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Segment posts record growth in Mississippi this past decade

Robust economy boosts primary metal markets

Primary metals, an often overlooked but very important segment of the manufacturing industry, posted record growth in Mississippi in the mid-1990s, significantly contributing to the state’s economy.

In the same study conducted by the U.S. Department of Commerce that recently reported Mississippi led all states in growth of service businesses, comparative statistics showed the largest percentage increase from 1992 to 1997 in shipments, paid employees and annual payroll all came in primary metal industries, where shipments were up 65%, number of employees increased 42% and payroll rose 60%.

“Primary metals is an often overlooked economic sector because the final product usually is not something you can see — like a sofa at a retail store,” said Jerry McBride, MMA president. “When you talk about various primary metal industries, these people are making materials that become part of some other manufactured product.”

Many of MMA’s primary metal members have undergone substantial growth lately, such as Heatcraft in Grenada. Since beginning with a heat transfer division in 1954, Heatcraft, a wholly-owned subsidiary of Lennox International, has expanded to three manufacturing facilities with more than 2,700 workers and over 1.5 million square feet of manufacturing space in Grenada, contributing more than $50 million annually to the local economy through wages and purchases from local businesses.

“Metal members, spread all across the state, are a major portion of MMA’s membership,” McBride said.

Between 1992 and 1997, Mississippi reported $40.6 million in overall shipping value, reflecting a 23.6% increase, and employed 234,764 in manufacturing jobs. But in SIC33, primary metal industries, Mississippi listed 43 establishments, posting only a 2.4% increase, but shipped $1.3 million in goods for a 65% increase. Metal manufacturing plants employed 5,809 workers.

“Increase in demand, growth in market share, and growth in recyclability because of consumer awareness and environmental concerns, have contributed to the growth rate,” said Pierre Langevin, plant manager of Alcan Cable in Bay St. Louis.

“As a whole, our industry is going into new markets, like the aviation market, a stronger market now than many years ago, and the automotive market, where 10 years ago, there was not as much aluminum as there is in cars today,” he said. “For example, the Oldsmobile Aurora has in excess of 400 to 500 pounds of aluminum as part of its body structure. Car manufacturers are moving in that direction because it’s a light metal, saves on energy and fuel consumption, and in most cases, provides better protection in impacts than anything else.”

Gary Downer, Birmingham Steel plant manager in Jackson, attributed the growth rate to the robust economy.

“The building industry has taken off. Most of the products we sell, such as rebar that goes into highway infrastructure and merchant materials, much of which goes into steel building construction, have sold well.”

Birmingham Steel, owner and operator of facilities in the mini-mill sector of the steel industry, with equity interests in scrap collection and processing operations located in the U. S. and Canada, producer of semi-finished steel billets, reinforcing bars and merchant products such as rounds, flats, squares, strips, angles and channels, with 2,127 employees as of last June, has struggled a bit with profitability, Downer said.

“We’ve experienced start-up problems at other plant locations — problems which are now being corrected — and imported steel prices have taken a toll on our business, but the overall outlook is positive,” he said.

Langevin said even though there was no significant increase in the number of employees or shipments, payroll is up at the Gulf Coast plant that has been operating 24 hours a day, seven days a week since 1984.

“We’ve been able to sustain a very stable environment and, as a result, our people are getting raises and bonuses,” he said.

Alcan Cable is a subsidiary of Alcan Aluminum Limited, a Canadian corporation established in 1902, and parent company of an international group involved in all areas of the aluminum industry. With operations and sales offices in over 30 countries, it is a leading producer of primary metal and a global producer and marketer of rolled aluminum products.

“As a corporation, in 1995, we had a whole stream of businesses that we felt no longer were relevant to our main core of business and we divested these businesses, which showed a sharp increase in revenue from $7.6 billion to $9.4 billion, then dropping back to $7.6 billion, only because we let go of some of those businesses,” he said. “When you look at metal, the same story is there. We went from a total aluminum shipment of 2.4 billion to almost three billion tons of metal, then it dropped off again. Even with all of this activity, business has grown about 25%.”

Contact MBJ contributing writer Lynne Wilbanks Jeter at lwjeter@yahoo.com or (601) 853-3967.

About Lynne W. Jeter

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