Louisiana Economic Development Wins Deal of the Year: Bronze Award

By the BF Staff
From the January/February 2016 Issue

PROJECT TITLE: FORMOSA PETROCHEMICAL COMPLEX
ENTERED BY: LOUISIANA ECONOMIC DEVELOPMENT

St. James Parish surrounds one of the biggest bends of the Mississippi River, where the waterway turns toward New Orleans halfway downstream from Louisiana’s capital, Baton Rouge. The Parish already was home to a major sugar refinery, a new direct reduced iron manufacturer and a host of agribusiness and chemical manufacturing operations, when it landed what may become the largest chemical complex ever built in the world. In September, Taiwan-based Formosa Petrochemical Corp. (FPCC) announced it will build a $9.4-billion ethylene production complex on a 1,000-acre Greenfield site in St. James. The Bronze Award winner in BF’s 2015 Economic Development Deal of the Year competition will generate an estimated $17.7 billion in economic impact for the region over the next 10 years.

Louisiana Economic Development
Taiwan-based Formosa Petrochemical Corporation will build a $9.4-billion ethylene production facility along the Mississippi River in Southeastern Louisiana. Three Formosa affiliates already operate plastics plants in LA.

“We believe strategic growth in petrochemicals in the future will be in the U.S., especially in Louisiana,” FPPC Chairman Bao-Lang Chen said when the project was announced. “It is the right and perfect location for our company’s next development base.”

Formosa’s project will create 9,200 direct, indirect and induced jobs in the Southeast Louisiana region, generating an annual payroll of more then $120 million.

Logistics and infrastructure played a key role in securing this mega-deal for Louisiana. St. James Parish is located within the largest port district, by tonnage in the Western Hemisphere. Louisiana has the most extensive network of pipelines in the nation, and offers unmatched supply-chain access to domestic markets via railroads and barges.

Chen pledged that Formosa would give “serious consideration” to environmental issues in the development of the new chemical complex. Formosa made good on that pledge by filing administratively complete environmental permits with the state within a month of the project announcement.

PROJECT IMPACT ESTIMATES

  • 1,200 direct new jobs and 4.406 indirect jobs over the next 10 years
  • $626 million in direct new wages over the next 10 years
  • $9.2-billion in capital investment, and $17.7 billion in economic impact for the region

FPPC is one of a family of affiliated Taiwan-based companies that generate an estimated $80 billion annually in sales. Three Formosa Plastics Group affiliates already are operating in Louisiana, manufacturing downstream products, including PVC plastic and fabricated plastic pipe.

The stage for Formosa’s world-scale complex in Louisiana was set in January 2014, during a trade mission to Asia led by then-Gov. Bobby Jindal. Key selling points that sealed the deal included LED FastStart® (BF’s top-ranked workforce training program for the past six years), and C4M (Certification for Manufacturing), a program that supports fast-track preparation in community colleges for high-demand manufacturing jobs. From a statewide inventory of 300 available industrial sites comprising more than 133,000 acres, the state offered Formosa a selection of 10 large tracts on the Mississippi River between Baton Rouge and New Orleans. Louisiana Economic Development created GIS mapping tools that provided detailed data of critical assets at each candidate site.

 

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