Arconic Inc. announced Monday that it will install a new horizontal heat treat furnace at its Davenport Works facility, marking the third significant capital investment for the Riverdale plant in the past six years.
In a news release, Arconic said the $137 million furnace will expand its capacity to capture growth in the aerospace and industrial markets.
The furnace is part of nearly $160 million in total investments that Arconic has planned over the next two years, according to the Iowa Economic Development Authority. The authority approved $1.5 million in direct economic assistance to Arconic Inc. in action Friday. The assistance, which will be in the form of a $1.5 million forgivable loan, will be in addition to $4.3 million in tax credits.
According to Arconic, the new furnace will enable it to heat treat longer and thicker plate than ever before, including material for Davenport Works’ new thick plate stretcher. The company said heat treatment is a required step in the production of certain high-strength products, and essential for products intended for large aerospace and industrial applications.
"This investment will help meet both existing and future customer demand," said Tim Myers, president of Global Rolled Products and Transportation, and Construction Solutions. "With this new capability, we will meet increasing demand for plate used for aircraft wing ribs, skins and other structural components, particularly in single-aisle builds. It also opens the door to growth in other markets, such as semi-conductors for consumer electronics and injection molding for automotive applications."
The furnace project comes on the heels of this year's installation of a $150 million thick plate stretcher at Davenport Works. The stretcher, which began commercial production, is the largest thick plate stretcher in the world. The Quad-City plant also completed a $300 million expansion in 2014 to expand its automotive capacity and capabilities. It was first announced in 2011.
The city of Riverdale also is supporting the project with plans for $3.5 million in tax increment financing over 17 years, according to the state. Arconic said once the contract is finalized, the assistance will include tax, financing and R&D credits as well as training grants. The furnace project is expected to create 30 new jobs and retain 250 others at a qualifying wage of $18.30 per hour, the state said.
Liz Murray Tallman, chief economic development officer for the Quad-Cities Chamber of Commerce, called Arconic "a driver of new jobs and economic growth in the Quad-Cities."
Construction on the furnace project is expected to begin late this year with commercial production launching in 2019.