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With China duties balancing trade climate, SC's JW Aluminum puts expansion in high gear

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JW Aluminum expansion (copy)

A $300 million expansion to upgrade equipment at the JW Aluminum plant in Goose Creek is underway. The basement being excavated by workers (foreground) will house part of a new rolling mill at the plant, which produces flat rolled aluminum for the construction and other industries. File/JW Aluminum/Provided

Tariffs these days seem to come and go at a president's whim.

But when the U.S. government placed anti-dumping duties on Chinese-made aluminum last year, the investors in JW Aluminum felt the time was right to begin an ambitious $300 million expansion at the metal maker's Goose Creek plant.

"The barriers went up and protected us a little bit, and now we feel good from an economic standpoint that we can invest," said Lee McCarter, CEO at JW Aluminum for close to a decade.

The expansion, to be done in two phases over three years, will double capacity at the plant on Old Mount Holly Road while relying solely on recycled aluminum for its raw material. New, state-of-the-art equipment was transported to the site last week and a combined 326,000 square feet of new construction will produce a continuous ribbon of flat-rolled aluminum for the home-building industry.

JW Aluminum plans to maintain full production as the new equipment eventually replaces the old, a process McCarter compares to "changing the tires while the car is running 100 mph."

The company also is moving its corporate headquarters to Daniel Island, where executives will oversee operations at four U.S. sites that employ about 750 people — more than half of them in Goose Creek.

"We've outgrown this place," McCarter said of the administrative space in Goose Creek. "We've had people doubling up in offices."

The work represents the most significant investment in a U.S. aluminum plant in nearly a decade, and it will make JW Aluminum one of the most technologically advanced and environmentally friendly continuous cast facilities in the world.

JW Aluminum

Edwards Moving & Rigging transports components of a nearly 500-ton MINO Mill down St. James Avenue en route to JW Aluminum in Goose Creek earlier this month. The new rolling mill is part of the first phase of JW Aluminum's $300 million expansion. Brad Nettles/Staff

None of the work would have been possible, however, if it hadn't been for the import duties.

McCarter and The Aluminum Association, an industry lobbying group, had been working for years to get duties in place to counter the cheap aluminum dumped on the U.S. market by Chinese manufacturers being subsidized by their government.

A study by the Organization for Economic Cooperation and Development found China provided its aluminum industry with more than $70 billion in subsidies between 2013 and 2017. The overcapacity had depressed aluminum prices and forced U.S. manufacturers to cut production.

The duties, which can exceed 100 percent, took effect at the end of last year, and it is now cheaper to buy U.S.-made aluminum than metal imported from China.

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"The real issue on the world stage with aluminum and fair competition is China," Jean-Marc Germain, CEO of Constellium N.V., which has several U.S. facilities, said during a recent conference. "That's why we're saying a targeted action against those players in China who don't play by the global rules is the solution to our problems."

With the duties in place for at least a five-year period, McCarter set out to convince the big investment firms that own JW Aluminum — Goldman Sachs and KKR among them — that the more balanced trade environment could pay off if the Goose Creek company updated its equipment.

Last year, JW Aluminum closed on $285 million in financing to fund the expansion, which will create another 50 jobs at the Goose Creek site.

"A lot of things had to change to compete in this new world," McCarter said. "Now that we’ve got our own internal business processes corrected,we’ve got a solid balance sheet and solid owners. We're doing the investment that will make us the most competitive producer in the world."

JW Aluminum caster (copy)

A Vermont factory is shipping this newly built metal casting machine to the JW Aluminum plant in Berkeley County. It is part of a $300 million expansion at the Goose Creek plant. Hazelett Corp./Provided

It hasn't always been a quick or easy process. When McCarter and Stan Brant, the company's chief operating officer, arrived about a decade ago they found a company with aging equipment and ailing finances. They consolidated business systems and customer service that had been spread throughout the company's locations, raised salaries and invested in training to shore up the workforce.

Now, financial results are posted monthly for all employees to see, and everyone is aware of the company's goals and how their individual work can help achieve those goals. Income at JW Aluminum has nearly doubled in just the past three years.

McCarter sees more opportunity ahead, particularly with a national housing market in which 16 million homes are expected to be built in the next decade and roughly 50 percent of existing homes are at least 20 years old, requiring updated equipment like the guttering, window frames and air conditioners manufacturers make out of JW Aluminum's products.

Even if the duties aren't renewed, the new equipment and processes put in place at JW Aluminum will make the plant competitive with overseas metal makers, McCarter said.

"I'm not looking for an advantage against my competition," McCarter said of the current trade situation. "But if they are getting dollars from their government, which is basically to subsidize the workforce for full employment, that's not fair. We just want a level playing field."

JW Aluminum was founded in Goose Creek as Jim Walter Metals, a single-facility operation with 10 employees. The company currently makes rolled aluminum products for about 250 North American customers, primarily service the building and construction, air-conditioning and packaging and container markets.

In addition to the Goose Creek site, which also serves as the company’s headquarters, JW Aluminum operates mills in St. Louis; Russellville, Ark.; and Williamsport, Pa. 

Reach David Wren at 843-937-5550 or on Twitter at @David_Wren_

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