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OPINION | REX NELSON: How steel came to overpower cotton as the strongest product of northeast Arkansas

by Rex Nelson | June 19, 2022 at 2:11 a.m.

I've finished my speech at a luncheon meeting of the Mississippi County Regional Chamber of Commerce at the Holiday Inn in Blytheville. Cliff Chitwood walks over and hands me a cap. I get plenty of free caps--more than I'll ever wear--in my travels across Arkansas, but I particularly like this one. It says "Cotton to Steel."

I've long been fascinated by the rich history of this sprawling northeast Arkansas county, which at one time claimed to grow more cotton than any other county in America. The transformation of Mississippi County from top cotton-producing county to top steel-producing county is an amazing story.

The Great River Economic Development Foundation, which Chitwood heads, is the organization behind the "Cotton to Steel" campaign. GREDF was formed in 2002 to recruit businesses to the county, which has been losing population for decades. It's funded by a county-wide half-cent sales tax for economic development.

Prior to becoming GREDF president, Chitwood was marketing director for the Blytheville-Gosnell Regional Airport Authority, which is tasked with finding uses for the former Eaker Air Force Base. In 2010, the association that represents Arkansas economic developers recognized Chitwood as its developer of the year. A graduate of the University of Arkansas with a degree in finance and economics, he once worked as a UA development officer.

The transformation here began in 1987 when Nucor-Yamato Steel constructed a mill in the Blytheville area. Nearby Nucor Steel Arkansas, locally known as Nucor Hickman, began production in 1992 and expanded in 1998. Nucor-Yamato was formed as a joint venture between Nucor and Yamato Kogyo. The plant now has the ability to produce more than 2.5 million tons per year.

The two steel plants were surrounded by steel-related industries such as Milwaukee Electric Tool Corp. (which closed in 2008) and Maverick Tube Corp. (now Tenaris).

The Blytheville-area steel mills have produced what are known as hot band, cold roll, galvanized, galvanneal and painted sheet types of steel used in the automotive, energy, appliance, construction and agricultural equipment industries. Since 2018, Nucor has invested almost $750 million in facility upgrades.

In 2017, Big River Steel began operations at its $1.3 billion scrap metal recycling and flat-rolled steel production facility near Osceola. It wasn't long until Big River was providing steel to more than 200 customers. An expansion was planned almost immediately and completed in November 2020.

Lenore Trammell, Big River's chief administrative officer, said at the time of the expansion: "Our location in Osceola is steel mill heaven because of our proximity to a main-line railroad, major highways and the Mississippi River. That allows us to easily receive raw materials, including recycled scrap, and then ship steel via a variety of transportation methods."

In July 2019, Zekelman Industries announced it would build another tube mill adjacent to its existing Atlas Tube mill in Blytheville. The expansion produced 75 additional jobs and cost $150 million. Production at the facility began earlier this year.

In October 2019, Nucor opened a $230 million specialty cold mill complex on its Hickman land. The complex expanded Nucor's capability to produce automotive-grade steel. Almost 100 additional workers were added at an average salary of $80,000 annually.

"With today's automakers counting on steel as their material of choice to reduce vehicle weight, while at the same time improving safety and performance, our new cold mill will be at the forefront of making these advanced high-strength steel products," Nucor Steel Arkansas general manager Jay Henderson said at the time.

The expansion pushed Nucor's total employment in Arkansas above 1,800.

Last August, Majestic Steel USA announced that it was adding a service center and processing facility on Nucor's Hickman campus. The 515,000-square-foot complex will have advanced processing and warehousing equipment and create 225 jobs. The facility is expected to be fully operational by the end of this year.

Majestic, founded in 1979 and headquartered in Cleveland, will process and stock steel products for businesses across the region.

The biggest of all announcements came in January when U.S. Steel Corp. (which earlier purchased Big River) said it will locate a $3 billion mill near Osceola, creating 900 jobs with an average pay of more than $100,000 annually. It will be the largest private capital investment in Arkansas history.

The mill will have two electric arc furnaces with three million tons per year of advanced steelmaking capacity. The plant also will feature advanced finishing capabilities. U.S. Steel president and CEO David Burritt said in January that the new plant will "reshape the future of steelmaking. We had numerous competitive site options, but Osceola offers our customers incomparable advantages."

Alabama and Mississippi were also in the running for the mill. The Arkansas Legislature held a special session last year to put together an incentive package. Industry experts say it will be the most advanced steel mill ever constructed.

"Our nation and our customers need a robust and resilient supply chain to meet consumers' needs, and that starts with U.S. Steel's advanced, sustainable steels," Burritt said in January. "Steel is critical to so much of what the world builds, so how we make our products contributes directly to a better, more sustainable world for all. This new facility will build that future."

The facility will be adjacent to the Big River mill. Together, the two mills will be known as Big River Steel Works. U.S. Steel is moving quickly, with project completion expected by 2024.

