Taking advantage of a tax break for recycling waste, the North American Stainless (NAS) steel plant in Ghent, Ky., plans to install an electric arc furnace. The $50 million investment will give the plant a backup furnace in the short term and the ability to increase output quickly in the future if more capacity is needed, according to Mary Jean Riley, a spokeswoman for NAS.
The Ghent plant is the sole U.S. production site for NAS, part of the Acerinox Group, owned by Acerinox SA, Madrid, Spain. Since 1990 when it founded NAS, Acerinox, the third-largest stainless steel producer in the world, has invested more than $1.3 billion in the plant and employs 1,030 there. The plant sits on 1,100 acres.
"We are very pleased the governor and the general assembly chose to include provisions which encourage recycling in the tax modernization legislation," said Jose M. Cornejo, president of NAS, in a statement released during the expansion announcement. "The recycling tax credits were important in our decision to make this investment in Kentucky."
NAS is getting a tax break because an electric arc furnace can make steel from scrap metal as opposed to cooking it from scratch in what's known as an integrated furnace. (Although, most stainless steel on the market today contains some scrap.) Kentucky recently modernized its tax laws to be more attractive to business, and this revamp included tax breaks for capital investments in recycling projects, according to the office of Gov. Ernie Fletcher. The tax credit is for investments of more than $10 million in recycling or composting equipment by a company having more than 750 employees and paying an average hourly wage of more than 300% of the federal minimum wage, with plant and equipment total cost exceeding $500 million. The credit is limited to 50% of installed costs of the recycling or composting equipment over 10 years.
The furnace is scheduled for completion in October 2006 and may be of interest to members of the International Stainless Steel Forum (ISSF), which will hold its annual meeting in Louisville, Ky., in May 2006. Chairmen, CEOs and other senior managers of ISSF member companies attend the annual event, which was last held in the United States in Pittsburgh in 1999.
Stainless steel differs from carbon and alloy steel in that it does not degrade. It's used in applications such as cutlery, food manufacturing and storage, medical devices and equipment and power generation.