February 28, 2012
A proposed $1.3 billion nitrogen fertilizer manufacturing plant received a green light last week from Iowa economic development officials. The Iowa Economic Development Authority, a state agency, voted to give the company that wants to build the project—a business called Iowa Fertilizer Company--nearly $37 million in state financial incentives.
Most of the incentive package from the state is in the form of tax credits, an estimated $31.5 million, based on the company's capital investment. The proposed capital investment to build this plant and get it up and running would be the state's largest ever, say Iowa economic development officials. The $1.3 billion investment that the fertilizer company would make would beat the $800 million facility Google, the internet company, built in Council Bluffs in 2008.
"It's a significant amount of incentives, the nearly $37 million from the state of Iowa that we have decided to provide to Iowa Fertilizer Company. But considering that this is a $1.3 billion project, a really large project, I think the amount of state financial incentive we are providing is certainly reasonable," says Debi Durham, the state's economic development director. "This is a great opportunity for Iowa."
Plant would produce nitrogen fertilizer to replace foreign imports of N
Iowa Fertilizer Company is a subsidiary of Orascom Construction Industries. A global construction services company, Orascom is headquartered in Cairo, Egypt. An Iowa Fertilizer Company spokesman says the project would create 165 jobs in the construction of the plant. The plant is proposed to be built on 300 acres near the town of Wever, which is along the Mississippi River between Burlington and Fort Madison.
The Iowa Fertilizer Company spokesman says the new plant would make nitrogen to replace imported nitrogen fertilizer that is now being shipped into the Midwest market, which includes Iowa, Illinois and Wisconsin.
Durham points out that by locating the plant in Lee County, the state of Iowa would give Orascom a key location to access the U.S. Corn Belt nitrogen fertilizer market. If the plant is built according to the schedule that has been proposed by the company, it would start producing fertilizer in 2014.
Building this plant would be a huge project, providing a number of construction jobs. It is seen as an economic boon for Lee County, which has a high rate of unemployment, notes Durham. Lee County, which is in Iowa's southeast corner, had an average annual unemployment rate of 9.4% in 2011. According to Iowa economic development officials, Orascom would invest nearly $101 million in the project, and tap $1.2 billion in low-cost financing through a Midwest disaster bond program.
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