Stupp Corp. said Thursday it is expanding its pipe manufacturing facilities in north Baton Rouge and hiring 128 people, a project driven by increased demand for oil and gas pipelines tied to an ongoing boom in shale formation production.
The move comes three years after Stupp laid off 114 workers amid a slumping oil industry, when Stupp said its industry was going through a “rough” period.
The company is spending $22 million upgrading its two steel pipe manufacturing plants at its site on Ronaldson Road in north Baton Rouge, near the Baton Rouge Zoo. The company’s last major expansion was in 2009, when it spent $90 million on a new spiral weld mill, a move that doubled its workforce to roughly 400.
Privately-owned Stupp currently employs 338 at the site, and the new hiring is expected to lift that number to 466. The company previously employed 600 at the site in 2012, when oil was trading above $100 a barrel. At the time of the layoff three years ago, oil was trading at $33 per barrel.
The price of oil has been increasing sharply since Christmas Eve, when it was at just over $42 per barrel and is now hovering near $60. That rebound follows a 44 percent plunge from a high in October of just over $76 per barrel.
The jobs announced Thursday will have an average annual salary of $60,567, plus benefits, according to Louisiana Economic Development. The expansion will create 296 indirect jobs. Construction activity will support 93 jobs.
“Ultimately any decision like this to make a major capital investment comes down to the economics,” said Chip McAlpin, Stupp’s vice president for corporate strategy and development. “The economics of the oil and gas and associated business really justifies the investment.”
The vast majority of Stupp’s business is making oil and gas transmission pipelines, McAlpin said.
The boom in shale oil and gas production in recent years, especially in Texas, has dramatically increased the demand for pipelines, as drillers in west Texas fields are unable to get the product out fast enough. The bottlenecks have led companies to flare large amounts of natural gas and take steep price discounts.
“As a result of that it drives the economics for pipeline growth because there’s more product than there is available that exists to get to market or to get to processing plants,” McAlpin said.
Louisiana Economic Development promised the company a $500,000 performance-based grant to offset the cost of roadway improvements for increased truck traffic associated with the expansion. The company also is expected to receive FastStart workforce benefits, as well as incentives through the state’s Quality Jobs and Industrial Tax Exemption programs.
McAlpin declined to comment on whether the company was considering another site for the facility, but the Baton Rouge site is the only place where St. Louis-based parent company Stupp Bros manufactures oil and gas pipes. It also has facilities in Kentucky, where it makes girders for bridges, and others that make products for construction projects.
Stupp also has been affected by President Donald Trump’s trade policies. Since Trump added tariffs on steel and aluminum imports, Stupp has filed several objections to requests by other companies that were asking to be excluded from the tariffs.
Companies have sought exclusions from the tariffs because they said they cannot find the needed steel products domestically. Stupp has objected to such requests where it can supply the products, McAlpin said, adding the company thinks the tariffs have been a benefit for the domestic steel business, even though its costs have increased.
Mayor Sharon Weston Broome, who lauded the expansion at a press conference at Stupp’s facilities Thursday, threw her support behind the company’s Industrial Tax Exemption, or ITEP, request. The program has garnered controversy locally as the school board and other authorities have exercised newfound discretion over the tax breaks.
Broome said the expansion attests to Baton Rouge’s “booming business climate.”
McAlpin declined to comment on the investigation into the death of a 29-year-old Stupp worker, Stephen Deggs, who died in an industrial accident in September. He said the U.S. Occupational Safety and Health Administration investigation, as well as an internal probe, are ongoing.
The expansion also comes as Georgia-Pacific is laying off 600 of its roughly 900 workers at its Port Hudson paper mill nearby. A small chemical plant operated by BASF and a Thompson Pipe Group fabrication plant nearby also are leaving dozens without work with their closures.
Adam Knapp, president and CEO of the Baton Rouge Area Chamber, said Stupp’s hiring is an opportunity for those workers who were laid off.
“For those of you that have been affected in the community by layoffs, for example that happened in the earlier part of this year, this is a great opportunity to stay in Baton Rouge, stay employed in manufacturing and continue to have a very vibrant quality of life here in Baton Rouge,” Knapp said.
Stupp has been in business in Baton Rouge since 1952. It moved to its current site at Ronaldson Road in 1967.