Wednesday, April 17, 2013

$850 Million Ammonia Plant Coming to Louisiana

Australian fertilizer and explosives manufacturer Incitec Pivot, PLC has announced construction of a $850 million ammonia plant in the New Orleans suburb of Waggaman.  The company's investment thesis from its presentation says it all, but I'll boil it down for you:  cheap natural gas, incentives to reclaim a brownfield site and access to the U.S. end market.

This is an investment analysis that we will see again and again.

[Update 10:15 p.m. ...and now news comes of a big explosion at a fertilizer plant in West, Texas this evening.  Of course, ammonium is a major component of fertilizer (and explosives).  While I'm pretty excited about the higher level of manufacturing in the U.S., we must also remember that large scale chemical manufacturing has a large set of risks.  Life is full of double edged swords.]

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