By Mike Preston, Executive Director, Arkansas Economic Development Commission
One of the “hot” new trends in the steel industry is metal stamping. The industry is expected to experience a 3.6 percent annual average increase growth until 2022 at least.
There are several reasons why stamping is increasing in popularity among steel companies. Stamping leads to reduced labor requirements, lower production costs, a reduction of scrap metal, and replaces forging and die-casting processes.
Industries from automotive to aerospace to energy and even medicine and agriculture are utilizing stamped steel in their manufacturing processes because stamped steel can meet the demands of complex specifications such as dimensional accuracy, challenging geometrical shapes and product strength.
Advanced manufacturing industries have utilized metal stamping for decades. Stamped parts were imported from Germany to the U.S. for mass-produced bicycles as early as the 1890s and the automotive industry adopted stamped parts shortly thereafter. Today’s automotive sector utilizes stamping processes in more than 80 percent of components in a vehicle and accounts for 15 percent of revenue in the automotive parts industry.
Stamping is one of the biggest things in auto production and is the last hurdle to make a car completely out of induction steel, and Arkansas is poised to be right in the thick of things.
David Stickler, CEO of Big River Steel in Osceola, Arkansas, says he believes it is time for a steel stamping facility, specializing in making structural parts for automobile bodies, to locate in northeast Arkansas.
“It makes all of the economic sense in the world for an automobile steel stamping company to locate in close proximity to Big River Steel and Nucor,” Stickler said. “The savings in transportation costs for moving product from our facilities will pay for itself.”
Arkansas Governor Asa Hutchinson certainly hopes that’s the case. “We have world-class steel production, recycled steel, here in Arkansas which we hope leads to automobile and rail-car manufacturers to locate here.”
Mississippi County, in northeast Arkansas, is one of the largest primary steel-producing counties in the country.
“It actually started more than 30 years ago,” Stickler said. “A little company called Nucor Corporation decided they wanted to build a steel mill on the Mississippi River. Arkansas was a good home for that because they had the river system, the rail system, the highway system and a reliable electrical grid. What they had then, they have today only in spades.”
Today, Nucor Corporation, one of the nation’s largest scrap steel recyclers, operates two facilities in Arkansas.
Located east of Blytheville, Nucor Hickman makes steel products that are cold rolled, pickled and galvanized. The steel rolls are then shipped to downstream processors that will stamp the rolls into commercially viable steel products suitable for use in the making of automobiles as well as farm equipment, appliances and many other uses. Nucor Yamato produces narrow and wide flange structural beams used in the construction of buildings and bridges.
In 2016, Nucor Hickman announced a $230 million expansion project that, within two years, will greatly enhance production capability for the demanding automobile industry and add 100 employees to the payroll. In total, more than 1,000 people are employed between the two plants.
The steel industry in Mississippi County received another boost in late 2016 when Correnti’s dream became reality and Big River Steel was open for business in Osceola.
The $1.3 billion, 1,300-acre facility will soon become the first smart-steel production facility in the United States by using artificial intelligence in the vast majority of its operations.
“We’ve embraced artificial intelligence in our plant, which is similar to driverless cars,” Stickler said. “The more those cars are driven, the more they learn. The same holds true for our plant here: the more it operates, the more it learns and can react to production challenges automatically.”
In a year’s time, Big River Steel will use two million tons of scrap metal to produce 1.6 million tons of finished product, which includes hot rolled steel.
Clif Chitwood, Mississippi County’s economic development director, says the amount of scrap steel used by Nucor and Big River Steel is difficult to comprehend.
“I remember riding in a car with the late John Correnti one day and I asked where his company will get all of its scrap metal in the years to come,” Chitwood recalled. “About that time, a train carrying new cars was traveling down a track in the distance. Correnti stopped and said, ‘See those cars? In 15 years, they will become my scrap metal. And in 200 years, that same metal will be used in other ways.’ Quite amazing when you think about it.”
When the steel rolls are produced by companies such as Nucor and Big River Steel, they are then sent to downstream processors such as Tenaris, one of the world’s largest pipe-making companies. Also located in Mississippi County, Tenaris makes pipe used in the drilling of oil and natural gas.
Location. Location. Location. While that mantra is certainly true in the real estate industry, it’s especially important in economic development. And, location is one of Arkansas’ main selling points for steel producers and downstream processors.
Proximity to the Mississippi River was critical to both Nucor and Big River. Barges can deliver raw materials that are melted down to make steel and then they can put the product they make on another barge to ship up or down the Mississippi River.
Big River Steel and Nucor each have privately owned rail lines that connect to major rail systems providing access all over the country. That, coupled with a north-to-south interstate system on Interstate 55 and an east-to-west corridor on Interstate 40, makes northeast Arkansas an ideal place for a steel mill.
Arkansas’ status as a right-to-work state with an eager workforce is also a compelling attraction for industry.
The workforce we have here in Arkansas is made up of hard-working and dedicated people. Mr. Correnti once said that he’ll take someone off the farm and put them in a steel mill because they have the work ethic, and they’ll roll up their sleeves and do it better and faster than anyone else.
Governor Hutchinson also praised Arkansas’ technical colleges for accepting the challenge to prepare workers to be successful in today’s high-tech steel industry.
“Our two-year colleges have partnered with the steel industry to tailor-make the training that fits industry needs,” said Governor Hutchinson.
The steel industry is thriving in Arkansas. But John Correnti’s dream of “steel mill heaven” is, perhaps, even exceeding his bold vision.
Arkansas is hot right now in steel. The state is sending a message to the world that it is not only producing a lot of steel, but it’s technologically advanced steel is in great demand.
Arkansas is open for business, and there is plenty of room for more in “steel mill heaven.”
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