Note: This story was last updated at 7:05 p.m.
Seeking to clarify its plans, CVMR on Friday said it still hopes to build a metal refining facility in Oak Ridge to produce metal powders and “nano materials.” That investment, to be completed in three phases, could cost more than $300 million in the first phase and eventually employ 1,200 to 1,500 engineers and technicians, the company said Friday.
But they will not establish a Center of Excellence focused on research and development of the application of vapor metallurgy technology to an expanding group of elements, CVMR said in a Friday letter to Tennessee Governor Bill Haslam.
The company sought to publicly clarify its position after news stories this week suggested that the CVMR deal was dead. Some officials and developers had pushed back after those stories appeared in several Knoxville media outlets, saying they remained “cautiously optimistic” that the company could still come to Oak Ridge.
On Friday, Kamran Khozan, chairman and chief executive officer of CVMR (USA) Incorporated, told Haslam that the company’s original proposal was two-fold.
First, CVMR, which manufactures high-purity metal powders and super alloys, planned to establish the Center of Excellence. It was to primarily focus on research and development in conjunction with Oak Ridge National Laboratory and the University of Tennessee, and to help train new employees. It was not expected to generate substantial revenue.
But in September, CVMR told Randy Boyd, commissioner of Tennessee Economic and Community Development, that this part of the proposal was “based on a misunderstanding of the degree and nature of the support that was offered by the State of Tennessee to establish the Center of Excellence.
“Based on this realization, we concluded that it was not feasible to proceed at that time with the establishment of the Center of Excellence and that CVMR research and development…and the application of vapor metallurgy, in conjunction with ORNL, would continue to be conducted at our facility in Toronto.”
But the other part of the company’s proposal was to establish, in three phases, the metal refining facility in Oak Ridge. It could expand substantially over six years to employ more than 1,000 engineers and technicians, Khozan said.
“As we advised Commissioner Boyd last September, we hope that we will be able to establish this facility in Oak Ridge,” Khozan said.
He said CVMR is revising the structure of its proposal to establish the facility and is engaged in discussions with suppliers of raw materials and equipment. The company’s design team is working to finish the construction parameters for the next three phases of its plan, Khozan said.
“We hope that this amended plan will be completed within the next six months and that it will receive the same degree of support and encouragement from the State of Tennessee, the City of Oak Ridge, and Roane County,” Khozan said.
Read Khozan’s letter to Haslam here: CVMR Letter to Governor Haslam 4 12 2015.
The City of Oak Ridge also released a statement regarding the CVMR clarification.
“Due to recent articles, we are pleased to receive confirmation from CVMR of their continuing intent to locate major manufacturing and engineering facilities in Oak Ridge and the East Tennessee region,” City Manager Mark Watson said. “We look forward to welcoming and working with them on this successful project in the near future.”
“We know there continue to be conversations with the company,” said Parker Hardy, president of the Oak Ridge Chamber of Commerce.
“Our interaction with them has been very positive at the local level,” said Steve Jones, a consultant for the City of Oak Ridge. “But we also understand that confidentiality is very important for new companies as they get set up and pick out their locations.”
Roane County Executive Ron Woody had pointed out that Jones and Wade Creswell, president of The Roane Alliance, continued to talk to CVMR about investments in the area. Both Jones and Creswell, along with Tom Rogers at ORNL, had received special credit at the March announcement of CVMR’s plans to move company headquarters from Toronto to Oak Ridge.
Still, he’d like to see some movement at the site, Woody said.
“The further you get away from a ribbon-cutting, the more risky the projects become,” Woody said.
But earlier this week, he had said that there could be news from CVMR soon.
State officials said $12 million was included in a capital projects grant passed in the last session of the Tennessee General Assembly as part of a budget supplement. So far, no incentive money has been spent, said Clint Brewer, assistant commissioner for communications and marketing in the Tennessee Department of Economic and Community Development.
He said CVMR received an incentive offer from the state that the company initially accepted, prompting the announcement of their planned relocation earlier this year.
The company’s March announcement is one of the largest non-federal industrial announcements ever made in Oak Ridge. The last one on a comparable scale was when USEC, which is now Centrus Energy, announced a roughly $100 million investment at the former Boeing building in south-central Oak Ridge in 2007.
CVMR announced in March of this year that it was moving its operations to Oak Ridge from Toronto, Canada, and investing $313 million here and creating 620 jobs. The Friday announcement of 1,200 to 1,500 potential jobs doubled or more than doubled the employment estimate.
In March, CVMR, which has operations in 18 countries, said it planned to use the former Theragenics building at Horizon Center in west Oak Ridge for its headquarters and research and development. It’s not clear if that building would still be used.
CVMR planned to put 218 people to work right away in its new headquarters and add 402 high-paying manufacturing jobs later, Boyd said at the time.
“I can promise you that this is the start of a wave,” Boyd said in March.
CVMR said then that the manufacturing facility could be built about two miles away on 25 acres at an old steam plant near the former K-25 site, now known as Heritage Center. That property is owned by the U.S. Department of Energy.
“This is obviously an exciting announcement for Oak Ridge and East Tennessee,” Haslam said at the announcement.
Ores concentrated overseas in places such as the Phillipines, Indonesia, and African countries were expected to be shipped or sent by barge to Oak Ridge, where they would be processed.
CVMR USA President Michael Hargett said the company had commitments to manufacture by June 2015, and the company planned to begin operating by the end of May 2015. Systems and equipment that are now in Toronto would be moved to Oak Ridge, Hargett said.
But residents began to raise questions when there was no sign of work at the former Theragenics building months later.
There were reports this summer that a company executive had purchased a home in Oak Ridge, but government officials in Canada were trying to keep CVMR there.
The U.S. Department of Defense is CVMR’s largest customer. Others include NASA, General Electric, and General Dynamics.
CVMR uses ore concentrates to create pure metal powders. Those then go to manufacturers that make parts for customers, such as NASA and DOD. CVMR works with 52 metal powders and metal concentrates such as nickel, iron, and cobalt, and it produces about 34 unique products that can be used in batteries, 3D manufacturing, medical instruments, defense equipment, and the aerospace industry.
A state press release in March said a large part of the U.S. plant will be used to produce metal powders for 3D printing and graphene for advanced products.
More information will be added as it becomes available.
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