Arkansas Commerce Secretary Mike Preston says the selection of Mississippi County "speaks volumes about the business climate and workforce in the area. By being the home of the first mill in the country to use endless casting and rolling technology, the steel industry will continue to recognize Arkansas for excellence in steel production."

In an April speech to the Arkansas Economic Development Foundation, Burritt said his employees have been offered everything from free bottled water to help moving into their homes.

"This is a great place to do business, and it's because of the people you have here," Burritt said. "We love the culture in Osceola. They make our people feel extraordinarily welcome. I'm bullish about our business and about Arkansas--bullish with a capital B."

Other announcements followed.

Electric vehicle manufacturer Envirotech Vehicles Inc. is trying to raise the capital necessary to make an $80.7 million investment in Osceola. The company announced in February that it wants to refurbish the former Fruit of the Loom plant that covers 580,000 square feet. If funds can be raised, the plant will produce up to 2,000 vehicles a year after investing another $200 million above the initial $80.7 million. Employment is expected to reach 800.

The company also announced that it will relocate its headquarters from Corona, Calif., to Osceola.

"This is what we've envisioned for northeast Arkansas," Preston says. "When you bring in big anchor companies like Big River Steel and U.S. Steel, folks in the supply chain are naturally going to gravitate to the area. We feel manufacturing in northeast Arkansas is going to be strong for years to come."

Last month, Sierra Group Roofing & Solar announced that it will invest $16 million for an 11,000-square-foot headquarters at Blytheville and create 40 jobs. The company makes gutters and metal roofing accessories.

"Sierra Group is a great example of a company that's poised to make strides in the steel industry," Preston says.

Here's the problem for Chitwood and other economic developers in Mississippi County: Many of those who work in the mills don't live in the county. Mississippi County's population peaked at 82,375 in 1950 when thousands of sharecroppers and tenant farmers were needed to chop the massive fields of cotton in the summer and pick the crops by hand in the fall. The rapid mechanization of agriculture after World War II sent those workers to other states.

Mississippi County saw its population tumble to 70,174 in 1960; 62,060 in 1970; 59,517 in 1980; 57,525 in 1990; 51,979 in 2000; 46,480 in 2010; and 40,685 in 2020.

Many in the steel industry work a schedule of four days on and four days off. They share house trailers or recreational vehicles with co-workers, then return home to Missouri, Tennessee, western Kentucky and southern Illinois during their off days. How do Mississippi County officials convince them to move their families to northeast Arkansas?

The answer is what's known as the "Work Here, Live Here" initiative. The program pays 10 percent of any new home bought in the county by a worker in the manufacturing sector as long as the home is in the $200,0000 to $500,000 range. A worker must obtain a construction loan from a local bank to qualify. When the house is completed, a second mortgage with the 10 percent is implemented. If the worker remains employed in the county for at least four years, the second mortgage is paid off by the program.

Companies with operations in the area are partnering with the county.

"Living half your time in an RV is just not sustainable for those who want a family life," Chitwood says. "The executives of our companies understand that. It's like life in an oil and gas field for these workers. I think company executives are beginning to understand the benefit of having their workers live close to the mills.

"Take what Nucor has done in the way of expansions, what Big River Steel has spent and what Atlas Tube has spent. That's more than $2 billion in recent capital investments even before the $3 billion U.S. Steel announcement. The capital is here. These mills are going to be here for decades to come. I have to believe that more of the people who work in the mills will decide it makes sense to have homes here."

Chitwood doesn't think the "Work Here, Live Here" initiative will be around for decades.

"We're not going to have to do this forever," he says. "What we're trying to do is provide an incentive to increase our housing stock and change the conversation inside the county."

Liz Smith, who heads the Mississippi County Regional Chamber of Commerce, says the feeling of momentum is palpable.

"I've never felt this much energy here," she says. "Our chamber membership has doubled. The huge industrial announcements get all the attention, but there are lots of small businesses opening to support those workers. We're even seeing investors buy some of the old buildings in downtown Blytheville and Osceola. Meanwhile, a new foundation was formed to support the Ritz Theater in downtown Blytheville.

"The most exciting thing of all is that the main people involved in things like downtown restoration are young. That's what we need in Mississippi County--a younger generation fully committed to making this a nice place to live."

In the south part of the county, investor Gaylon Lawrence Jr. continues to pour millions of dollars into the old company town of Wilson. Its boutique Hotel Louis is already advertising in upscale lifestyle magazines such as Garden & Gun with plans to open this fall. Steel company executives are expected to build homes in the Wilson area and enroll their children in its prep school, the Delta School.

Thousands of acres of cotton--not to mention soybeans, rice and corn--are still grown here. Modern agriculture requires few workers, though. Steel is now king in Mississippi County and the key to its future.

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