by Max Brantley
It will be interesting to see how Republican U.S. Rep. Tim Griffin, the Arkansas Republican Party and its paid mouthpieces on the web spin this:
For the second time in its three-year history of operation in Arkansas, international pipe manufacturer Welspun Corp. Ltd today announced it will expand again, adding 200 jobs and investing an additional $100 million in its Little Rock, Ark., facility, the company’s first large-diameter pipe manufacturing location in North America. With this expansion, Welspun will bring total overall investment to $280 million since opening in April 2009.
Pipe produced by Welspun is primarily used in the gas and oil industry.
You may recall that the delay in approval of the Keystone pipeline is cited tirelessly and tiresomely and inaccurately by Republicans as costing jobs in Little Rock. Apparently Welspun is doing OK. (As I've written before, 60 part-time workers were laid off temporarily from a short-term job loading pipe as a result of the Keystone decision, but a plant official said they'd eventually have the work to perform regardless.) Undoubtedly Welspun would like Keystone and many more pipelines to be built, but the market is apparently strong. It has already completed manufacture of all the Keystone pipe, by the way, though some finishing remained when last I checked. TransCanada is obligated to buy it regardless of the outcome of Keystone, on which planning is proceeding for a new route.
Roby Brock reports the state payout on the expansion: $4.5 million for site prep;
$300,000 for training; payroll tax rebates for 10 years; sales tax refund on construction materials.
Welspun had said when it expanded in 2010 that its pay averaged $17 an hour, counting some higher-skill engineering and technical jobs. Entry level jobs started at $12 an hour. 200 jobs at $17 an hour might produce as much as $400,000 a year in state income tax withholding, though likely a good bit less after deductions. So, at a minimum, it will take 10 years for income tax payments alone to repay the state payout for site prep. Other rebates add significantly to the state cost. Materials come from out of state, Welspun has said. The jobs have a multiplier effect in the community as the pay is spent, however. And there will be a temporary boost from construction work.
More on today's announcement:
The announcement was made at a news conference hosted by Martin M. Rhodes, Chairman of the Board of the Little Rock Regional Chamber of Commerce.
Commenting on this investment, Mr. B. K. Goenka, Chairman of Welspun said, “We are extremely delighted at the performance of our Little Rock facility, which has cemented the firm’s global reach in servicing some of the largest oil and gas companies in the world. We believe that this new investment will pave the way for Welspun to continue on its path of becoming one of the most respected line-pipe companies in the world and we are thankful to the City of Little Rock for the support that they have extended in fulfilling our dream.”
Initially employing more than 300 people, the company announced its first expansion one year later that added 230 jobs and an additional $30 million investment.
“Welspun invested in Arkansas when the national economy was in bad shape,” Governor Mike Beebe said. “That faith in our workforce and our business community has paid off for both Welspun and Little Rock, and today they are reinforcing their confidence in us with another significant investment in Arkansas.”
Located on 740 acres adjacent to the Port of Little Rock, Welspun’s state-of-the-art spiral pipe and coating facility has an annual production capacity of more than 350,000 tons of pipe.
“Welspun’s decision to develop a new small diameter pipe assembly line in Little Rock sends a strong signal to the economic development world that Little Rock is a prime location for business expansion in the U.S.,” said Little Rock Mayor Mark Stodola. “The City of Little Rock is pleased to partner with the Little Rock Regional Chamber and its Stock in The Rock investors, the Little Rock Port, AEDC and Governor’s Office in facilitating this third Welspun announcement in four years.
“Our citizens have a strong work ethic, and we are perfectly situated to easily reach the four corners of our country with port, rail, air and highway transportation systems,” Stodola continued. “Welspun, as both a new and expanding industry, understands this importance and is capitalizing on Little Rock’s becoming one of the preeminent pipe manufacturing locations in the world.”
Through this expansion, Welspun will expand their product line of steel pipes to include the production of 6-inch to 20-inch ERW steel pipes. The new manufacturing lines will be located in a second building on 44 acres purchased by the company.
“Welspun has a strong history of growth and profitability in the oil & gas line pipe industry and is at the cusp of becoming a leading, global integrated pipe manufacturer,” said Dave Delie, president of Welspun Tubular. “The track-record of operational performance at Welspun is unique and the management is committed to building on our current, impressive capabilities.”
“Engineering excellence is the core to Welspun and we believe that with this investment, we will catapult Little Rock as an important destination in the “World of Pipe,” said Rajesh Mandawewala, managing director of Welspun. “We have full trust and confidence in Welspun’s management team and believe that the team will continue to deliver superlative results.”
Additional information can be found at www.welspuncorp.com.