|
Lowcountry becoming South Carolina’s steel country
By Dennis Quick
Senior Staff Writer
Since its arrival in Berkeley County last June, Welded-Tube Berkeley, a Canadian-owned steel pipe and tube manufacturer, already is preparing for expansion. The company is planning to ramp up its monthly production from about 1,600 tons to as much as 8,000 tons.
“According to our analysis, South Carolina and North Carolina are growing proportionately faster in industrial growth than any other Southeastern state,” explains Robert Lardon, Welded Tube-Berkeley’s vice president and general manager.
Welded Tube-Berkeley is one of 11 steel-related businesses attracted to the Nucor Steel’s 300-acre campus in the Cainhoy area. Roughly 1,600 workers are employed by these steel-industry businesses. Nucor Steel accounts for roughly 850 of those jobs, and with average salaries of $50,000, Nucor’s payroll amounts to about $42.5 million.
“This is all money coming in from the outside from products produced locally,” points out Al Kennedy, project manager for Berkeley County’s economic development department.
Nucor recycles scrap steel used in appliances, pipes and tubes, buildings, automobiles and other items. The company has an annual production capacity of about 3.2 million tons. Large shipments are imported and exported via the Cooper River, which borders the Nucor site.
In 2003, the Charleston area imported more than 1 million metric tons of iron and steel scrap, accounting for 19% of U.S. iron and scrap steel imports. Only Detroit imported more of these materials. Meanwhile, the Lowcountry exported about 16,000 metric tons.
The regional demand for steel products has helped drive the local steel industry. Welded Tube-Berkeley, which purchased the former AMS manufacturing facility on the Nucor campus, sees the forthcoming Global Aeronautica aircraft parts manufacturing center in North Charleston and the state’s general manufacturing scene as a collective goldmine for potential business.
Welded Tube-Berkeley is planning three expansions to its 72,000-square-foot facility, each expansion consisting of 31,125 square feet. The first expansion is to begin soon. All told, the expansions will boost the company’s payroll from 26 employees to about 100, says James Johnson, Welded Tube-Berkeley’s operations manager.
Lardon says his company owes its Berkeley County presence mainly to Nucor Steel. “We would not have made the AMS acquisition if Nucor wasn’t here to supply us with steel bands.”
That was the effect state and local economic developers hoped Nucor would have when the Charlotte-based steel company picked Berkeley County as the site for its recycling plant in 1995. When Nucor chose Berkeley County, about six other steel-related companies expressed interest in setting up shop nearby.
Thus began the Lowcountry’s steel industry cluster. The need for South Carolina to create and nurture clusters of businesses within the same industry has been the battle cry of financier Darla Moore, chairwoman of the Palmetto Institute, and of Harvard Business School economist Michael Porter. Clusters help raise the state’s per capita wealth, Moore and Porter emphasize.
Nucor’s initial $400 million investment in its Berkeley County operations has grown to about $1 billion, says Kennedy. While the company hasn’t announced any plans to expand its facility or hire more workers, Nucor does intend to upgrade its equipment.
Despite the sharp rise in steel prices over the past year and the shrinking availability of steel to U.S. businesses due to China’s escalated consumption of American steel products, the Lowcountry’s steel industry seems to be healthy. Kennedy says Nucor, which serves steel buyers in the Southeast, Atlantic Coast and overseas and has an annual production capacity of about 3.2 million tons, is maintaining its market share.
In addition to Welded Tube’s expansion plans, Steel Technologies-Berkeley, one of the other companies on the Nucor campus, is planning to expand, according to Welded Tube’s Johnson. Steel Technologies’ officials were not available for comment.
Johnson sees a bright future for the Lowcountry’s steel industry. “The growth potential is tremendous,” he says.
Dennis Quick is senior staff writer for the Business Journal. E-mail him at dquick@crbj.com.
|
E-Mail This Article
Printer-Friendly Version