New plant promises 400 jobs

Published 11:45 pm Friday, July 18, 2014

VACHERIE — State and international officials are touting the creation of 400 new jobs with an average annual salary of $85,000 for the River Region thanks to a methanol-manufacturing complex location on the Mississippi River in St. James Parish.

Gov. Bobby Jindal and Yuhuang Chemical CEO Charlie Yao made the joint announcement Thursday that Yuhuang Chemical will make a $1.85 billion capital investment in a “world-scale” methanol-manufacturing complex at the Port of South Louisiana.

Yuhuang Chemical will create 400 new, direct jobs, with an average annual salary of $85,000, plus benefits, according to information provided by the governor’s office. In addition, Louisiana Economic Development officials estimate the project will result in 2,365 new indirect jobs in Southeast Louisiana and surrounding areas.

Construction will begin in 2016, with the first phase of the methanol project beginning operations by 2018, officials said.

Hiring will begin in 2015, with employment reaching 200 by 2017 and 400 six years later.

St. James Parish President Timmy Roussel said the local community welcomes Yuhuang Chemical to St. James’ diverse business and industrial family.

“This project should aid in bringing our unemployment levels even lower than the reductions already realized and also works well with improving our present economic situation,” Roussel said. “I would like to thank Yuhuang Chemical for considering St. James Parish and the River Region as their place to do business. I look forward to a healthy relationship.”

Port Executive Director Paul Aucoin said with expected methanol exports of up to 3 million metric tons annually, Yuhuang Chemical will create hundreds of well-paying jobs within the district and “enhance the Port of South Louisiana’s standing in foreign trade and maintain our standing as the largest energy transfer port in the United States.”

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.

Greater New Orleans Inc. President and CEO Michael Hecht said Thursday’s announcement is the first of a major mainland China chemical company investing in Louisiana history and heralds a new chapter for investment in Greater New Orleans “as we begin to develop and benefit from promising relationships across Asia.”

Officials at the groundbreaking said 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 to 30 percent of the methanol to be shipped by barge and rail and sold to North American customers.

“Building a new world-scale methanol unit in Louisiana is Shandong Yuhuang’s first major step in becoming a global player in the petrochemical industry,” Yao said. “Louisiana was the right choice for our company to locate our first operation in the United States. This facility’s location fits well with our strategy to leverage the advantage that natural gas feedstock provides.

“Our goal is to maximize technology innovation and develop our company into a petrochemical and fine chemical world leader, with an equally important reputation for being a resource-efficient and environmentally friendly global enterprise.”

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.

The company will also receive the comprehensive workforce solutions of Louisiana Economic Development FastStart, and Yuhuang Chemical is expected to utilize the state’s Quality Jobs and Industrial Tax Exemption programs.