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Construction of $880M SeverCorr project leading economic boom

Former Columbus Mayor Jeffrey Rupp doesn’t want it to seem like he’s gloating. After all, other areas of the Magnolia State are experiencing some tough times with layoffs in manufacturing, but in Columbus, the $880-million SeverCorr steel mill under construction is just one of a number of expansion projects leading an economic development boom in the Golden Triangle.

“The sales tax collections have already gone through the roof,” said Rupp, who resigned recently to take a position as director of community and government affairs at Mississippi State University. “We are experiencing a double-digit increase right now. How much is directly attributed to SeverCorr, I don’t know. But there is obviously a correlation. Sales taxes are up in Starkville, too, so you are seeing an impact throughout the Golden Triangle.”

In addition to SeverCorr, Rupp said the region has been buoyed by a new major contract with the U.S. Army for Eurocopter worth millions, expansions at Aurora Flight the military and a new Baldor Motors expansion that has added 100 jobs.

“It is quite a windfall,” Rupp said.
Rupp attributed all the growth to good teamwork from local political and economic development leaders who have received a great deal of help from the state, Gov. Haley Barbour, and the state’s congressional delegation.

Joe Higgins, CEO of the Columbus Lowndes Development Link, said the impact from the SeverCorr project is being seen not just in Columbus but the entire region. With payroll estimated at $5 million per week, there is a lot of spending going on that has increased local sales tax collections.

“These people are consumers,” Higgins said. “They are eating out a lot. They are getting a big check, and they are spending a big portion of that locally in the area. Hotels report their occupancy percentages are significantly higher than in the past. We’re feeling it, and feeling it in a good way.”

Currently, there are about 825 construction workers at the site of the nation’s first new steel mill cons constructed in many years. Mike Wagner, chief commercial officer for SeverCorr, said the number of workers will double over the three or four months to somewhere between 1,600 and 2,000 workers.

“The contractors are not having any problems hiring workers,” Wagner said. “We are seeing people from the Coast who have come up, and people locally who have hired on. These are not SeverCorr employees. They work for the contractors. We haven’t heard anything where the contractors haven’t been able to get workers. The nice thing is it is a long-term project. Many construction projects are short term. But if people want to sign up and have continual work, they can be here six, nine, 12 months or longer.”

Construction began in October 2005 and is expected to be completed in October 2007. The contractor for the preliminary excavation and clearing of the land has been Eutaw Construction from Aberdeen. Wagner said most of the excavation is done, and now steel is being erected for the facility that will have 26 acres under roof on the 1,400-acre site.

“When we are all done, Eutaw will have moved seven million yards of dirt,” Wagner said. “We will have poured 130,000 yards of concrete from our own concrete batch plant located on site. We are erecting 28,000 tons of structural steel for the buildings. We are at different phases of erection of the steel. For the finishing mill operation, we are putting siding and the roof on the buildings. We are starting erection of the structural steel building, the melt shop, the finishing mill, and the hot mill.”

When in full production, SeverCorr is expected to employ 450 people at the plant that can produce 1.5 million tons of flat rolled steel annually.

SeverCorr has been committed to helping the local economy by spending locally, Wagner said. Everything from printing to maintenance items is purchased locally as much as possible.

The mill has already had a ripple effect with economic development. It was recently announced that Kenwal Steel Corporation has agreed to build a downstream processing and distribution facility next to the SeverCorr plant.

“When we decided to build a next-generation steel mill, we also decided to create next-generation relationships with the downstream channel,” Wagner said. “So we selected a site with room for partners to build processing and distribution facilities. We are pleased to welcome Kenwal as one of our first neighbors.”

Kenwal, based in Dearborn, Mich., is a full-service steel processing company that provides a wide range of flat rolled steel products and services to various industries, including automotive, electronics, appliance, tubing, major equipment manufacturers and other steel-related businesses. The company says its new facility in Columbus will feature state-of-the-art, surface-critical slitting and packaging systems with a broad range of coil-to-coil processing capabilities. The facility is scheduled to become operational in the late spring of 2007.

Kenneth Eisenberg, chairman and CEO of Kenwal, said they are already serving customers in the South, and SeverCorr’s new plant in Columbus made this an opportunity that was “just too good to miss.”
“SeverCorr’s commitment to building a tightly-integrated working relationship with their mill operations will provide a new level of service to our steel customers,” Eisenberg said.

About 70 people are expected to be employed at the 140,000-square-foot facility that will be Kenwal’s first plant in the South.

Wagner said Kenwal is just the first of many customers or vendors expected to locate near the new steel mill.
SeverCorr will have a huge impact on local port operations. Lowndes County Port Authority director John Hardy said right now it handles about 585,000 tons annually.

“I expect with SeverCorr we could be looking at 400,000 tons the first year and 600,000 tons the second year,” Hardy said. “It could double what we handle easily. We are looking at infrastructure improvements, some crane upgrades, maybe a new dock — in the range of $2 million in port improvements. We are looking at the possibly of a barge mooring area, a federal project that would cost about $4 million, for 30 barges.”

Hardy estimates that about 50 additional jobs will be created at the port in order to serve the SeverCorr project. The port is across the Tennessee-Tombigbee Waterway from the SeverCorr site. Hardy said the port is considering buying 50 acres from the Corps of Engineers on the west side of the river where SeverCorr is located in order to put in a port facility dedicated to the steel mill.

“For the past year, we have tried to plan and get financing for improvements that would let us be competitive to handle their tonnage, and that is what we want to be able to do,” Hardy said. “We are buying the land to have it available for a dedicated port down the road, as growth is expected to increase in the future.”

The port is currently seeing additional activity from SeverCorr through the shipment of machinery for the plant site.

Contact MBJ contributing writer Becky Gillette at bgillette@bellsouth.net.


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