Grassroot Chemical Plant Startups Forecast to Increase by 34% in 2007

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Researched by Industrial Info Resources (Sugar Land, Texas). New chemical plant startups in the United States and Canada have consistently increased over the past several years after falling off its average peak of 60 or more new plants per year in the late 1990s. Based on plants and projects currently being tracked by Industrial Info as part of the Chemical Processing Industry (CPI) database, over 47 grassroot plants in the Chemical Processing Industry (CPI) are scheduled to begin commercial operations in 2007. If each of these new plants were to stay on schedule, which is overly optimistic, this would equal an increase in activity over 2006 new plant startups of 34%. The expectations for 2007 are set high, partly based on a very low percentage of delays and cancellations in planned startups during 2006 of less than 6%.

Click on the image at right to view a chart showing the breakdown of new plants in 2006 compared to those forecast for 2007.

The big change for next year will be where these new plants are proposed to be located. Traditionally, the Southwest market region has comfortably led with the largest number of new CPI plant startups each year due to its strategic proximity to major industry and energy feedstock. In the upcoming year, the Great Lakes region will move to the front and be home to the largest number of grassroot CPI plants with fourteen currently identified, more than doubling the 2006 activity of five new plants. The total investment value (TIV) for these new plants is expected to exceed $350 million, a major increase over the estimated $36 million spent on grassroot construction in the region during 2006. The products produced in these new plants will cover a wide spectrum ranging from industrial gases to elastomer compounding to adhesives production.

Another significant change in the demographics of planned activity next year is an increase in grassroot construction plans in the Southeast market region. Ten new plants are currently planned for the region, an increase from seven new plants completed in 2006. This activity couldn’t have come at a better time for a region with several states still recovering from the severe impacts of a devastating hurricane season in 2005, which idled hundreds of plants and took some offline permanently. Total grassroot plant project activity is expected to equal an investment totaling more than $520 million in the region with almost half of the project activity represented by the industrial gases sector of the CPI.

With new plants, you generally get new jobs in most cases and the trend of more new plants will potentially lead to more than twice the number of new jobs next year. The new plants planned for startup in 2007 will employ an estimated 2,900 people upon completion, up from just a 1,000 in 2006.

Industrial Info Resources (IIR) is a Marketing Information Service company that has been doing business for over 23 years. IIR is respected as the leader in providing comprehensive market intelligence pertaining to the industrial processing, heavy manufacturing, and energy-related industries throughout the world.