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‘Outstanding’ first year, Severstal CEO says

The Golden Triangle received an economic jolt in the fall of 2005 when ground was broken on SeverCorr’s next-generation steel mill in Columbus.

It was lauded as one of the largest and most important economic development projects in the area’s history.

Less than a year after the groundbreaking ceremony, the plant started production October 23, 2007, with a capacity to produce 1.5 million tons of rolled steel in a year.

Since that time SeverCorr has become Severstal, a new CEO has come on board and plans for a phase two for the plant have been announced. But the company’s mission has remained the same: to produce rolled steel and deliver it to 12 targeted states.

Last Thursday, Severstal reached a milestone, celebrating to the day the first anniversary of the plant beginning production.

“It’s been outstanding,” said Severstal CEO Jim Hrusovsky, of the first 12 months of operation. “There were 29 facilities like ours and we have reached this capacity faster than all of them.”

Along with state and federal government officials, the Columbus-Lowndes Development Link (CDL) was at the point of the spear in luring Severstal to Columbus.

Severstal, as is the case with most economic development deals, had certain benchmarks it had to meet relating to fringe companies locating to the area and job creation.

“They’ve done more than they said they were going to,” CDL CEO Joe Max Higgins said.

Higgins said Severstal promised to bring along between five and nine companies that would serve in a support capacity to the main plant. It also promised to create a minimum of 450 jobs.

“The mill has certainly lived up to its obligation,” Higgins said. “Like I said, if anything they’ve done more (than they first promised).”

A good working relationship between a major industry and a local economic development agency is critical to ensure numbers-based goals are met and the industry thrives long term.

Part of that relationship involves one industry devoting resources to the recruitment of complimentary companies.

“The mill has been extremely cooperative in working with us,” said Higgins. The 1,200-acre Severstal site, not all of which is occupied, is being marketed by the CDL as a low- to no-cost freight zone, meaning transport costs for other companies there would be lower than would somewhere else. “So let’s say a company locates in another town in the area, like Reform, Ala. They would spend $2 million a year more on transport costs than they would if they were in Columbus,” Higgins said.

“We go (to Severstal officials) with projects and problems to work out and we leave with solutions after a two-hour meeting,” Higgins said.

Hrusovsky and other Severstal officials marked the mill’s first anniversary with a confirmation that phase two of the project, a $550-million venture that will double production capacity to 3.4 million tons a year, is moving forward. Part of Phase II will come online next year, with completion scheduled for some time in 2010.

Last Thursday’s festivities also included plant tours and a reception at the Jackie O House in Columbus.

A big selling point for the company when it selected Columbus in 2006 was the area’s workforce and the partnerships the company would forge with community colleges in the region.

“More than 80% of our workers who are here now never worked in the steel business before they started here,” Hrusovsky said. “But they were all quick learners and have a great work ethic. It’s been exciting to watch that process, with our steel industry veterans showing them how things work. And East Mississippi Community College has been an outstanding partner in workforce training. We have a commitment to training. We don’t just train people to push a button. You have to explain the how and why behind pushing that button.”

Hrusovsky praised Higgins and his staff at the CDL for acting as a cultural tour guide for the Golden Triangle.

“They really helped us understand what has to happen and who can make it happen,” Hrusovsky said. “That is critically important, to have a solid relationship with them. Joe Max has a clear vision as to how he wants to develop the rest of the site, and that is going to be good for both of us.”

Contact MBJ staff writer Clay Chandler at clay.chandler@ msbusiness.com .

About Clay Chandler

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