An Outlook on Third-Quarter Spending in the Chemical Processing Industry

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Researched by Industrial Info Resources (Sugar Land, Texas)--A look ahead at the next three months shows that the Chemical Processing Industry (CPI) is moving along with a great deal more confidence than what the marketplace suggests. Industrial Info has identified more than $2.1 billion in capital and maintenance projects planned to begin construction in the United States or Canada during the third quarter of this year. Nearly $1.4 billion of that spending has been previously approved or funded, reinforcing the industry's own positive outlook for the near future.

So far, only $100 million in previously reported projects planned to begin construction during this quarter have been identified as canceled or placed on indefinite hold. About $485 million in capital projects has been submitted for approval in the hopes of having enough time to begin in the next three months. Despite the number of projects still pending final approval, the large number of projects already funded or under way for the quarter will likely be enough to sustain the industry's momentum through the summer months.

Nearly $300 million of the total spending this quarter will be for planned plant or unit maintenance turnarounds. The third quarter is generally a significant period for these projects as the summer months generally provide a time when the weather is favorable for outdoor construction and the very labor-intensive activities of most turnarounds. This spending represents over 110 individual maintenance projects identified by Industrial Info as part of its North American Project Database. These turnarounds generally require the use of multiple contractors at once, often employing hundreds of people 24 hours a day for weeks at a time.

Some of the largest projects planned to begin this quarter include plans by Kureha America Incorporated (New York, New York), Church & Dwight Company Incorporated (NYSE:CHD) (Princeton, New Jersey) and AlphaPet Incorporated (Decatur, Alabama). Each of these companies is planning projects that reach or exceed $100 million, and each has already selected an engineering or construction contractor to keep the project moving forward. In fact, every capital project planned to begin construction this quarter with a total investment value greater than $30 million has already been identified as having secured or selected an engineering or construction contractor. Time will quickly tell how successful the CPI will be in keeping these projects on schedule despite the numerous obstacles currently in its path.

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Industrial Info Resources (IIR) is a marketing information service specializing in industrial process, energy and financial related markets with products and services ranging from industry news, analytics, forecasting, plant and project databases, as well as multimedia services.