Sulfuric Acid Producers Exceed 2008 Spending Forecast

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Researched by Industrial Info Resources (Sugar Land, Texas)--At the start of the year, Industrial Info had identified an estimated $250 million in planned capital and maintenance spending at chemical plants located in the United States. Based on project activity reported as part of Industrial Info's North American Project Database, total investments for projects beginning construction this year could top $330 million or more. A significant portion of this spending is compliance-driven to meet drastic emissions reductions. E.I. du Pont de Nemours & Company (NYSE:DD) (DuPont) (Wilmington, Delaware) is expected to begin sulfur dioxide emissions reductions for at least two plants this year costing an estimated $90 million. Similar projects are already in the design phase for next year with similar emissions reductions at sulfuric acid plant locations in Kentucky and Ohio.

There are several capacity projects planned for completion and potential start-up before the end of the year, including at least one by General Chemical Corporation (East Hanover, New Jersey). General Chemical is nearing completion of an expansion of a sulfuric acid plant in Augusta, Georgia. When complete, this project is expected to increase the plant's operating capacity to 1,200 tons per day and include a new process to produce sodium bisulfate. Parsons Corporation (Charlotte, North Carolina) provided engineering and construction management for the estimated $10 million project while Summit Industrial Services LLC (Athens, Georgia) served as the general contractor. CF Industries Holdings Incorporated (NYSE:CF) (Deerfield, Illinois) has secured a contractor to expand unit B of its Plant City, Florida, plant to an estimated 1,600 tons per day up from its current rate of 1,200 tons per day by the end of the year.

Looking ahead to spending already identified for 2009, there is more than $120 million planned for this segment of the Chemical Processing Industry in the United States. A drastic improvement in demand for fertilizers over the last year, which makes up for a majority of sulfuric acid consumption, continues to provide growth opportunities for acid producers. Petroleum refiners also use sulfuric acid in alkylation processes, and major refinery expansion projects planned across the country, especially in the Gulf Coast region, will provide a home for some portion of new capacity in the future. There is at least one grassroot sulfuric acid plant planned in Texas that is dependent upon Eastman Chemical Company (NYSE:EMN) (Kingsport, Tennessee) moving ahead as planned for a major coal gasification plant planned in Beaumont, Texas.

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