Behind The Deal: Benteler Steel/Tube Chooses Louisiana For First U.S.-based Operation

 
on March 24 2014 12:06 AM
IMG_0151 - hi rez
Benteler’s Louisiana hot-rolling seamless steel tube facility will be capable of producing up to 320,000 tons of steel tube product annually. led

In 2011, Benteler Group, a 135-year-old Austria-based company, was exporting up to 25 percent of its steel tube production to the United States. This high concentration of export volume presented the company with a new opportunity to more effectively deliver its product to customers. Executives from the Benteler Group's steel/tube division made the strategic decision to expand operations into North America and build their first hot-rolling tube mill in the U.S.

The company looked at locations across the United States for this new production center, evaluating more than 100 sites across 13 states. Benteler sought a location with the necessary qualities for such a large investment. Company officials wanted a location with access to waterways and interstates, and sustaining support from the region in which they would invest. Most importantly, the company required a talented workforce familiar with manufacturing processes to support the proposed investment.

While in close competition with neighboring southern states, Louisiana's economic climate and workforce features received a closer examination from Benteler. In August 2011, Benteler began discussions with LED to see if Louisiana could support the development of the company's first U.S.-based operation.

Louisiana Creates A Custom-Fit Solution For Benteler

Louisiana was naturally equipped to provide a sturdy location for Benteler's new facility. State and local officials identified an ideal location for Benteler's proposed hot-rolling tube mill at The Port of Caddo-Bossier in Northwest Louisiana, located near the Red River. This strategic location will allow Benteler to ship their products easily to regions along the river. In addition to this site, the Red River Waterway Commission, the Port of Caddo-Bossier and the Caddo Parish Commission agreed to contribute a combined $11.6 million for all infrastructure improvements to support the new facility at the port.

To address the company's crucial workforce needs, the state offered the services of LED FastStart® — the No. 1 state workforce development program in the country. Additionally, state officials partnered with the Greater Bossier Economic Development Foundation, the City of Bossier and the Bossier Parish Police Jury to facilitate the construction of a new training facility at nearby Bossier Parish Community College (BPCC) to support a pipeline of talent for Benteler.

The BPCC Center for Advanced Manufacturing will meet Benteler’s needs for long-term access to a highly skilled manufacturing workforce and will feature specialized equipment focused on manufacturing technology.

“The value of the training facility is almost immeasurable,” said Matthias Jaeger, president and CEO of Benteler Steel/Tube. “We are making a long-term commitment, so we need to have certainty about the workforce of the future.”

The training center will be initially designed to specifically support Benteler with manufacturing skills training. Once the company's hiring is ramped up and the necessary workforce is in place, the facility will also serve other manufacturers in the region in the future, ultimately becoming a regional hub for advanced manufacturing support and training. Training will be conducted by faculty from Bossier Parish Community College and officials from FastStart and Benteler, as well as specialized vendors.

LED's customized package for Benteler also included several performance-based grants to reimburse site development, infrastructure and equipment costs incurred by the port and the company during the first years of construction.

Benteler Forges Ahead In Louisiana

The customized incentive package developed by LED officials and their partners in Northwest Louisiana met the company's needs. In October 2012, after an extensive search across the country, Benteler executives announced the location for their first North American investment, selecting the Port of Caddo-Bossier in Shreveport.

"By removing obstacles, reducing bureaucracy, providing meaningful support and eliminating roadblocks, Louisiana officials at all levels convinced us that this state is the ideal location for our production facility," said Jaeger. "Those officials were willing to work closely with us to create an environment and a set of initiatives that made our decision an easy one."

Benteler executives announced a $975 million, two-phase development. The first phase is a seamless steel tube mill, and the second phase is a steel mill. Together, the steel tube mill and the steel mill will be 1.35 million square feet in size and will sit on 330 acres at The Port of Caddo-Bossier. The project will create 675 jobs, and the company broke ground on the project in September 2013.

Company officials cited Louisiana's contribution to Benteler's development needs as the competitive edge that allowed the state to separate itself from competing states.

Learn more about what Louisiana can do for your business at OpportunityLouisiana.com/CustomFit

Share this article

More News from IBT MEDIA