Ohio Benefits from Auto and Energy Activity in the Form of Increased Capex at Industrial Plants

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Researched by Industrial Info Research (Sugar Land, Texas)--U.S. auto sales are up again this year, including a 13% increase in March 2012 over last year. Detroit automotive manufacturers have recovered and are investing in new facilities. Chrysler LLC (Auburn Hills, Michigan), for example, is spending $500 million to expand the North Liberty Assembly Plant in Toledo, Ohio. This has buoyed demand for steel. Capital spending is strong at U.S. steel mills even though capacity utilization is not stellar. Steelmakers are investing in mill upgrades and modifications. In addition, oil and gas development, especially to support development of the Marcellus and Utica Shale formations in Pennsylvania, is driving supporting projects. Ohio's proximity to the action has led to a number of industrial projects being located in the state.

Ohio has 450 active industrial projects totaling $29 billion. The Power Industry accounts for 41% of the value of all projects in Ohio. Second after the Power Industry is the Metals & Minerals Industry, which has 45 projects totaling $4.2 billion.

Click on the image at right to view a chart showing the breakdown of active projects in Ohio by industry.

Enterprise Products Partners LP (NYSE:EPD) (Houston, Texas) is studying a pipeline construction project that will transport ethane from plants processing natural gas from the Marcellus and Utica shales in Pennsylvania to Texas. The Ohio portion of the 1,200-mile pipeline has an estimated total investment value of $230 million.

Timken Company (Canton, Ohio) is planning about $330 million worth of capital and maintenance projects at its mills in Ohio. This includes $225 million to expand the Faircrest Steel Mill. Construction is expected to begin this summer. The company recently completed the addition of an ultrasonic test inspection line as part of an additional $40 million forge press addition also under way at the Faircrest mill.

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