Chemical Plant Owners in Ontario Plan for an Even Bigger Year in 2008

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Researched by Industrial Info Resources (Sugar Land, Texas)--Last year, an estimated $60 million in capital and maintenance project activity began construction within the Chemical Processing Industry (CPI) of Ontario. While not a banner year in terms of project investments when compared to prior years in the province, this is still significant considering the province's relatively small CPI plant population of fewer than 180. Total project spending planned to begin construction in the region during 2008 exceeds $88 million, an increase of more than 30% over last year and approaching the $100 million investment mark that the province has historically enjoyed annually.

A significant amount of this spending increase comes in the form of planned maintenance turnarounds with a total of $29 million in project activity, a 40% increase over last year. Much of this spending increase is the result of a major turnaround planned by INEOS Nova International SA (Fribourg, Switzerland) of its Sarnia, Ontario, styrene plant expected to cost an estimated $15 million to complete. Most of the remaining turnarounds planned in the province during 2008 will average between $1 million and $2 million.

Nova Chemicals Corporation (Calgary, Alberta) will be responsible for a significant portion of the new capital project spending identified for 2008 with an estimated $20 million planned for expansion or debottleneck of polyethylene capacity. Producers of plastics and resins make up nearly 17% of the CPI plant population in the province employing an estimated 2,950 people. An estimated $25 million of the total CPI project activity identified for 2008 will be in this segment of the CPI.

The size and makeup of the CPI in Ontario is expected to remain relatively the same in the coming year with no grassroot plants identified to begin operation or construction in the province and no plant closures pending in the near future, as well. In 2007, only four CPI plants ceased operations and shut down, eliminating less than 200 jobs from the market.

The upswing in project spending expected during 2008 is also consistent with the growth of its neighboring provinces of Western Canada. See related January 16, 2008, article - Western Canada's Chemical Industry Continues to Lead Canadian Chemical Spending.

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