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New Iowa Nitrogen Plant Opens

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New Iowa Nitrogen Plant Opens
Friday, April 21, 2017 9:42AM CDT
By Russ Quinn
DTN Staff Reporter

WEVER, Iowa (DTN) -- Amidst fertile Mississippi River Valley farm fields here, the first greenfield nitrogen fertilizer production facility built in the U.S. in more than 25 years officially opened for business Wednesday.

Iowa Fertilizer Company (IFCo) and its Egypt-based parent company, OCI N.V., unveiled their Wever, Iowa, plant, which will produce 1.7 million to 2.2 million tons of nitrogen products annually. The plant will produce ammonia anhydrous, urea and UAN solutions and can alternate between products.

Due to changing economics in producing nitrogen fertilizer with the ready supply of natural gas found in the Bakken region, many companies, and even commodity groups, decided they would build nitrogen-producing facilities over the last decade. The Bakken region encompasses parts of Montana and North Dakota in the U.S. and Saskatchewan and Manitoba in Canada.

However, the reality of raising enough money to cover construction costs, as well as increasing building costs over the years, prevented most groups from ever getting plans off of paper and moving soil. Several existing nitrogen-producing facilities were rebuilt and began to produce increased amounts of nutrients in recent years. But the IFCo plant marks a significant accomplishment in the fertilizer industry.

TRANSFORMATIVE MOMENT

Nassef Sawiris, CEO of OCI N.V., told those attending a ribbon-cutting ceremony Wednesday that the day marked an important change in the nitrogen market in North America.

"The start of production at Iowa Fertilizer Company plant in Wever is a transformative moment for the agricultural industry," Sawiris said. "We couldn't be happier to be part of this community which supported us."

Larry Holley, president of Iowa Fertilizer Company, said that the domestic production of nitrogen is good news for the farmers of Iowa and Illinois as well as those farmers across the Midwest. Locally produced nitrogen will lower costs associated with transporting fertilizer, he said.

"This is the most innovative, safest, environmentally-friendly plant ever built," Holley told those in attendance.

Daily maximum product capacities at the Wever facility call for 4,750 tons of UAN solution, 1,320 tons of granular urea and 2,425 tons of ammonia. In addition, the facility will also produce diesel exhaust fluid (DEF) at a daily maximum capacity of 990 tons.

Yearly production will be at least 850,000 tons of ammonia, 460,000 tons of granular urea and 1.7 million tons of UAN solution.

Sawiris noted the plant, which is located in southeastern Iowa just across the river from Illinois -- the No. 1 and No. 2 corn-growing states -- houses both a world-class production facility as well as a top distribution center. That fact was evidenced by several semitrucks and trailers hauling ammonia that entered and exited the facility during a tour of the grounds.

ECONOMIC LIFT

New nitrogen facilities like the Iowa Fertilizer Company plant don't come cheap. IFCo invested more than $3 billion to build their sprawling new facility near Wever, an unincorporated village of about 700 in northeastern Lee County in extreme southeastern Iowa.

The facility was built in part with funds from the largest tax incentive package in Iowa history, with $1.4 billion coming from the state. Some in the Hawkeye State criticized the amount of the package given to the company.

Despite the high price tag and controversy over public funds, the new plant is poised to be an economic lift for southeastern Iowa, and specifically Lee County.

Iowa Gov. Terry Branstad and Lt. Gov. Kim Reynolds spoke at the ribbon-cutting ceremony, and both pointed to a region needing an economic shot in the arm.

"Six years ago, we started this process and we decided Lee County was the place it was needed as it had the highest unemployment rate in the state at 9.9%," Branstad said.

According to a press release from IFCo and OCI, since the groundbreaking, unemployment in the country dropped from 8% to 5.3%. At the peak of construction, more than 3,500 workers were building the facility.

IFCo will employ a full-time staff of more than 200 workers. Annual payroll is set at $25 million, and $25 million will be spent in maintenance.

Reynolds, who is set to become Iowa's governor once Branstad is confirmed as U.S. ambassador to China, called the plant and region a perfect match.

"Lee County was overlooked in the past as it struggled during the tough economic downturn," Reynolds said. "This will draw dividends for decades."

Russ Quinn can be reached at russ.quinn@dtn.com

Follow him on Twitter @RussQuinnDTN

(AG/BAS)

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