The North American CPI Maintains Spending Strength with $5.3 Billion in Major Capital Projects Valued Over $50 Million Per Project

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Researched by Industrial Info Resources (Sugar Land, Texas). The Chemical Processing Industry (CPI) has maintained a significant level of spending and appeared to be at the top of a spending cycle for the past three years. Industry observers have pondered ‘how long can this spending cycle continue’ for the past several years and the end of what has been a very positive investment period seems to continue moving further out. Industrial Info is currently tracking over 50 major capital projects planned to begin construction from January of this year through April of 2008, each valued at more than $50 million.

Projects of this size generally drive spending for other downstream plants and products representing major new capacity through unit additions and plant expansions. Projects considered to be major unit additions account for the greatest number of projects in this analysis with 21 currently identified equaling the second largest combined total investment value (TIV) of $1.6 billion. Projects defined as expansions represent the largest combined spending at $1.79 billion, although this is only made up of seven projects. Grassroot plant projects will also contribute largely with eleven projects totaling nearly $1.3 billion.

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Formosa Plastics Corporation USA (Livingston, New Jersey) is planning the largest plant expansion project, as well as the largest grassroot plant project, currently planned for the United States in the near future. An expansion of its Point Comfort, Texas polyvinyl chloride (PVC) resins unit, estimated at $240 million, is expected to add nearly 375 million pounds per year of new PVC capacity when complete in late 2007. Formosa is also moving quickly to obtain the permits necessary to construct a grassroot 300-megawatt (MW) petroleum coke-fired power plant in Point Comfort to be located nearly three miles from its existing operations. This estimated $300 million plant will provide electricity and steam to the local merchant market while also serving Formosa’s future power demands.

Lead by Formosa’s investments, the United States will be home to an overwhelming majority of the major capital projects with nearly $4.6 billion of capital projects valued at over $50 million each. Texas, the home to North America’s largest petrochemical complexes, will be the obvious center of focus for this spending at $1.5 billion followed by its neighbor, Louisiana, at $895 million.

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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.