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Tue November 24, 2015 - Southeast Edition
Designed to offer a variety of steels for energy, power and transportation markets, the new, $1.3 billion Big River Steel mill in Osceola, Ark., will be the world’s first flat-rolled flex mill when it opens in mid-2016. Situated on approximately 1,300 acres, the facility will be able to produce 1.6 million tons of steel per year.
“I can’t begin to describe it, as it truly is one of those things you need to experience in person,” said Mark Bula, Big River Steel CCO. “Pictures simply can’t convey the size and magnitude of this type project. And no one builds a mill better than Jim Bell, our construction manager.”
The new facility, which has received national attention, will combine the wide product mix and superior grade capabilities of an integrated mill with the flexibility and technological advancements of a mini-mill. Big River Steel plans to begin production next year with an annual mix of hot rolled, cold rolled, pickled and oiled and galvanized steels.
“Big River Steel is the largest economic development project in Arkansas’s history,” said Bula. “We located in Mississippi County because it is an area of the state our [late] Chairman and CEO John Correnti liked to call ’steel heaven’ due to its proximity to the BNSF railroad, location close to I-55, and direct access to the Mississippi River.”
In August, Correnti, a veteran steel company executive, passed away unexpectedly. Big River will now be managed by its operating committee, and Correnti’s death is not expected to affect construction plans.
Work on the high-profile project began shortly after officials closed on financing in mid-2014. Currently, site prep is complete, with more than 1.1 million cu. yds. (841,010 cu m) of site excavation. Of the 235,000 cu. yds. (179,670 cu m) of concrete required, 112,295 cu. yds. (85,855 cu m) have been poured to date, including a concrete pour for the caster basement, as well as the scrap pit and zinc pot basement. Foundation work for the hot mill’s tunnel furnace also is underway. A total of 11,500 tons (10,432 t) of rebar have been used, with 22,000 additional tons (19,958 t) anticipated by the end of November.
About 30 percent of the structural work is complete. Most notable is the use of jumbo hollow structural sections, or HSS, that were erected in the finishing mill complex, which will be 747,060 sq. ft. (69,404 sq m) under roof.
In April 2015, a major milestone was reached in the construction of the flex mill with the arrival of the first supply of steel tubing for the cold mill. Tractor-trailers delivered thousands of tons of hollow structural sections that will make the structural base for over half the mill.
“Big River Steel is focused on producing newer niche steels that will help our customers innovate and improve their end products,” said Bula. “We believe we see that opportunity in structural tubing, or HSS, verses wide flange. HSS is not the same traditional red iron used for structural steel. HSS is the new kid on the block. In fact, only a few months before we began engineering our buildings, the HSS industry launched a higher strength product called A1085. In conjunction with the Steel Tube Institute, we evaluated it and realized it would be a good choice for our project.
“The torsional strength is considerably better, as it does not have a weak side. It can also deliver higher strength with less weight, which helps on logistical costs to the job site, as well as in our building foundations. It’s a cleaner look. We believe this is the most significant heavy industrial project in North America to use HSS. Admittedly, another advantage to us is that HSS is made from flat rolled steel — the steel that we will produce here in Osceola. Wide flange does not use flat rolled steel. So, while we believe HSS was a superior product in total cost, strength and look for our project, we also are happy to be using the products of our future customers.”
As for construction concerns, one of the biggest benefits of this location is the proximity to the Mississippi River, according to Bula.
“But that has been a challenge during construction, due to water levels. Regardless, we are committed to an on-time delivery of the mill next year.
“We continue to work on more foundation and structural progress in the melt shop and hot mill complex, which will be over 243,405 square feet. The railroad that will aid transportation on the site is underway, as is much of the piping, electrical and mechanical work. Right now, we have about 800 construction professionals on site, and that number will continue to grow to about 2,000 when we are at maximum.
“The response from the marketplace has been very supportive. As I am out giving presentations and meeting with future customers, what seems to resonate the most is our push for the industry to do more, to compete, to push the boundaries of steel. We have to evolve the industry. If we don’t start innovating, we will never have young people wanting to get into this business. If we don’t start innovating, new materials will continue to eek away at our markets. And if we don’t start innovating, someone else will.”
For Bula and others, the new mill was an opportunity to think outside the box.
“We were innovative in using HSS to build an industrial project of this size. We were innovative in the equipment we chose to run our mill to allow us to make niche steels. Innovation is fueling our research and development efforts. Very early on, we hired a product development manager and a technical service manager so we could start working on R&D and product development even before the mill starts up. We believe the world doesn’t need another steel mill. But the world does need a steel mill willing to push the boundaries of what steel can do.”
Big River started construction in mid-2014, and will produce its first coils of steel next summer. The plans had to be approved by lawmakers authorizing the state to issue $125 million in general obligation bonds under the authority of Amendment 82 and regulatory approvals. As required by the amendment, Gov. Mike Beebe referred the project to the legislature for its consideration. Amendment 82 allows the state legislature to approve up to five percent of the state’s general revenue budget to be used for bonding of super economic development projects.
Bordered to the east by the Mississippi River with direct water access, the mill is located near a main line railroad in what is reportedly the fastest growing steel consuming region in the United States. Big River Steel LLC and Gov. Beebe formally announced plans for the plant in 2013, explaining that the Mississippi County facility will directly employ a significant number or workers, with average compensation of $75,000 a year. A formal groundbreaking took place in September 2014.
During the 2013 Arkansas legislative session, rival Nucor protested the state’s financial backing of the Big River Steel project, claiming a third steel plant in the county might result in Nucor cutting jobs. Nucor filed a federal lawsuit, charging Big River Steel’s mill would violate the Clean Air Act.
