Sometimes Brownfield is Best: Industrial Info Tracks Wealth of U.S. Projects on Formerly Used Sites

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Researched by Industrial Info Resources (Sugar Land, Texas)--A brownfield investment is when a company or government entity purchases or leases existing production facilities to launch a new production activity, according to Investopedia.

"At times, this approach may be preferable, as the structure already stands. Not only can it result in cost savings for the investing business, it can also avoid certain steps that are required in order to build new facilities on empty lots, such as building permits and connecting utilities," according to Investopedia.

On the other hand, brownfield "refers to the fact that the land itself may be contaminated by the prior activities that have taken place on the site, a side effect of which may be the lack of vegetation on the property," Investopedia continues, adding: "While additional equipment may be required, or existing equipment may need to be modified, this can often be more cost effective than building a new facility from the ground up."

In any case, Industrial Info is tracking more than $2.3 billion in U.S. brownfield-related project activity that could start construction or be completed in the upcoming 2018 third quarter. This includes nearly $1.5 billion in potential kickoffs and nearly $880 million in completions for the period of July through September. For a number of reasons, not all of the projects will adhere to their planned timelines. Industrial Info assesses the likelihood of each project moving forward as planned.

Click on image at right for a graph showing third quarter brownfield project kickoffs by industry.

With just one project, Electric Power takes the lead in the overall value of potential brownfield-related construction kickoffs for the upcoming quarter. Now in the engineering stage, construction of the $500 million Hannibal Port Power Station in Ohio is planned on the site of the former Ormet Aluminum Smelter, which was closed in 2013 in Hannibal.

Under development by Fortress Transportation and Infrastructure Investors Ltd (NYSE: FTAI) (New York City, New York), which is managed by Fortress Investment Group (NYSE: FIG) (New York), the 485-megawatt (MW) combined-cycle power plant would make use of low cost natural gas from the Marcellus/Utica region. Niagara Worldwide LLC (Niagara, Wisconsin) and Kiewit Power Constructors, part of Kiewit Corporation (Omaha, Nebraska), are involved with the project, which would see completion in late 2020. For more information, see Industrial Info's project report.

The 1,600-acre Hannibal site was purchased by Fortress Transportation last year for $30 million. The company said at the time that the site, located on the Ohio River, offered a number of development options including logistics to natural gas liquids storage, distribution and processing.

Brownfield Completions

The Industrial Manufacturing Industry leads in potential brownfield project completions in the upcoming quarter, with $755 million in activity.

Click on the image at right for a graph showing third-quarter brownfield project completions by industry.

FedEx Corporation (NYSE:FDX) (Memphis, Tennessee) plans to complete construction this summer of a $220 million brownfield regional distribution center in Middletown, Connecticut. Located on a 239-acre site that was formerly home to an Aetna Incorporated (NYSE:AET) (Hartford, Connecticut) office complex, construction of the 500,000-square-foot distribution center began in late 2016. According to The Middletown Press, the community vied against Massachusetts and Rhode Island for the distribution center. For more information, see Industrial Info's project report.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, 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. Follow IIR on: Facebook - Twitter - LinkedIn. For more information on our coverage, send inquiries to info@industrialinfo.com or visit us online at http://www.industrialinfo.com.