The Urethane Blog

Wanhua To Build in Louisiana

China’s Wanhua Chemical to build $1.12 billion plant in Louisiana

Petrochemical Plant Illuminated at Dusk

  By Richard Rainey, | The Times-Picayune
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on April 10, 2017 at 9:39 AM, updated April 10, 2017 at 9:56 AM

A Chinese chemical company has agreed to build a $1.12 billion chemical manufacturing plant in Louisiana after the state’s economic development arm promised it a $4.3 million infrastructure grant.

The agreement between Wanhua Chemical Group and Gov. John Bel Edwards’ administration caps more than three years of negotiations and marks the second-largest Chinese investment in Louisiana’s chemical manufacturing industry. Yuhuang Chemical is developing a $1.85 billion methanol complex in St. James Parish.

The project — the first major foreign direct investment by a Chinese company in Louisiana — is expected to create 400 jobs over the next six years.

Louisiana Economic Development, or LED, estimates the Wanhua project will create 170 direct jobs and 945 indirect ones.

Talks to bring Wanhua to Louisiana began in December 2013. A group led by LED Director Don Pierson put the final pieces in place in March during a trip to Wanhua’s global headquarters in Yantai.

The company is still mulling where to build. Once operational, its complex will manufacture methylene biphenyl diisocyanate, or MDI, a major chemical in most insulation foam for refrigerators and freezers. It’s also used for rollers, packing materials, furniture, footwear and synthetic leather.

As part of the deal, Wanhua will tap state tax exemption programs. The Industry Tax Exemption Program exempts a company from property taxes on its new complex for 10 years. The Quality Jobs Rebate program grants a 6 percent rebate for 10 years for up to 80 percent of a company’s payroll for new direct jobs. In July 2018, the company’s Louisiana payroll will be eligible, according to the LED.

Wanhua is expected to use the $4.3 million state grant to offset some of its infrastructure costs. Wanhua itself will pump $954 million into building the complex. Project partners plan to deliver the remaining $166 million in construction costs, according to the project’s announcement.