GEISMAR — Huntsman Corp. announced Thursday it will spend $78 million to expand its chemical plant, a move that will create 17 new full-time jobs and 100 construction jobs.
The expansion will increase the amount of methylene diphenyl diisocyanate produced at the plant. MDI is used in making polyurethanes, a key component in car seats, furniture, footwear adhesives and energy-saving insulation products.
Once the expansion is completed at the end of 2014, capacity will increase by 50 kilotons to a total 500 kilotons of MDI. Process improvements at the plant are already under way.
The 17 new jobs will pay an average salary of $92,000, plus benefits, according to figures provided by the Louisiana Economic Development Department. LED estimates the project will result in 60 indirect jobs.
Huntsman has just under 400 employees at its Geismar plant, many of whom attended the project announcement.
Jon M. Huntsman, founder and executive chairman of the Texas speciality chemicals firm, said 25 percent of the MDI produced at the Geismar plant is bound for use overseas and that share will increase to 30 percent once the expansion is completed. Despite this, Huntsman said his firm never considered doing an expansion anywhere but in Louisiana.
The state’s incentives package includes a $1.5 million modernization tax credit, payable over five years. In addition, the company is expected to use the state’s industrial tax exemption program.
“Adding manufacturing jobs is how America rebuilds its might,” said Huntsman, who founded the company in 1970 after he stepped down as president of a joint venture involving Dow Chemical. Huntsman now has more than 12,000 employees worldwide and posted $12 billion in sales during 2012.
The expansion wasn’t a surprise. The company announced in August that it had commissioned engineering design studies for an expansion in Geismar to take advantage of cheap natural gas from shale formations.
“Louisiana is centered in the middle of a natural gas boom because of our access to shale gas reserves, and it’s helping to create thousands of opportunities for our people,” Gov. Bobby Jindal said.
Many of those opportunities are happening in Ascension Parish, which has a cluster of current and potential projects poised to take advantage of the ample supply of natural gas.
Tommy Martinez, Ascension Parish president, joked that Jindal should get an apartment in the parish because he’s been making so many economic development announcements there.
Mike Eades, president and CEO of the Ascension Economic Development Corp., said discussions with Huntsman about an expansion first started a year and a half ago, but heated up in October.
The company also announced a $57 million investment to upgrade a plant in Rotterdam, the Netherlands. In addition to Geismar and Rotterdam, Huntsman Polyurethanes operates a third MDI facility in Caojing, Shanghai.
Huntsman Corp., based in The Woodlands, Texas, operates 75 facilities in 27 countries and serves customers in more than 100 countries.