Fertilizers Continue to Aid in Growth of North American Chemical Processing Market

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Researched by Industrial Info Resources (Sugar Land, Texas)--With continuing drought conditions, the low price of natural gas, and U.S. farming subsidies that encourage farmers to plant crops, it is not surprising that U.S. and Canadian fertilizer producers are planning large capacity increases.

Industrial Info is currently tracking 29 capacity-increasing capital projects producing phosphoric or nitrogenous fertilizers. These projects are expected to have a total investment value of approximately $5.5 billion.

Plant locations with previously idled units are now being considered for restart, given the very favorable economics and potential profits. Industrial Info has identified three plants with idled units where the plant owners are looking to restart or rebuild those units. PCS Nitrogen, a subsidiary of Potash Corporation of Saskatchewan (NYSE:POT) (Saskatoon, Saskatchewan), is already under construction with the restart of a 450,000-ton-per-year ammonia unit in Geismar, Louisiana. The unit has been idled since 2004, and much of the work that is required is environmentally based, including asbestos and lead-based paint removal, and is expected to be completed by the end of 2012.

The second plant is owned by El Dorado Chemical, a subsidiary of LSB Industries (NYSE:LXU) (Oklahoma City, Oklahoma), and is located in El Dorado, Arkansas. The plant is looking to rebuild its direct strong nitric acid unit in 2013 after an explosion.

The third plant is owned by Dyno Nobel (Salt Lake City, Utah) and is located in Maitland, Ontario. Dyno Nobel is reviewing the restart of four fertilizer units in this plant over the next couple of years.

Not only are idled units planned to be restarted, but new plants and units are expected to come online over the next couple of years. Industrial Info has discovered six new grassroot plants and one brownfield plant that could manufacture more than 2.5 million tons per year of fertilizers when complete. BioNitrogen (Doral, Florida) is planning two new grassroot plants in Texas, one in Lubbock and one in Levelland. Each of these plants will utilize a technology that will gasify a biomass feedstock to produce about 124,200 metric tons per year of granulated urea. The plant in Lubbock is expected to be manufacturing product by the end of 2014, while the plant in Levelland is expected to do so at the beginning of 2015.

Dyno Nobel is currently looking at building a new plant on the site of a Cornerstone Chemicals (Waggaman, Louisiana) plant site in Westwego, Louisiana. While this $775 million brownfield plant is still in a very early phase, it is expected to produce 750,000 metric tons per year of liquid anhydrous ammonia when it is completed by the end of 2015.

The remaining fertilizer unit addition and expansion projects already identified by Industrial Info are expected to continue adding capacity to the market over the next four years.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.