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CF Industries to invest record $1.7B expansion in NW Iowa
 
By DOUG SCHMITZ
Iowa Correspondent

SIOUX CITY, Iowa — A landmark $1.7 billion expansion of the existing Port Neal fertilizer facility in Woodbury County is the largest capital investment in Iowa’s history, according to state officials.
“The expansion that will take place right here in Sioux City will be extremely beneficial to the heart of the Heartland,” said U.S. Rep. Steve King (R-Iowa), who represents the district. “I am delighted that CF Industries is making this investment in our community.”
The Iowa Economic Development Authority (IEDA) Board awarded direct financial assistance and tax credits totaling $23.5 million to Deerfield, Ill.-based CF Industries Holdings, Inc., a global leader in fertilizer manufacturing and distribution.

Steve Wilson, company chair and CEO, said he saw how the worst of the 2011 flooding in northwest Iowa was handled, and how “it gave him confidence that they could build here,” adding “it is an example of how agriculture can drive industrial development.
“I have always known that all new wealth comes from the land – and from the field to the farm and from the farm to the cities,” he said. “This is an example of what I’ve been describing for years, and it’s the best example in the history of Iowa.”

The Port Neal project will add new state-of-the-art ammonia and granular urea production units to meet customer demand, as well as to supplement existing production of ammonia and urea ammonia nitrate (UAN). 

The record project will bring 100 high-paying permanent jobs and 1,500-2,000 construction jobs to the area, with a qualifying hourly wage of $20.12. The expansion will also create about 700 indirect jobs.

“This is another great announcement for Iowa, and we are proud that CF Industries has chosen us for its $1.7 billion expansion,” said Iowa Gov. Terry Branstad. “Our state is clearly well-positioned to take advantage of the growing domestic fertilizer industry. Not only does that mean significant investment that will continue to grow our economy, but also the creation of high-paying jobs for Iowans.”

The IEDA stated the $1.5 million is in direct assistance and tax credits; the tax credit award is made up of $13 million in sales tax refunds paid during construction and $9 million in investment tax credits (ITC). The board will also consider future amendments to allocate an additional $12 million in ITC in each of the next four fiscal years (2013-16) for a potential total ITC award of $57 million.
Iowa Lt. Gov. Kim Reynolds said it is rewarding to watch existing companies continue to make investments in Iowa.

“With today’s announcement that a company with current operations in Iowa will make a capital investment of nearly $2 billion,” she said, “it is obvious that we are on the right track to reaching our goals of creating jobs and increasing wealth for Iowans. Just since January 2011, the IEDA has projects under contract that will result in $5.23 billion of capital investment in our state.”

CF Industries also owns and operates world-scale nitrogen and phosphate plants, and serves agricultural and industrial customers through its best-in-class distribution system. In 2010, it acquired Terra Industries, Inc., positioning the company as the premier nitrogen and phosphate fertilizer manufacturer in North America.
Construction on the expansion is slated to begin soon and is expected to be operational in the fourth quarter of 2016. “CF Industries is proud of its long history of serving Iowa farmers and we are pleased to increase our manufacturing presence in Iowa in a major way,” Wilson said.

In addition, the company operates terminals in Spencer and Garner, Iowa, and in Aurora, Blair and Fremont, Neb.
On Sept. 5, the IEDA Board announced the Iowa Fertilizer Co. would be its final selection of a Lee County site for a $1.4 billion project that will create 165 permanent jobs and more than 2,000 construction-related jobs. A subsidiary of Orascom Construction Industries, Iowa Fertilizer is one of the world’s largest fertilizer producers. The new plant will supply needed ammonia and other nitrogen fertilizers to farmers in Iowa and the Midwest.

In February 2012, the board awarded Iowa Fertilizer incentives to locate in Lee County. Because of some unforeseen challenges with the original site, the company resumed its search for a suitable location and was pursued by other states to locate outside of Iowa.
As a result, the board met to amend its original award to ensure the state would win the project, which was passed and included an increase to the investment tax credit portion of the High Quality Jobs award, increasing the total tax credits to $57.5 million.
The IEDA board will also be asked to consider future amendments in FY 2014 and 2015 to increase the ITC portion of the award by $25 million in each of those years. If the board passes those amendments, the final award to Iowa Fertilizer would amount to $100 million of tax credits.
11/15/2012