Yuhuang Chemical to invest $1.85 billion in Louisiana
The project by Yuhuang Chemical Inc., a subsidiary of Shandong Yuhuang Chemical Co. Ltd., represents the first major foreign direct investment by a Chinese company in Louisiana.
Yuhuang Chemical will create 400 new direct jobs, with an average annual salary of $85,000, plus benefits. In addition, Louisiana Economic Development estimates the project will result in 2,365 new indirect jobs, for a total of more than 2,700 new jobs in the Southeast Region of Louisiana and surrounding areas of the state.
At peak building activity, the company estimates the project will generate 2,100 construction jobs. Construction will begin in 2016, with the first phase of the methanol project beginning operations by 2018.
One of China's leading chemical companies, Shandong Yuhuang Chemical recorded more than $4 billion in 2013 sales and employs more than 5,600 people worldwide. Its newly formed Yuhuang Chemical subsidiary will make its first major U.S. investment in St. James Parish, where it has secured an option to purchase more than 1,100 acres for a three-phase project next to the Plains All-American Pipeline terminal.
After the first methanol plant is completed, the company will build a second methanol plant and reach an annual capacity of 3 million metric tons per annum of methanol. A third phase will include a methanol derivatives plant that will produce intermediate chemicals. Most of the project's methanol will be exported by oceangoing vessels for use in the parent company's production of downstream chemicals in China, with approximately 20 percent to 30 percent of the methanol to be shipped by barge and rail and sold to North American customers.
Yuhuang Chemical has selected China Huanqiu Contracting & Engineering Corp., known as HQC, to complete engineering work for the project. The company has licensed methanol technology from Air Liquide Global E&C Solutions. Hiring will begin in 2015, with employment reaching 200 by 2017 and 400 six years later.
LED began discussing the potential project with Yuhuang Chemical in February 2014. To secure the project, Louisiana offered the company a competitive incentive package that includes two performance-based grants: $9.5 million to be paid over five years beginning in 2017 to offset infrastructure costs of the project and $1.75 million to be paid over 10 years to partially defray the costs of necessary riverfront access and development.
In addition, the company will receive the comprehensive workforce solutions of LED FastStart, ranked the No. 1 state workforce training program in the country, and Yuhuang Chemical also is expected to utilize the state's Quality Jobs and Industrial Tax Exemption programs ■