Russian firm plans $1.5B plant, distribution center

EuroChem, a Russian fertilizer company, said Wednesday it will build its first manufacturing facility in the Americas, a $1.5 billion plant that will be constructed in either Carville or St. John the Baptist Parish.

The company will select a site for the ammonia and urea production plant and a distribution center within the next year, Dmitry Strezhnev, EuroChem’s CEO, said during a news conference at the Governor’s Mansion. The project is expected to create 200 permanent jobs, with an annual payroll of $11.6 million. The average annual salary for those jobs will be $58,000, plus benefits. An estimated 1,378 indirect jobs will be created.

Plans are to start construction for the plant in 2015. Construction will take four years, and at its peak will support an estimated 2,000 construction jobs. Strezhnev said EuroChem decided to build a fertilizer production plant in the U.S. because of the low natural gas prices and growth opportunities in America, as well as in markets such as Mexico and Brazil.

The company will look at several factors while it decides between the Carville and the St. John sites: access to the Mississippi River, access to rail lines, construction sustainability and emissions issues, Strezhnev said.

The Carville site that could be the home for the plant is about 2,150 acres and on land owned by the Louisiana Department of Corrections, said Stephen Moret, Louisiana Economic Development department secretary. That land has been for sale for more than two years. EuroChem has deposited $12 million in an escrow account to buy the Carville property, subject to a vote of the Legislature’s Natural Resources Committee. The land sale should go before the committee in a few weeks, Moret said.

EuroChem also has an option with a private landowner for a site in St. John the Baptist. Because the agreement is between a business and an individual, LED officials didn’t have details on the property.

The state began meeting with EuroChem about a potential Louisiana manufacturing and distribution project in August 2012.

Gov. Bobby Jindal said the company could have built the plant anywhere in the world, but chose Louisiana.

“As one of the world’s largest fertilizer companies, EuroChem recognized that our mix of resources makes Louisiana the best place in the world for business investment,” Jindal said.

To secure the project, LED offered EuroChem an incentives package that includes a $6 million performance-based grant to offset the costs of site infrastructure improvements. In addition, the company will use the FastStart workforce training program and is expected to utilize the Quality Jobs cash rebate and Industrial Tax Exemption programs.

Glenn Schexnayder, senior vice president of sales for Associated Terminals, which operates at the Port of South Louisiana, said EuroChem looked at a dozen or more locations in Louisiana before whittling its choices down to two sites.

Formed as an agrochemical company in 2001, EuroChem built and acquired strategic mining and manufacturing assets to become one of the world’s leading fertilizer manufacturers. With $5.4 billion in revenue in 2012, EuroChem is approaching a top five position globally among fertilizer companies. The company employs 20,000 people worldwide.

EuroChem has developed its facilities in Western Europe and Russia. EuroChem’s south Louisiana project may be its first manufacturing facility in the Americas, but the company is already established with farmers and industrial consumers in the market through trading offices it operates in Tampa, Fla., and São Paulo, Brazil.

EuroChem has natural gas, mining, fertilizer production, logistics and distribution facilities and infrastructure in Russia and the Commonwealth of Independent States, Europe, the U.S., Mexico and Southeast Asia.

Its products are used in over 100 countries, while its operations represent 2 percent of global nutrient capacity and 4 percent of mineral fertilizers sold in Europe.