout the region. The total value of the new training center will be approximately $22 million, including land, infrastructure, building and equipment. The Greater Bossier Economic Development Foundation, the City of Bossier City and the Bossier Parish Police Jury will contribute a combined $1 million, of the $22 million total, to provide road and other infrastructure improvements needed for the new training center.
Benteler will begin construction of the first phase of the plant in 2013, and the project will create more than 1,000 construction jobs. The first tubular mill phase of Benteler’s Shreveport complex is expected to be completed in the second half of 2015, followed by the opening of a steel production mill within the next four years. The bulk of the full-time employee hiring for the first phase of the project is anticipated to occur in 2014. Together the two phases of this project will be 1.35 million sq-ft in size.