The city of Shelby has long been known as the birthplace of the seamless tube industry, and that history has been reaffirmed with a $30 million investment from the city’s largest employer, ArcelorMittal.
At their Monday evening meeting, Shelby City Council passed a resolution authorizing the city to enter into an agreement with ArcelorMittal Tubular Products USA, LLC for an expansion of its welded tube facility. The city agreed to provide ArcelorMittal with the tax exemption incentive for development in the Community Reinvestment Area, and ArcelorMittal will in turn bring 45 new jobs to Shelby over the next three years.
According to a statement from ArcelorMittal, the investment is for the purpose of “increasing cold drawing and finishing capacities to meet the market demand for increased production of drawn over mandrel (DOM) tube, a product supplied to the fluid power market.”
“This investment will allow us to return to our historic DOM market share and continue to grow in a profitable market niche,” said Edward Vore, CEO of North American Tubular Products, ArcelorMittal, in the statement. “It will allow us to maintain our service performance and give us additional operational flexibility.”
ArcelorMittal in Shelby has been in operation since 1890. Formerly Dofasco Copperweld, the tubular products facility manufactures welded and seamless precision tubes in a variety of steel grades for the fluid power, automotive, construction equipment, farm machinery, oil and gas tooling and service center market. The facility is recognized as the number one supplier, in volume and sales, in the market.
“We’re dealing with a company that has revenues of $79.4 billion, and they’re international – they have tubular operations in Hamilton, Canada and in Mexico,” said Christina Thompson, Community and Economic Development Coordinator for the city of Shelby. “This is significant for an international company of this size to invest in our town. It is a really big deal.”
With the passage of the resolution on Monday, the city of Shelby granted ArcelorMittal a 100 percent tax exemption for the next 10 years. If ArcelorMittal fails to fulfill its obligations under the agreement, the city of Shelby may terminate or modify the exemptions from taxation granted under the agreement and may require the repayment of the amount of taxes that would have been payable had the property not been exempted.
“Like many cities of our size, we have been blessed with a business community that is composed of companies and corporations of all sizes, and we truly appreciate each and every one of them,” said Councilmember Steve Schag on Monday evening.
“But unlike many cities of our size, we have a member of our business community that has a 124-year history in Shelby. I think it is a shared opinion that we are very fortunate that ArcelorMittal has chosen to invest in a major expansion project here that will result in their continued production goals in conjunction with creating some 45 jobs in a three-year timeframe,” Schag continued, “I believe as others do that this CRA agreement will be good for our city, good for Arcelor Mittal and good for the working families of our area.”
ArcelorMittal plans to construct a new 20,000-square foot facility at 132 West Main Street in Shelby to house its manufacturing and warehouse and operation. This will permit expansion of its DOM product line by 30,000 tons, annually. The project will involve an approximate investment of $36,100,000 for facilities, machinery, equipment and working capital. The expansion is expected to begin in quarter three of 2014 and will last approximately 18 months.
“ArcelorMittal has expanded many times throughout their 124-year history,” said Shelby Mayor Marilyn John. “The original company was here before we became a city, which is just amazing. We were still this little stopping point in the road, and ArcelorMittal was part of our community.”
ArcelorMittal will create 45 new full-time permanent job opportunities within the next 36 months, as well as retaining its current 631 existing full-time equivalent jobs, both salaried and hourly. Though zero new jobs will be created in the first year due to construction, 15 shall be created in year two, 15 in year three and 15 in year four.
All jobs will be in place by the fourth quarter of 2017, and the addition of 45 new jobs will add an additional $1.9 million to ArcelorMittal’s current annual payroll of $44,582,341.
“Any place you stand in this community, on any street you stand, you can turn in some direction and see the home of someone who is employed by ArcelorMittal,” said John. “That’s how important they are to this community.
“To see this coming to fruition in our community is very exciting for all of us,” John continued. “We’re very blessed to have them there.”
I think it is a shared opinion that we are very fortunate that ArcelorMittal has chosen to invest in a major expansion project here that will result in their continued production goals in conjunction with creating some 45 jobs in a three-year timeframe. I believe as others do that this CRA agreement will be good for our city, good for Arcelor Mittal and good for the working families of our area,” said councilman Steve Schag.
