Moret: Nucor a better fit than ThyssenKrupp

• By GARY PERILLOUX
• Advocate business writer
• Published: May 15, 2008 - UPDATED: 1:22 p.m.

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A potential Nucor Corp. metal mill in St. James Parish could be a better fit for Louisiana than the $3.7 billion steel mill Louisiana lost to Alabama a year ago, Louisiana’s economic development secretary said this morning.

In filing environmental permits today, Nucor announced it’s considering a $2 billion pig iron complex for St. James Parish, with future phases and more than $1 billion in additional investment possible.

Other international sites are in competition for the final project, but Louisiana is the only remaining U.S. site being considered by Nucor, which is North America’s biggest steelmaker with 22 million tons in annual production. The Nucor site would make 3 million tons a year of pig iron — a raw material used to produce steel.

“For a variety of reasons, this would be a better fit for Louisiana than ThyssenKrupp — if we win it,” Moret said. Those reasons include better-paying jobs ($75,000 per employee versus about $55,000 in the previous steel project), and Nucor would produce 500 megawatts of its own energy in a cogeneration project.

The latter is a huge difference. The Nucor model would produce more energy than the ironmaking complex would consume, whereas the ThyssenKrupp project involved $261 million in costs for building new transmission lines that would have provided a redundant power supply for that project.

ThyssenKrupp would have created far more jobs initially — up to 2,700 — but finding a sufficient number of qualified employees in the St. James region was a concern to ThyssenKrupp, as were commercial electric rates that could have been up to $5 million  more per month in Louisiana than Alabama.

The Nucor project would create 2,000 construction jobs, 500 permanent jobs and possibly 250 more jobs in a second phase. About 2,600 support jobs would be created in the broader St. James Parish community.

Thursday’s press release from Nucor chiefly covered the first phase of the project, Moret said.

“If we win the first phase, we will have an opportunity to potentially secure two more phases representing hundreds more jobs and billions more in capital investment,” he said. “Gov. Jindal has spoken with the CEO of Nucor on several occasions, and we’ve spent countless hours working on various issues related to the project.”

Parish officials told The Advocate more than two weeks ago that the state had a good chance of winning a project comparable to the ThyssenKrupp steel mill project that chose Alabama over Louisiana in 2007.

At the time, Nucor officials declined comment when asked if they were considering a major Louisiana investment.

St. James Parish President Dale Hymel said today that Nucor is considering buying 3,600 acres, nearly the same footprint that ThyssenKrupp was seeking. Entergy Corp. owns most of that acreage, and the entire site would have sold for $49 million, according to state documents obtained by The Advocate after the ThyssenKrupp project went to Alabama.

Moret said a state mega-project fund, created last year with $150 million in funds remaining from the ThyssenKrupp recruitment, will be key to winning the Nucor deal. Jindal is asking the Legislature this session to beef up that fund to $450 million to help woo Nucor and several other projects the state is pursuing that include large job and capital investment numbers.