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Hoosier state continues steel production leadership

July 20th, 2017

By Doug LeDuc | Greater Fort Wayne Business Weekly

Indiana’s commitment to its business climate has helped make it the top steel producing state since 1975.

Data released by the American Iron and Steel Institute early this summer showed steel production falling by about half of a percent nationwide last year to 86.5 million net tons, from 86.9 million in 2015, while production in Indiana grew 5 percent to 24.4 million net tons from 23.2 million.

Indiana made more steel than the next three biggest steel producing states combined, for which the institute could provide data without violating the privacy of any of its members. Ohio made 9.6 million net tons of steel last year; Michigan made 5.6 million and Pennsylvania made 5.3 million.

“We have heard from many employers that northeast Indiana is a prime location for business because of our attractive tax environment, proximity to major highways and railroads and a pool of skilled talent,” John Sampson, CEO of the Northeast Indiana Regional Partnership, said in an email.

“And, it should come as no surprise that the strong work ethic of Northeast Indiana workers is well-known. Our gross regional product has grown steadily in recent years, faster than the state and nation. The data clearly demonstrates that technology, skill and work ethic are at the heart of our region’s productivity.”

Indiana also is a desirable location for steel production partly because it is relatively close to raw materials required for the process, and to a vast Midwest manufacturing base that uses steel, in addition to Great Lakes shipping, which can help transport the commodity to many of those customers at a lower cost, according to an institute spokesman.

Northeast Indiana’s largest steel producers are Steel Dynamics Inc. and Nucor Corp. SDI employs about 3,400 full-time statewide, of which close to 2,675 work at its operations in northeast Indiana. Greater Fort Wayne Business Weekly’s 2017 list of largest manufacturers in the region included Nucor with 950 northeast Indiana employees. A statewide figure was not available for the company.

Within the region, Nucor has Vulcraft Indiana and Nucor Fastener Indiana operations in St. Joe, Harris Rebar operations in Auburn and Nucor Building Systems Indiana operations in Waterloo.

Northeast Indiana locations of Steel Dynamics include its corporate headquarters as well as corporate offices for its subsidiaries New Millennium Corp., OmniSource Corp. and Iron Dynamics Inc. in Fort Wayne; a division of its Flat Roll Group in Butler and its Structural and Rail Division in Columbia City.

Growing, expanding

The company announced this month plans to invest more than $75 million expanding production capabilities at its Columbia City mill, creating as many as 33 new jobs there by 2018.

The project would included the addition of new rolling equipment, buildings for storage, site grading, drainage and road improvements, according to a July 5 announcement.

The company plans to complete construction during the fourth quarter of 2018 and expects the expansion will allow it to produce 240,000 tons of new steel products annually.

Among the characteristics of the region and the state Steel Dynamics considers attractive as a place for doing business, Tricia Meyers, investor relations manager, mentioned access to an incredible, educated workforce with an outstanding work ethic.

“The people tend to fit well within the Steel Dynamics culture,” she said. “The culture is self-motivated, incentive-motivated, because the way we compensate is a highly incentivized and team-based approach.”

A public that is involved and active in state and local government and responsible environmental stewardship has helped make Indiana a good state for businesses to operate in historically, Meyers said.

“It’s a good state to base investments in because it’s fiscally sound and healthy and there’s a good tax structure,” she said.

Indiana has reasonable access to electrical power and natural gas, with very good pipeline distribution for natural gas, Meyers said. The state has been a source of lower-priced energy historically, and SDI supports efforts to keep energy costs low, she said.

As to specific reasons for steel producers to find the state attractive, “more than 50 percent of the steel consumed in America is consumed geographically close to Indiana,” Meyers said.

“Steel Dynamics uses scrap steel in our production process and scrap is created where steel products are consumed, which makes Indiana a great source for steel scrap,” she said.

Access to truck and rail freight transportation is very good locally, which helps with steel business logistics, Meyers said.

“While logistics are good in certain regions, we are supportive of state efforts to improve the existing infrastructure, including upgrades to the transportation systems such as U.S. 30 from Fort Wayne to Valparaiso, which would provide improved assess to Chicago,” she said.

The state started collecting more money for road projects this month through the first gas tax increase its motorists had seen since 2003, despite the impact of inflation on road projects. The tax rose by 10 cents per gallon.