Big River Steel describes the flex mill as being as environmentally resourceful, as it is technologically advanced, setting new standards in energy efficiency. The hydraulic power roof system in the electric arc furnace reduces the amount of heat escaping, reducing energy consumption.
“Beyond steel being the most recycled material in the nation, our positive impact on the environment will be seen in the steels we will produce,” said Bula. Our products will be used to go into the earth to drill for oil and gas and then to transmit it downstream. Our steel will move energy to electrical plants that generate power and puts it on the grid, and it will be used to lightweight automobiles for better fuel efficiency. We will help to make the process of finding, moving, generating and using energy more efficient.”
Bula also said the plant’s economic impact can’t be overstated.
“When we are fully operational, Big River will employ over 500 people. Two workforce development programs are already being offered by Arkansas Northeastern College, helping prepare local residents to work at the mill. There will also be downstream processors who will locate here and bring with them even more opportunities. The biggest impact on our community and the entire region will be the good paying jobs that we are creating.”
Osceola Mayor Dickie Kennemore said, “Mississippi County, obviously, is not the Silicon Valley, so we don’t have the trained personnel to supply a highly skilled workforce. What we do have is a workforce that’s innovative and accustomed to hard, labor intensive work. The steel industry and our workforce are suited for one another.
“The steel industry’s wages are much higher than any of the other job opportunities in the area. Also, as agriculture has become more mechanized, the number of displaced worker has risen, proportionally. So, for years our unskilled, displaced workers have either left the area, been underemployed or unemployed. While the rest of the nation has enjoyed an expanding economy, Mississippi County has had double digit unemployment and population decline. With the recruitment of the steel mills, we feel like our future is much brighter.”
Kennemore said, “John Correnti’s opinion of the site was based on five factors that are required for a super site — water transportation, being located near an interstate highway, railroad accessibility, availability of high-voltage electrical supply and a site of 1,000 acres or more. This site has all of these assets, plus a suitable workforce, and substantial state, county, and city incentives.”
Kennemore said the site and an adjacent property were considered five times by large steel companies.
“We have been marketing this site for about 15 years. There were three sites in the south considered super sites. One in Mobile, Ala., one near New Orleans and our site. Theisen-Krupt considered our site, twice, and eventually located in Mobile, Ala., because they preferred access to the ocean going ships. This mill was not a mini-mill, but an integrated mill, which ships in raw materials from South America. Also, they built right after Katrina hit the coast and they got some special financing from the feds that we couldn’t offer.
“Mr. Correnti also looked at the site and decided to build here, but politics got involved and the state backed out on its incentive package. Mississippi stepped up and offered a deal he couldn’t refuse. Warren Steel selected this site, but, again, politics kept them from locating here. Finally, we put the deal together, with much support from Gov. Mike Bebee, and after the four other opportunities, we got BRS. In my opinion, we got the best of all the mills.”
“Our family business, as well as all the businesses in town, now have a very bright future. I certainly have a selfish interest in seeing the mill come to Osceola. As a life-long resident, I also take a lot of pride in what we have accomplished. I get a rewarding feeling just being a part of the largest industrial complex to ever come to the state. I drive out to the site often, and can’t fully express the gratification that I feel, watching this great project come to fruition.
“We never quit, even after being knocked down four times. We taxed ourselves to enable us to be able to offer industrial incentives, and were the first county in the state to do so. We contributed $16 million, locally, to bring this facility to Mississippi County. When BRS comes on line, with its production and the steel production of Nucor Steel, Mississippi County is projected to be the number one steel producing county in the USA, and we’re proud to say it’s made in the USA.”
According to Clif Chitwood, president of Mississippi County Economic Development, the economy in Mississippi County has struggled for 20 years.
“We lost jobs in assembly and textiles, as well as jobs associated with the closure of Eaker Air Force Base in Blytheville, Arkansas. In addition, the loss of 6,500 service personnel was a heavy blow. The arrival of Nucor in the late 1980s and the addition of a second Nucor plant in the early 1990s did much to ameliorate those losses and set Mississippi County on a new path.
“In the intervening years, we have had new oil and gas pipe mills employing over 2,000 people arrive. There are now close to 6,000 people earning their living in the steel industry in the Blytheville area. We believe the BRS mill will have the same dramatic and positive effect in the Osceola area.”
According to Chitwood, the attributes required for a successful mill are excellent river access, in order to bring in vast quantities of scrap metal, and a major rail line and interstate access to deliver finished product.
“In addition, and perhaps the overriding factor, is the availability of large amounts of correctly priced electricity.”
Chitwood also said watching the mill take shape has been an interesting experience.
“Every week it grows higher and deeper, spreading out all the time.”
Mississippi County administrator Judge Randy Carney also is encouraged by the new mill’s impact on the local community.
“Initially, there will be 1,200 construction jobs over a period of two years, and then a minimum of 525 permanent jobs. Also, there is an expected 17 percent increase in sales tax for Mississippi County.
“This is the largest industrial project in Arkansas, with several other ancillary industries committed in our near future. Our goal in Mississippi County is to become the industrial capital of the state. This project puts us in the top three, as far as the number of industrial jobs.”
Carney said it’s an ideal location for the mill, because Osceola has both the infrastructure and workforce needed. The ongoing construction at the job site means the long-talked-about project is finally becoming a reality.
“One year ago, it was farm land, and now it has hundreds of thousands of concrete pillars poured, steel structure and all the dirt work being done. Our people have seen the largest industrial project in the state from the beginning stages, through what will be next year a completed state-of-the-art steel mill.”