German manufacturer Beckmann Volmer said Thursday it plans to build a $10 million plant in Osceola to produce steel components for wind turbines that will employ up to 500 people.
The company said it will initially hire 300 people to work at the plant, and will later spend an additional $7.5 million more to expand and hire another 200 workers. The factory will pay an average wage of $18 per hour.
The turbine parts will be used about 60 miles away at a turbine manufacturing plant being built by Nordex USA Inc., a factory that is to have 100 workers by the end of 2010 and 240 workers when it reaches full production in 2012. Ultimately, the plant could have 700 workers.
The state offered an incentive package to Beckmann Volmer that included $1.5 million from the Governor’s Quick Action Closing Fund and $2.5 million from a community development block grant. The company will get a cash rebate equal to 5 percent of payroll for 10 years and an abatement of state corporate taxes for 14 1/2 years.
The state also is to provide training assistance and a refund of some state and local sales and use taxes.
A consultant on the site selection, Florian A. Stamm at Smith Gambrell & Russell LLP of Atlanta, said Arkansas had the business elements Beckmann Volmer was seeking.
“Qualified workforce, transportation costs and a pro-business environment were leading criteria in identifying east Arkansas as location for the investment,” Stamm said.
Beckmann Volmer was begun in 1995 with a handful of workers. The company has locations in China and Poland and currently employs 650 workers.
When Nordex, also a German company, broke ground in 2009, company Vice President Joe Brenner said the firm wanted to have local suppliers, “a neighborhood of local wind players,” as he put it.
Gov. Mike Beebe met with Beckmann Volmer executives during a 2009 trade mission to Europe. The company noted on its website that the meeting “prepared a sound basis for the upcoming negotiations.” Beckmann Volmer said Arkansas was one of five U.S. locations it was considering.
The main component produced in by Beckmann Volmer in Osceola will be turbine main frames, which support the turbine’s structure.
Beebe alluded to other companies that have picked Arkansas for wind energy-related factories. Japan-based Mitsubishi Power Systems Americas pledged to start construction in the fall in Fort Smith on a turbine plant that could employ up to 500 workers. A hitch with the Mitsubishi plant is litigation the company is engaged in with General Electric. Mitsubishi sued GE Thursday over GE’s earlier claims of patent infringement.
Denmark-based LM Wind Power, formerly LM Glasfiber, has two plants in Little Rock churning out windmill blades.
The recession and credit crisis affected the wind energy sector, slowing production at plants that were open and delaying plans to open others.
Polymarin Composites, a Netherlands-based blade maker, planned a 2009 opening of a Little Rock plant and expected to have 630 workers. The company has put its plans on hold.