Sun, May 13, 2007 - Page 11 News List

ThyssenKrupp to pour US$3.7 billion into new US plant


German steel manufacturing giant ThyssenKrupp AG chose Alabama over Louisiana on Friday for a US$3.7 billion steel plant, described by steel industry experts as the first large-scale project of its kind in the US in decades.

Set to open in 2010, the plant will employ as many as 2,700 workers when fully running, company officials said in selecting Alabama.

The site is near Mount Vernon in the Calvert community on the Tombigbee River, some 40km north of Mobile. It's on a river route to the Gulf of Mexico and near Mobile's rails and interstates.

Along with tax breaks and US$400 million in financial incentives, Alabama offered a site with a route to a Brazil plant that will provide slabs for processing in Mobile.

"It doesn't get a lot better than this," Alabama Governor Bob Riley said at a Montgomery news conference.

He described the project as "the largest economic development project in the history of this state" as well as for ThyssenKrupp, long a prominent German industrial giant.

"Only in one generation do you have opportunities to truly transform areas of a state. This is one of those opportunities," Riley said.

When ThyssenKrupp's supervisory board announced its selection on Friday morning in Germany, the company said the investment in the plant would be US$4.19 billion. But Christian Koenig, vice president of public affairs for ThyssenKrupp, said later news releases by the company that put the converted investment at US$3.7 billion were correct. He said he could not explain why the initial figure was different.

Until a few years ago, industry experts were saying that a plant of this kind might never again be built in the US, said steel specialist Frank Giarrantani, director of the Center for Industry Studies at the University of Pittsburgh in Pennsylvania.

Giarrantani said it's been decades since a plant of this size was built in the US.

"Then to have that plant here with the most up-to-date technology is a great thing for American steel," he said in a telephone interview.

But United Steelworkers International vice president Tom Conway in Pittsburgh said the ThyssenKrupp project will "only eat up US tax dollars and add unneeded domestic capacity. The last thing our industry needs is another mechanism to depress steel prices."

But Giarrantani said it's hard to predict the price effect of the plant because of changes taking place in the industry worldwide. He said it is wrong to think about this as only taking market share away from other steelmakers.

The Alabama plant would be Duesseldorf-based ThyssenKrupp's first steelmaking operation in the US.

The company said that once the plant could create as many as 38,000 new jobs, from suppliers to transportation to dining and entertainment.

The Alabama plant will have an annual capacity of 4.1 million tonnes of carbon steel end products.

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