Fla. firm slated to receive up to $1.25 billion in bonds
A Florida company announced plans to build five plants in Pointe Coupee Parish that will convert agricultural waste into fertilizer.
BioNitrogen Corp., of Doral, Fla., said it has been granted preliminary approval by the Louisiana Community Development Authority to issue up to $1.25 billion in tax-exempt bonds to acquire land for the plants and build and develop the facilities.
BioNitrogen said it signed a letter of intent to buy about 250 acres of land next to the Pointe Coupee Parish Port near Lettsworth that will be used for the plants.
The LCDA’s move clears the way for BioNitrogen to go to the Louisiana State Bond Commission for final approval to issue tax-exempt bonds for the project, said Bryan Kornegay Jr., president and chief financial officer of BioNitrogen.
He said each of the Pointe Coupee plants would hire about 52 full-time employees, so the entire facility would create 260 jobs.
Kornegay, who grew up in Baton Rouge and graduated from Episcopal, said there would be two sources of fuel for the Pointe Coupee fertilizer plant: scrap trees and waste from saw mills and sugar cane bagasse.
The Pointe Coupee Parish plants would be built in parallel with a fertilizer plant in Hardee County, Fla.
Last week, BioNitrogen received approval from the state of Florida to issue up to $175 million in tax-exempt bonds to build the plant in the central part of the state. BioNitrogen also has a deal with CF Industries to remove trees from lands in Florida where it mines phosphates; the scrap wood will be used by the Hardee County plant to make fertilizer.
Kornegay said it makes sense to build fertilizer plants in the South because of the steady stream of feedstocks, or raw materials.
“In the Midwest, when Mother Nature is not nice, there are things like droughts, which create less biomass,” he said. “In the South, when Mother Nature is not nice, there are things like hurricanes, which create more biomass.”
The milder climate also allows for trees to be cleared and trimmed year-round, generating a steady stream of fuel, he said.
BioNitrogen will use its proprietary technology to turn the agricultural waste into urea fertilizer, which is about 46 percent nitrogen. Nitrogen is a key component of fertilizer.
Kornegay said U.S. farmers import 10 billion tons of fertilizer a year, so the demand exists for an environmentally friendly product. BioNitrogen already has a deal with United Suppliers, an Iowa agricultural wholesaler, to buy fertilizer, he said.
“I’m not concerned about North America,” he said.
And unlike some projects that use biomass for fuel, Kornegay said BioNitrogen doesn’t need government subsidies to be profitable.
In the next two months, BioNitrogen expects to close on the purchase of the Pointe Coupee land and move forward with planning, zoning and permitting for the site. At the same time, the company will be working on getting approval to sell the bonds and preparing to take them to market.
Kornegay said he hopes to start construction on the Pointe Coupee plant in 2014, with 2015 being the first full year of operations. The five plants would be built in succession.
Adam Knapp, president and CEO of the Baton Rouge Area Chamber, said the organization has been working with BioNitrogen since August to find sites for the plants. The company looked at sites from Natchez, Miss., to New Orleans, before deciding on Lettsworth because of the proximity to the Mississippi River, Red River and Atchafalaya Basin.
“A project like this is in our wheelhouse,” Knapp said. “We have a lot of nitrogen producers in the area, but this is using a different input to get there.”
BioNitrogen will be able to use the existing manufacturing and labor force, along with an existing supply of waste, to produce a new product, he said.
“It’s nice to reconnect with somebody from here and bring them back, where they can create jobs,” Knapp said.