NEW YORK U.S. aluminum extruders applauded news that a proposed $1.5-billion secondary aluminum manufacturing facility in Barstow, Calif., is unlikely to come to fruition, citing domestic capacity restrictions and widespread concern over the projects funding sources.
Several extruder sources told AMM that they had grown increasingly worried about the projects developer, Newport Beach, Calif.-based Scuderia Development LLC, including the companys business partnerships in China and its intentions within the U.S. aluminum extrusion industry.
"This company appears to be intent on creating some kind of greenfield expansion in the United States," one extrusion seller said. "Exactly what downstream products would they make? They have not really elaborated on this. They have said the plant would employ 2,000 people, which is a massive operation. What would 2,000 people be making exactly?"
Scuderia has said the project would have included an aluminum casthouse, rolling mill and extrusion mill, all designed to produce 1 million tonnes of processed aluminum per year, according to documents filed with the Barstow City Council. The documents also said the project would utilize about 2.95 million square feet of manufacturing space, with a total estimated annual payroll of $80 million.
The project had stalled in recent months due to the potential for exposure to high electricity costs in California, Barstow city manager Charles C. Mitchell said earlier this week, noting that the project was unlikely to be developed as originally envisioned (amm.com, Aug. 19).
A second extrusion source said that the source of funding for the project was not his primary concern. Rather, the projects "massive scale" was responsible for the recent firestorm of criticism from within the industry.
"I heard they (Scuderia) were talking about putting in 12 extrusion presses," he said. "Twelve new presses in California would be absolutely astronomical and somewhat devastating to established extrusion businesses in the region."
Criticism of project would have occurred "regardless of Scuderias international business affiliations," the source said in reference to the scrutiny Scuderia has been drawing for its alleged ties to China Zhongwang Holdings Ltd., the worlds second-largest producer of aluminum extrusions.
"There would absolutely be the same uproar, even if the company wasnt affiliated with Zhongwang," the second extrusion source said. "If an American company put in 12 presses we would be saying the same types of things. Besides, no U.S. bank would ever approve that kind of project. There is just not enough current capacity in the United States for a large-scale project of this nature to maintain profitability."