Industry Clusters Related to Steel Minimills
Frank Giarratani, Gene Gruver, and Randall Jackson, Principal Investigators

The advent of slab casting in EAF steel mills resulted in a new wave of minimill construction, during 1990's. In less than 10 years, eleven plants were constructed in the United States based on this new technology. Five were built in established steel industry agglomerations. The other new plants were built in regions that had little or no prior steel making activity--Greenfield locations. Our research investigates the process and results of industry clustering related to the advent of slab casting by EAF steel producers. We compare key characteristics of the interindustry relationships that developed around plants in Greenfield locations with those of new slab manufacturers who located in established industry agglomerations. The investigation brings new evidence to bear on (1) the strategies adopted by EAF steel plants for market entry, (2) the beneficial economic effects of co-location by steel makers and related facilities, and (3) the process of agglomeration in Greenfield locations. By the comparison of Greenfield plants with new slab plants in established agglomerations, the study hopes to identify key aspects of agglomeration economies as they bear on firm competitiveness in the steel industry, and especially on product and process innovations. Study results also will help to assess the beneficial impact of new steel minimills on regional economies.

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