Spending for Ontario Chemical Producers Points to Increased Investments in 2011

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Researched by Industrial Info Resources (Sugar Land, Texas)--Ontario is home to 151 operational chemical plants, representing more than half of Canada's Chemical Processing Industry (CPI). Total capital and maintenance CPI spending in the province decreased in 2010 by an estimated 11% over the previous year. This decrease in spending came at a time that many of its southern neighbors in the United States were beginning to experience an uptick in overall spending, as the recession loosened its grip on the economy and consumers. The increase in spending, prompted by improving economics, is expected to be much more noticeable in 2011 based on project activity currently being tracked as part of Industrial Info's North American Project Database.

In 2011, CPI spending in Ontario is forecast to reach $182 million from just 30 individual projects, up considerably from project spending of $124 million in 2010. Two of the largest projects are grassroot plants planned by Greenfield Ethanol Incorporated (Greenfield, Ontario) and Ellsin Environmental Limited (Toronto, Ontario). Greenfield Ethanol is evaluating sites and technology for the construction of a bio-based succinic acid plant to produce environmentally friendly bio-renewable de-icing solutions. Ellsin Environmental is seeking a suitable site to construct a waste tire recycling plant that will employ a reverse polymerization process on the tires, producing merchant commodities such as oils, carbon black and other materials.

Almost $25 million of the total spending planned to begin construction this year in the province will focus on planned maintenance turnaround activity. Some of the larger maintenance turnarounds scheduled for this year will be completed by Cytec Canada Incorporated (Niagra Falls, Ontario), INVISTA (Canada) Company (Mississauga, Ontario), and NOVA Chemicals Corporation (Calgary, Alberta). Although maintenance turnaround spending in Ontario will be down almost 50% this year compared to 2010, the increase in overall spending with a focus on capital projects is encouraging and suggests that growth might once again be under way.

The performance of this province is often overshadowed by the spending of its neighbors located in the Western Canada market region, consisting of British Columbia, Alberta, Saskatchewan, Manitoba and the Northwest Territories. With fewer than 100 operational CPI plants, the region historically outspends other Canadian provinces each year due to its high concentration of petrochemical complexes. In 2011, Ontario CPI producers' total spending will rival those located in Western Canada, where forecasts suggest a total of $201 million this year.

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