Arkansas Business: Why the Steel Industry is Forging Ahead
It’s a weekday in Osceola, and the Arkansas Delta town, home to about 7,000 residents, is buzzing. What started as a commercial river port has transformed into one of Arkansas’ most vibrant industrial hubs. Soon, another steel project will begin operations in this small city on the Mississippi River, making it the capital of steel production in the South.
In February, U.S. Steel made state history when it broke ground on a $3 billion minimill in Mississippi County. Once complete, Arkansas will have 900 new jobs and one of the most advanced steelmaking facilities in North America.
Osceola isn’t alone in attracting record-breaking economic development projects like U.S. Steel. Long known for agriculture, northeast Arkansas has become the nexus of our state’s fast-growing steel industry.
Up the road in Blytheville, Atlas Tube recently opened its second facility. The $150 million electric resistance welded mill — the largest private investment in the U.S. steel industry in the last decade — will create 75 jobs. Meanwhile, talk continues to swirl about the region as a future base for car manufacturers, whether traditional automobiles, electric vehicles or both.
So what’s driving this surge in our steel industry? Arkansas uses four factors to its advantage in attracting steelmakers: incentives, a ready workforce, our prime location and competitive electricity rates.
Incentives, backed by a robust support system: The Arkansas Economic Development Commission is laser-focused on cementing our state as a leader in the steel economy. In 2021, with the AEDC’s support, the Arkansas General Assembly passed Act 3 to “encourage continuing capital investment by steel producers.” The legislation provides a tax credit for 30% of the price of waste-reduction, reuse or recycling equipment to qualifying steel manufacturers. Forward-thinking leaders like County Judge John Alan Nelson and Mississippi County Economic Development President Clif Chitwood complement these state incentives with aggressive local initiatives to make Arkansas more compelling to steelmakers.
A ready workforce: Steelmakers know their facilities can’t run efficiently without capable teams. Arkansas has made it easy to attract and retain the staff they need. Look to the Arkansas Steelmaking Academy at Arkansas Northeastern College. By partnering with global leader SMS, ANC President James Shemwell notes, ANC has become a “satellite training hub,” giving local workers a “cost-effective way to gain knowledge of cutting-edge techniques in steelmaking and processing.” In northeast Arkansas, manufacturers no longer need to worry about importing out-of-state staff for projects. The region has a wealth of experienced industry players and a willingness to pursue customized training opportunities.
Prime location with accessible materials and markets: Dave Stickler, former CEO of Big River Steel, noted how the Southern U.S. is rich in scrap metal — a high-demand material for minimills, the next generation of steelmaking facilities that are quickly replacing blast furnaces. He said northeast Arkansas is better positioned, “right dead smack in the middle of that Southern automotive corridor.” In addition to abundant supplies, we have an unmatched transportation network. Northeast Arkansas is located near the Mississippi River, a key entry point to global markets. Our state also boasts economical rail service and leading logistics providers, such as J.B. Hunt Transport Services Inc. of Lowell. As the AEDC noted, we have the location and infrastructure “ideal for growth.”
Affordable power: By nature, manufacturers like steelmakers are big energy consumers. Arkansas has the upper hand over other states with our competitive electricity rates. The U.S. Energy Information Administration ranks us among the 10 states with the lowest average electricity retail price. Pair this with our common-sense energy policies and regulations, and Arkansas becomes even more attractive to these types of facilities.
Arkansas’ steel industry is growing, bringing jobs and untold economic benefits with it. Let’s keep investing in the factors that will keep it forging ahead.