Spending Expected to Peak in 2Q08 in North American Chemical Processing Industry

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Researched by Industrial Info Resources (Sugar Land, Texas)--The North American Chemical Processing Industry (CPI) has continued to successfully buck the effects of a slowing economy, and spending for the industry is expected to peak this quarter. Of the more than $9 billion in CPI spending currently being tracked for kick off in 2008 as part of Industrial Info's North American Project Database, an estimated $3.7 billion of that spending is planned or scheduled to begin some phase of construction during the second quarter of 2008. The third quarter is the next-closest follower with an estimated $2 billion in planned construction starts.

At least eight major projects, each valued at $100 million or more, are planned to begin construction during the second quarter. The largest among them are plans by ADA-ES Incorporated (NASDAQ:ADES) (Littleton, Colorado) to begin civil construction for the site of a planned grassroot activated carbon plant in Coushatta, Louisiana. This $400 million plant will process lignite coal from a neighboring coal mine to produce activated carbon for use in mercury reduction projects in the power generation industry. This new project is just one of three such plants planned by ADA-ES across the United States over the next couple of years. PCS Phosphate Company Incorporated (Northbrook, Illinois) has hired engineering and construction resources to begin construction of a No. 7 sulfuric acid unit addition at its Aurora, North Carolina, plant tentatively next month. This nearly $100 million project combined with several other projects planned at the Aurora site equal total investments of more than $206 million in future spending at the site.

Maintenance spending represents approximately $375 million of the spending planned to kick off during the second quarter across 139 individual units or plants equaling a $3 million average project total investment value (TIV). Most of the reported capital projects identified for kickoff in the quarter have been approved or funded. Less than $500 million is still in the planning phase or pending approval in the next few weeks.

Looking ahead to the third quarter of this year total CPI project activity already identified exceeds $2 billion. This puts the quarter only slightly behind the forecasted performance of the same quarter last year of $2.4 billion. Additional projects are certain to be identified and some delayed although there appears to be enough momentum in the industry to keep investment spending on track for the short-term.

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