Egyptian based Orascom Construction Industries (OCI) has announced it will build a new state-of-the-art fertilizer production facility in Lee County, Iowa near the southeastern town of Wever. OCI's Iowa Fertilizer Company (IFCo) is expected to produce 1.5-2 million metric tons of urea, ammonia, UAN and diesel exhaust fluid annually. Currently, the U.S. imports more than 15 million metric tons of ammonia, urea and UAN each year.
Iowa Governor Terry Branstad remarked, "I am pleased to welcome OCI to Iowa. Their project is the largest investment ever made in our state."
So far, the State of Iowa has offered up $31.5 million in tax credits and refunds and a $1.6 million forgivable loan to OCI to help cover construction expenses. The total investment cost is estimated to be $1.4 billion and will be funded with a combination of equity and tax-exempt bond issuance.
OCI reports that today the Iowa Finance Authority authorized Iowa Fertilizer Co. to access bonding capacity under its private activity tax-exempt Midwestern Disaster Area bond program. In addition, the Iowa Economic Development Authority Board unanimously approved a comprehensive state financial incentive package expected to provide state tax relief in the order of $100 million. The Iowa Department of Transportation Board will also consider financial assistance for project-related public infrastructure improvements.
Inputs Monitor reported last month that OCI had designs on rezoning a 318 acre swath of Scott County land, but was turned away by the Scott County Planning and Zoning Commission. The rezoning request then went before the Scott County Board of Supervisors who included the item in their agenda for an August 28, 2012 meeting. Prior to that meeting, OCI removed the item from the agenda, delaying the discussion, but left the rezoning application on file with Scott County. OCI has since been in touch with Scott County officials, and these officials fully expect the original rezoning request to be withdrawn.
Scott County Board of Supervisors Chair Tom Sunderbruch lamented in a wcfcourier article, "I see it as a tremendous opportunity missed. It could have meant so much to our area in jobs and revenue."
OCI has also recently acquired The Weitz Company, a Des Moines based general contractor with three core business lines including commercial, federal and industrial construction. OCI Construction Group COO Osama Bishai said, "The OCI Construction Group will draw upon its experience and expertise in building similar facilities and will also leverage its US construction platform which now includes the Weitz Company to fast-track the construction of this project." OCI intends to keep Weitz's current management and staff onboard.
Construction on the Lee County 'Iowa Fertilizer Company' plant will begin later this year and will take an estimated 35 months to complete. The construction project alone is expected to create around 2,500 jobs over the next three years. When completed, IFCo will be the first natural gas-based fertilizer plant built in the United States in nearly 25 years and will help bolster domestic fertilizer supplies.