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1,400 Acres for a 'Mini' Mill

Construction began in October 2005 on SeverCorr's 1.2-million-sq.-ft. (111,480-sq.-m.) automotive steel mini-mill in Lowndes County, Mississippi. The plant will supply numerous automakers and suppliers throughout the South.
   Automotive steel producer SeverCorr is positioning itself as a key supplier to automotive manufacturers in the South, which could soon see additional investment from non-U.S. automakers. In October 2005, SeverCorr broke ground on its 1.2-million sq.-ft. (111,480-sq.-m.) mini-mill facility in the Golden Triangle Industrial Park in Lowndes County adjacent to a site Kia Motors is considering as a location for a new facility.
   "We were looking to be in the cradle of our marketplace," says Eddie Lehner, SeverCorr's CFO. "The global manufacturing footprint for North America has shifted to below the Mason-Dixon line along the I-85 corridor as well as I-20 and I-40 from Texas through the deep south and southeastern U.S. The business climate in the south is favorable, and people in the region are looking for economic opportunities whether they're from domestic or non-U.S. providers."
   Lehner says the key factors in the decision to locate the facility in northeastern Mississippi were proximity to the company's customers, access to favorably priced energy, a good business climate and the possibility of gaining a logistics advantage. "You have to be able to get your inputs and feed stocks in economically and your product out economically," he says, which is why a site at a deep water port was a requirement early on in the site selection process. "That would have facilitated probably the lowest cost means of bringing in our raw materials. But if your market is domestic and you're at a deep water site, then you're that much farther away from your marketplace, which is not all located on the coast."
   The Golden Triangle site gives SeverCorr a variety of transportation options, from barge traffic on the Tenn-Tom Waterway to rail and highway access to ports on the Gulf Coast. "There's a good multimodal mix of transportation capabilities."
   Even more fundamentally, says Lehner, "Because our business model is scalable, we wanted to make sure the area could support that scalability in terms of transportation, logistics, utilities, infrastructure and water. We believe the area can support that scalability."
   Several states competed for the mini-mill — 55 sites were considered in the South — but Mississippi was particularly aggressive inasmuch as SeverCorr would be the first investor in the state's high-end steel producing industry, which the state considers to be a strategic industry. Initially, the state had agreed to provide a $75-million contingent loan as part of a $110-million incentives package. That loan would back up a loan SeverCorr would acquire through private lenders. That loan was reduced to $60 million in September with direct payment to the lenders.

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