By ROBIN SHANNON

L’Observateur

GRAMERCY – The nation’s largest steel manufacturer formally announced plans Wednesday to bring a multi-phase iron and steel production facility that could eventually employ up to 1,250 workers to St. James Parish.

Surrounded by local and state leaders, Gov. Bobby Jindal said Nucor Corp. decided to construct its five-phase, $3.5 billion complex on a 4,000-acre site in the Convent community. He said the first phase, a $750 million direct reduced iron facility, could begin construction as early as next year.

“This is one of the largest economic wins in our state’s history,” Jindal said. “I can assure you that Nucor will not regret their investment in our state.”

The state had been waiting more than two years for Nucor to make a decision on bringing its new investment to the area. The North Carolina company had narrowed its choice down to the site in Convent and a similar location in Brazil. The announcement came just days after the company reported slowing business due to a sluggish national economy. Nucor officials said Wednesday the project provides an opportunity for the company to harness more control over its raw materials and make it more competitive in the long run.

Jindal said the direct reduced iron facility would add 150 permanent jobs in addition to 500 construction jobs. He added that by the end of the five-phase plan, which includes an additional reduced iron facility, a pellet plant, a blast furnace and coke oven, and an eventual steel mill, the facility would add 1,250 direct jobs and another 4,800 indirect jobs to the local economy.

“These are good jobs that will go to local people,” said Nucor Chief Operating Officer John Ferriola. “I am proud and excited that they are going to American workers.”

Jindal said economists from LSU estimate the facility could generate more than $560 million in new tax revenue, which includes more than $122 million for St. James Parish alone. He said the average salary for new plant employees would be as much as $75,000 plus benefits.

“With this investment, Nucor has told us that Louisiana is the best place in the world to build this facility,” Jindal said. “This is another big step in my goal for a new Louisiana where our children and grandchildren will be proud to live and work.”

Nucor initially planned to construct a pig-iron manufacturing facility, but, according to Ferriola, uncertainty surrounding new federal regulations on greenhouse gas emissions prompted officials to hold off on that project. Ferriola said the pig-iron plant would be the third phase in the five-phase project.

“The issue of greenhouse gas legislation is huge,” Ferriola said. “If these new laws go into effect, it will make projects like this one difficult to accomplish in the United States and force those projects overseas.”

With the change in scope, Ferriola said Nucor would have to obtain new environmental permits from the Environmental Protection Agency and Department of Environmental Quality before construction on the direct reduced iron facility can begin. He said the plant would run on natural gas as opposed to coal and therefore release significantly fewer emissions.

“We have secured permits for the pig iron plant, but that is not what we are building at this time,” Ferriola said. “We are absolutely confident that are new permits can be secured in time to begin construction early next year.”

The state used a substantial incentive package to further influence Nucor’s investment in the St. James site and encourage them to follow through with all five phases.

Jindal said the company would receive $30 million from bonds that taxpayers guarantee through the state construction budget for the first phase of the project. St. James is also putting forward a $30 million loan that could turn into a grant if the next phase of the project proceeds. The state is also offering $600 million in Gulf Opportunity Zone bonds, a fund set up by Congress to jumpstart economic development in the wake of hurricanes Katrina and Rita. Jindal said Nucor is responsible for paying back those bonds. Economic Development Secretary Stephen Moret said the company must initiate all five phases by 2015 to get the full incentive package.

“As long as the government does not hamstring our industry, we will get this done,” Jindal said. “This is a long term investment that Nucor is excited about seeing through.”

Ferriola said he hopes to see a groundbreaking on the direct reduced iron facility early next year, pending the success in acquiring the permits. He said the project would take about two years to complete once the permits are secured.

The breakdown of the other four phases is as follows:

• A second direct reduced iron facility – $400 million investment producing 100 jobs

• A pellet plant – $500 million investment producing 200 jobs

• Blast furnace and coke oven – $1 billion investment producing 300 jobs

• Steel mill – $700 million investment producing 500 jobs