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Aluminum maker, Golden Triangle developers at odds over $1.2 billion project

ASA alloysBy JACK WEATHERLY

The Columbus area economic development organization has put the 826-acres it has set aside for American Speciality Alloys back on the market, alleging that the startup that plans a $1.2 billion aluminum plant has not been acting in good faith recently.

Joe Max Higgins, chief executive of Golden Triangle Development LINK, said Tuesday that the startup company that says it plans to produce aluminum alloy for automotive bodies has not presented a financial plan to LINK.

The company’s plan calls for a 1.4 million-square-foot facility that would employ between 650 and 850.

Roger Boggs, founder and chief executive of the company, told the Mississippi Business Journal Tuesday evening that the financial plan would not be revealed until a site has actually been selected.

Boggs said the news from LINK was “discouraging,” but the plan was still “certainly viable” and that Columbus was not out of the picture.

Boggs revealed that the company has had ongoing interaction with the Mississippi Development Authority.

“We negotiated a lot of this on the state level,” Boggs said. “And we have a state project manager.

Nevertheless, he emphasized, the company simply is obliged to evaluate more than one site as part of its due diligence.

He confirmed that the state has applied for permits in four other states — Tennessee, Louisiana, Alabama and Arkansas. No published reports have surfaced indicating the site might be outside of Mississippi.

Boggs said Tuesday that the average wage at the plant would be $85,000 plus benefits.

American Specialty has said that it expects to commence production by late 2016 and that about 2,000 will be hired to build the plant.

The company said in a press release on Nov. 19 that it was seeking a site somewhere in the Southeast, and has not veered from that, though it set up an office in Columbus and has applied for permits with the Mississippi Department of Environmental Quality.

The release violated an understanding that Golden Triangle Development LINK and the company had about keeping the project out of the public eye till all facets had been worked out.

The LINK sent a certified letter to Boggs, emails and phone messages but had gotten no response, Higgins said. So LINK gave the company a deadline of April 1 to commit to the Lowndes County site so it would continue to be held for American Specialty.

Several other companies had been interested in the site in the Golden Triangle Industrial Park but had to look elsewhere in the area, Higgins said.

Boggs said that the Nov. 19 release had been vetted by the law firm Butler Snow, the Mississippi Development Authority and LINK.

He said the company responded to the LINK letter through the MDA. “We negotiated a lot of this on the state level. And we have a state project manager,” Boggs said.

Also, the company has secrecy agreements with its banks and partners, he added.

“It is certainly a viable project that is advancing along, and we’re getting very close to the stage where we can get to where we are going,” Boggs.

He noted that the company last week announced the addition of two key members of the corporate team.

Robert D. Smith was named chief operating officer. Smith had been managing director of the Danieli Corp. North America operations. Danieli equips and builds similar plants.

Georg Fotakis was named vice president of construction and infrastructure and will oversee the building of the 1.4-million-square-foot plant, which will make aluminum alloy for automotive bodies.

Fotakis was the construction superintendent of the  $975 million Benteler International steel-tube manufacturing plant at Shreveport, La.  ASA is the eighth mill project for Fotakis, a native of Germany, American Specialty said in a news release.

“Fotakis brings valuable experience in contract negotiation, mill equipment installation to the construction of the 1.2 billion dollar state of the art and environmentally friendly manufacturing facility,” the company said.

“His skills and experience will further the capabilities of ASA and Danieli Group to build the turnkey hot- and cold-rolling mill . . . on a very aggressive timeline,” the release said.

Higgins said that he has not heard from Boggs since mid-November.

LINK officials met with the Mississippi Development Authority and state lawmakers in March to discuss incentives and a possible special session of the Legislature, according to Higgins.

Higgins said that dealing with John Correnti on a proposed silicon steel plant at Columbus left a bad taste in the mouths of LINK and other local officials and “we decided we were not going to ‘play project’ anymore.”

Higgins said that “we learned a lesson with Correnti’s project. He would say, ‘I’m ready to go,’ and get the governor’s and Legislature’s money and then for the next year and a half or two years he was running around chasing the money, saying I’ve got this state money, now give me your money.”

In its 12 years of existence LINK has been responsible for landing $5 billion in industrial development in that area, Higgins said.

After missing deadlines connected with $19 million in Lowndes County incentives, LINK asked Correnti to put $150,000 in escrow as a show of good faith. Correnti refused and said he would build the plant in Mississippi, just not in Lowndes County.

A $200 million plant called Mississippi Silicon in which Correnti leads a minority investment group is under construction in Burnsville on the Tennessee-Tombigbee Waterway, though a suit has been filed in U.S. District Court for Northern Mississippi in Aberdeen challenging the permitting process.

Correnti had previously partnered with Severstal, a Russia-based steelmaker, to build a plant called SeverCorr at Columbus.

Correnti is the former chief executive of Charlotte, N.C.-based Nucor Steel, one of the largest steel makers in the United States.

His investment group is building a $1.3 billion steel plant in Mississippi County, Ark.

Mississippi provided a $25 million grant and $10 million loan for the first phase of SeverCorr’s $600 million plant that promised to create 450 jobs.

Ground was broken in October 2005 and production began two years later. Shortly thereafter, it was taken over by Severstal, which bought out the minority investment group led by Correnti. Boggs was director of technology and customer service for three years (2007-2010) at the Severstal Columbus plant.

The plant was sold last year to Fort Wayne, Ind.-based Steel Dynamics Inc. for $1.63 billion and employs 650.

 

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