SGL Carbon to add to state plant

Electrode-maker sets $26 million upgrade

Posted: April 18, 2013 at 12:50 a.m.

Guy Veilleux, manager of the SGL Carbon facility, describes the graphite electrodes produced at the plant Wednesday morning with Scott Carter (center), president of SGL Group North America, and Grant Tennille, executive director of the Arkansas Economic Development Commission.

OZARK - SGL Carbon, a company that makes high power graphite electrodes used in steel recycling, said Wednesday that it is investing $26 million to upgrade its Ozark manufacturing facility.

The upgrade, which will include a new building, won’t be bringing new jobs at the factory but will make the operation one of three state-of the-art facilities in the company’s worldwide holdings. The Franklin County plant employs more than 90 with a pay that ranges between$30,000 and $80,000 a year, Guy Veilleux, the plant manager, said.

“This is a big day for us,” said Veilleux.

He said the upgrade will make the plant more environmentally friendly, safer and cheaper to operate by reducing energy costs 20 percent, and thus keep the company competitive in world markets.

The electrodes made at the plant are used in electric arc furnaces used to recycle scrap steel. The electrodes are less expensive and more flexible and cause less pollution that other recycling methods, according to the company. The plant opened in 1981.

Construction on the new, 50,000-square-foot building, which will be separate from the old factory, is expected to begin in June or July and should be complete by the summer of 2015.

SGL Carbon’s parent company, Germany-based SGL Group, employs 6,700 globally and operates 47 facilities directly or with partners. SGL group has 12 operations in North America, 26 in Europe and nine in Asia.

In 2012, the SGL Group had revenue of $2.24 billion, an increase of 11 percent, according to company documents. North America accounted for 23 percent of the company’s sales revenue in 2012. In a letter to shareholders, the company’s board of management said it invested $176.7 million in increasing worldwide production and in new technologies in 2012.

The SGL Group is one of the world’s leading makers of carbon-based products and materials - from carbon and graphite products to carbon fibers and composites. The materials are used in steel, aluminum and chemical industries and have applications in solar, lithium ion batteries and LED industries.

Scott Carlton, president of SGL Group North American, which is based in Charlotte, N.C., said the Ozark project is the largest capital investment the company has made in its U.S. history and it solidifies the company’s commitment to its U.S. operations. Carlton praised the plant’s workers and leadership, saying their dedication to safety and quality made the decision to expand the Ozark plant, which is actually just south of Altus, an easy one.

He said making the plant more efficient is vital, since 30 to 40 percent of its costs come from energy. An Arkansas Valley Electric Cooperative spokesman said the Ozark plant is the co-op’s largest customer. The cooperative operates in parts of 10 Arkansas and three Oklahoma counties. It has 56,000 customers, mostly residential.

Linda Millsap, director of the Ozark Area Chamber of Commerce, said SGL Carbon was the third largest employer in the area, behind Butterball LLC and electric motor manufacturer Baldor Electric Co.

Franklin County is part of the Fort Smith Metropolitan Statistical Area which includes Sebastian and Crawford counties in Arkansas and LeFlore and Sequoyah counties in Oklahoma. The statistical area’s labor force was 131,049 in February, according to preliminary figures from the U.S. Bureau of Labor Statistics, up from 127,603 for the same period a year ago.

The unemployment rate for the statistical area was 8.3 percent in February, down from 9.2 percent in 2011. The state’s unemployment rate for February was 7.2 percent.

The statistical area has lost several employers recently, including a Whirlpool Corp. plant that closed in June, resulting in the loss of about 800 jobs.

Grant Tennille, executive director of the Arkansas Economic Development Commission, said SGL’s investment in the plant was a good indication the plant would remain open and viable for years to come. He pointed to Whirlpool as an example of what happens once a company stops investing in its operations.

“Once the investment stops, you can start the clock,” he said.

Tennille said that in 2012 the commission gave incentives to eight new projects but 79 existing Arkansas companies received help the expand.

“These types of projects are our bread and butter,” he said.

Tennille said incentives for the SGL Carbon expansion included $2.5 million from the Governor’s Quick Action Closing Fund for equipment upgrades and infrastructure tied to plant expansion; reimbursement for possible worker training, such as sending workers to Spain to learn how to use the new equipment and programs set up though Arkansas Tech University’s Ozark campus; a 5 percent rebate on payroll for the next seven years; and sales-tax refunds for qualified building materials, machinery and equipment associated with the expansion.

The Fort Smith metropolitan area has received encouraging economic news recently.

In early April, Florida based Health Management Associates Inc. said it will open a regional service center in Fort Smith employing up to 500 people. In late March, Phoenix Metals Co. said it will build a $12 million facility in Fort Smith’s Chaffee Crossing creating 40 jobs over the next three years.

Business, Pages 25 on 04/18/2013