Polyurethane blending facility to cost $42.6 million
GEISMAR — German chemical manufacturer BASF will spend $42.6 million to build a new polyurethane blending facility at its Geismar operation in Ascension Parish, creating 22 new direct and 145 indirect jobs, state and company officials said Thursday.
Construction is expected to start in June. The facility is expected to open in the second quarter of 2015, creating greater efficiency and shortening BASF’s supply chain to customers, company officials said.
The expansion is the fourth announced at the BASF complex on La. 30 since 2009, boosting the company’s capital investments in Louisiana to more than $350 million over the past four years and bringing the number of expected direct and indirect jobs to more than 600.
The company completed a methylamine plant in 2011 and will open a surfactant plant and a formic acid plant in 2014.
The permanent direct jobs from the new plant will have an average annual salary of more than $72,300 a year, plus benefits.
The work also will create an estimated 160 to 175 construction jobs, state and company officials said.
The general manager of BASF’s Geismar site, Senior Vice President Tom Yura, credited “an absolutely incredible one-two punch” of the business climate set by Louisiana’s leadership and continuing low natural gas prices for the latest expansion.
“The price of natural gas, and you’ve heard this a couple of times, is really facilitating an economic renaissance for manufacturing in the United States,” he said during a news conference inside a BASF DNT facility warehouse.
“This is a key enabler for us to take a look and to produce at world-scale economics right here in Louisiana and export to other parts of the world and keep products here at home.”
The blending facility will be built in a vacant gravel lot near where the news conference occurred Thursday.
The DNT plant is next-door to the manufacturer’s main complex, which has been in Ascension since 1958 and owned by BASF since 1969.
Yura said later that the new facility will be at the end of a manufacturing chain at the Geismar complex, which uses natural gas both as energy and a feed stock.
BASF will benefit from low natural gas prices several times over through that chain, he said.
“It’s the global equalizer,” he said of low natural gas prices.
BASF DNT site manager Julie Fay told the news conference that early planning had earmarked the new blending facility for Houston.
The project had been named the “Yellow Rose” for its likely Texas destination before company officials realized Geismar was a better site.
Gov. Bobby Jindal credited his administration’s efforts at cutting government spending, overhauling education and focusing on economic development with drawing job-producing expansions such as BASF’s.
“I just wanted to say, and maybe I shouldn’t say this, I’m glad we plucked that yellow rose from Texas and brought it to Louisiana,” he said.
Jindal said later that the Department of Economic Development offered BASF a discretionary incentive of a $1.2 million modernization tax credit over five years if BASF meets payroll and investment targets.
He added the company is expected to use the state’s Quality Jobs and industrial tax exemption programs and potentially the Fast Start workforce training program.
Parish officials said no incentives from parish government are expected.
Fay said the blended polyurethanes are used to make flexible foams for furniture backing and mattresses and for the automotive and housing industries.
BASF employs about 1,500 employees and contractors at the Geismar operations and 2,000 overall in Louisiana, company officials said.