Nucor sets expansion decision by end of 2015
The Advocate | 3/9/2014
CONVENT — A $750 million plant that began manufacturing direct reduced iron Dec. 24 already leads all other competitors, according to the man who wears the three largest hats for the plant’s corporate owner.
“This is the largest DRI plant operating anywhere in the world,” said John Ferriola, Nucor Corp.’s chairman, president and chief executive officer, on Thursday at the plant near the Mississippi River in St. James Parish.
At a dedication of the plant Monday, Gov. Bobby Jindal said Nucor expects to decide by the end of 2015 whether to build four additional phases that would increase its investment at Convent to $3.4 billion.
“You can’t find better workers than they found right here in Louisiana,” Jindal said.
Jindal noted the plant already employs 140 full-time workers and is expected to add at least 10 more this year.
The governor said 500 construction workers built the facility, about 30 miles south of Baton Rouge and about 60 miles north of New Orleans.
Ferriola described DRI as a raw material used to make high-quality feedstock for steel production. The Nucor plant at Convent subjects iron ore from Brazil, Canada and Norway to natural gas at extremely high temperatures to produce 2.5 million tons of iron pellets annually. Those pellets then are shipped to Nucor’s steel plants across the nation for the manufacture of steel products.
“We believe in America,” Ferriola said. “We believe in the American worker.”
The president and chief executive officer of Greater New Orleans Inc. Michael Hecht, said in a written statement: “Nucor is the archetype for industrial expansion in Louisiana — a great company, making a large investment, with the long-term commitment of the entire region and state.”
In Convent, the human resources director for St. James Parish, Michelle Nailor-Octave, thanked Nucor for help in “building a community that we can all live in, grow in and be proud of.”
Louisiana’s low-cost natural gas supplies were a major factor in Nucor’s decision to build the plant in St. James Parish, Ferriola said.
“Louisiana has done a great job of taking advantage of the natural gas renaissance,” Nucor’s leader said.
Imported DRI has two drawbacks, Ferriola said.
“It’s expensive, and it’s time-consuming,” Ferriola said.
If Nucor decides to go forward with its additional phases, full-time employment could expand to 1,250 at an average annual salary of more than $75,000 plus benefits.
The additional phases would include construction of a second DRI facility for $400 million; a $500 million pellet plant; a $1 billion blast furnace and $750 million steel mill.
The Louisiana Department of Economic Development estimates completion of all five phases would result in 4,800 new indirect jobs, for a total of more than 6,000 new jobs.
“Our DRI plant represents a major milestone for our company and for American manufacturing,” Ferriola added.
“This project is a key part of our strategy to produce more of our own raw materials in order to better control costs and maintain our competitive advantage in the global steel industry.”
Jindal said the state looks forward to working with Nucor on its future phases.
To secure the project, the state’s economic development department offered an incentive package to Nucor, including performance-based financial assistance that totals $160 million over about six years. All of those incentives, however, are provided only if all five phases are started as scheduled in the company’s agreement with the state.
Nucor also is using a federal Gulf Opportunity Zone bond allocation of $600 million, which the company will be responsible for repaying, and Nucor will use the state’s Quality Jobs Program.
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