The Chemical Industry Maintains Its Momentum for Spending in the United States’ Southwest Market Region

---

Researched by Industrial Info Resources (Sugar Land, Texas). Capital and maintenance project spending during the second quarter of 2007 is set to meet or exceed spending levels of a year ago at roughly $650 million for the chemical processing industry (CPI) in the southwestern United States. The CPI has continued to show its strength and grow despite the price of oil, fluctuating costs for feedstock and shortages in construction labor. The second quarter is historically the period in which a large percentage of the projects planned for the year begin construction as engineering has been completed and procurement well underway for projects previously approved as part of the 2007 budget year.

Louisiana led CPI spending in the region during the second quarter of last year and is expected to maintain its leading role again this year with over $400 million in construction spending. Several major projects, including those planned by Pioneer Americas LLC (Houston, Texas), Occidental Chemical Corporation (Dallas, Texas), and Meadwestvaco Corporation, (Glen Allen, Virginia) have helped the state of Louisiana top Texas as the lead spender during the quarter. Pioneer Americas began the initial construction phases of its major $146 million chlor-alkali expansion in Saint Gabriel, Louisiana and Occidental Chemical began construction for its $65 million project in Hahnville, Louisiana to convert its sodium hydroxide production at the site to potassium hydroxide (KOH) production.

Project activity in Texas will be substantial although it is expected to total only half that of its eastern neighbor during the second quarter. Projects in Texas during this quarter are expected to reach nearly $200 million with an average total investment value (TIV) of $6.5 million compared to an average TIV for the Louisiana projects at an estimated $16 million. The largest project activity starting during the quarter in Texas will likely be a nearly $30 million expansion of a halobutyl rubber expansion by ExxonMobil Chemical Company (Irving, Texas) at its Baytown, Texas plant.

Even as the second quarter looks to provide the CPI with another strong performance, the best appears to still be on the horizon. Based on projects being tracked by Industrial Info as part of the North American Project Database, the third quarter of this year has an estimated $1 billion in CPI capital and maintenance planned to begin construction. Texas will take the lead in total spending this quarter with a majority of the total at an estimated $700 million. This level of spending and confidence isn’t limited to the Southwest; the CPI is performing strongly in most regions and the level of project cancellations and delays remains low across the United States and Canada. See related June 15, 2007 news article – “The North American Chemical Processing Industry Continues to Show Strength.”

View Plant Profile - 1005036 1005328 1004906 1072206 1000546
View Project Report - 02006140 02005922 02005771 02005685 01011214

Industrial Info Resources (IIR) provides marketing communication services ranging from industrial database solutions to market forecasting, custom analytics, and specialty promotions that support high-level image campaigns.