Decatur plant chosen for Steel Tech expansion

Apr. 28—A Steel Technologies LLC official on Wednesday said the company has chosen to expand its plant in Decatur instead of plants in two neighboring states, spending $19.34 million on a blanking press project that will add 50 new employees within three years.

Steel Technologies will install the 1,500-ton blanking press and construct a 70,000-square-foot expansion at its Mallard Fox Drive Northwest plant.

Decatur won the project over Steel Technologies plants in Tennessee and Mississippi, and that could lead to even more projects coming to the city in the near future, company officials said.

"Decatur, Alabama, is our choice," Executive Vice President Operations Randall Patterson told the Decatur Industrial Development Board on Wednesday.

Jeremy Nails, president and CEO of the Morgan County Economic Development Association, said Steel Technologies is one of 10 steel companies in Decatur. Nucor, a part owner of Steel Technologies, is the only steel producer. The other nine "take steel and make it into some kind of product." Carpenter Technologies, located in Limestone County just outside the Decatur city limits, is a specialty steel producer.

"Steel (Technologies) is growing its portfolio," Nails said. "The company is making a major investment in the Decatur plant after over 20 years of not adding anything to the facility. This major expansion will mean more tax dollars and jobs that create money for the community and the schools."

The blanking press will make items for water heaters, appliances, air conditioner systems and automobiles. Construction is expected to start in May with completion expected by May 31, 2023.

Decatur Plant Manager Daniel Naron said the current plant is 176,000 square feet. The site is on 38 acres.

"This is our first opportunity to expand," Naron said. "We've got room to grow."

Naron said his plant currently specializes in slitting (controlling the width) and cut-to-length steel coils.

"Slitting is so common among steel processors because it is the first stage in adding value for the customer. We also cut to length," Naron said.

However, Naron said the new press will add to the plant's capabilities.

"A press will cut rectangular or circular blanks," Naron said. "It will be a new process for our location. Our company is growing in this area of blanking and presses. We have the opportunity of hopefully that this could be the first of three expansions."

"Steel (Tech) has 30 locations, and now we have the opportunity to become the company's largest facility," Naron continued.

This is one of two presses the company recently purchased. A 1,000-ton press was scheduled to be delivered Wednesday to the Smyrna, Tennessee, plant.

"The presses will take about 18 months to install," Patterson said. "We know this is an aggressive schedule."

Naron said the plant will primarily hire trade workers like operators, material handlers and crane operators. The 50 new employees will make an estimated average annual salary of $45,500, not including benefits.

"We will start with (Alabama Industrial Development and Training), which I started with in 1997, to look for employees," Naron said. "We'll also be in contact with Calhoun (Community College), and we recently hired a new HR person. I'm sure she has some ideas too for finding employees."

The Decatur plant now has 34 employees who make an average of $57,000 a year as the plant operates on an annual payroll of $1.97 million, not including benefits.

"Many of these employees have been with the company for years," IDB attorney Barney Lovelace said.

The Decatur plant opened as a Mi-Tech facility in 1997. In 2010, Tokyo-based Mitsui formed a joint venture with Nucor Corp. The two companies share ownership of Steel Technologies. Steel Technologies operates as an independent business.

The company, headquartered in Louisville, Kentucky, has plants in the U.S., Mexico and Canada.

The Decatur IDB approved Steel Tech's request for abatements of $1.23 million in non-educational property taxes and sales and use taxes.

The abatements of the property taxes are spread over a 10-year period. This includes about $63,450 a year the company would otherwise have to pay the state, Decatur and Morgan County.

The IDB also abated $254,570 in one-time, non-educational city of Decatur sales and use taxes that would otherwise be owed during the capital investment period.

The board also agreed to the abatement of $339,430 in state sales and use taxes.

The project is expected to create $781,500 in new property tax revenue over a 10-year period that will benefit Decatur, Hartselle and Morgan County schools.

The company also expects to generate $84,850 in Morgan County sales and use taxes during the capital investment period that will benefit the three local school systems, and another $84,850 that will benefit Decatur City Schools.

— bayne.hughes@decaturdaily.com or 256-340-2432. Twitter @DD_BayneHughes.