Construction products company unveils plans for $2b cracker

By Catherine Kavanaugh
Staff Reporter

Published: December 20, 2013 4:15 pm ET
Updated: December 20, 2013 4:19 pm ET

Related to this story

Topics Materials, Construction, Extrusion, Pipe/Profile/Tubing, Materials Suppliers
Companies & Associations Georgia Gulf Corp.

Formed just a year ago by the merger of two well-known, long-time petrochemicals companies, Axiall Corp. is looking in Louisiana for a place to build a $2 billion ethane cracker as well as a partner to go in halves on the project.

Also, if the same partner or a different one is interested in building an ethylene derivatives plant adjacent to the ethane cracker, officials of the Atlanta-based company said the value of the joint-venture investment could go up another $1 billion.

Louisiana Gov. Bobby Jindal welcomed the news Dec. 19 that his state is in line for a $3 billion industrial development that could create 250 new permanent full-time jobs if both facilities are built.

Another 2,000 to 3,000 construction workers also would be employed for 4-5 years and the surrounding area could see 2,200 indirect jobs, according to Louisiana Economic Development (LED).

But where?

“We’re evaluating a lot of sites,” Alan Chapple, Axiall’s corporate communications director, said in a telephone interview. “With all the shale gas that’s in Louisiana, it’s a very attractive state. We’ve got roots here, too, and their workforce understands our industry. There are a lot of ifs, potentials and possibles but the one thing we have determined is if this does go forward and we get approval to do it, it will be in Louisiana.”

Ethane is a natural gas liquid used as a feedstock for many applications. One way to extract it is from shale gas. When ethane is cracked, or broken down into simpler molecules, ethylene and other derivatives are formed. Ethylene is used to produce raw chemicals.

Axiall, which was created by the union of Georgia Gulf Corp. and the chemicals businesses of PPG, needs about 2 billion pounds of ethylene every year for its manufacturing operations, which encompass both chemicals and building products.

Axiall makes vinyl windows, doors, siding and decking that are marketed by Royal Building Products. The company says it is North America’s third-largest siding manufacturer in addition to being the third-largest producer of chloro-alkali and the second-largest producer of vinyl chloride monomer.

Ethylene is used to make vinyl chloride monomer, which then is turned into polyvinyl chloride, which can be turned into any number of vinyl products downstream.

The proposed ethane cracker would allow Axiall to make half of the ethylene it consumes at a lower cost than paying a middleman’s markup.

“We’re not at a point yet where we’re talking about size or capacity of the ethane cracker but it would be considered large by any standard. World-scale is the best way to describe it,” Chapple said.

He described the derivatives plant as an optional facet of the project.

“It could be built as an adjacent manufacturing facility. We would not own or operate it. The plant would just be co-located to take advantage of our ethylene. As far as the derivatives, there are a number that can be produced from ethylene and it would be dependent on what the partner wants.”

Axiall has a number of potential partners in mind for both the ethane cracker and derivatives plant, CEO Paul Carrico said in a statement. He also said he plans to announce one partner in the near future.

If only the ethane cracker is built, 150-175 full-time, permanent jobs would be created. If a partner builds the derivatives plant, the jobs number goes up to 225-250.

The state of Louisiana has offered Axiall a performance-based incentive package to build there but Chapple said he isn’t in a position to disclose the terms. A phone call to the LED wasn’t immediately returned.

In Louisiana, Axiall has two manufacturing complexes in Lake Charles and one in Plaquemine. The company expects to award an engineering and design contract for the ethane cracker in early 2014 if Axiall’s board of directors gives its approval. The facility could be in operation by 2018.

The low cost of shale gas has been a game changer for the chemicals industry during the last five years. Businesses can get it for $3-$4 per thousand cubic feet compared to $10-$12 per thousand cubic feet for natural gas. The so-called “shale gale” has made the United States one of the cheapest places to make plastic.

“Because of the high cost of natural gas, a lot of U.S. companies were going offshore to compete,” Chapple said. “Now with shale gas we actually have a competitive advantage over a lot of foreign producers.”


Comments

Construction products company unveils plans for $2b cracker

By Catherine Kavanaugh
Staff Reporter

Published: December 20, 2013 4:15 pm ET
Updated: December 20, 2013 4:19 pm ET

Post Your Comments


Back to story


More stories

Image

Sabic: Rapid demand growth led to Ultem shortage

December 18, 2014 12:06 pm ET

Sabic Innovative Plastics has been increasing production capacity for its Ultem polyetherimide but it still got caught short by increasing demand for ...    More

Image

Soy-based foam improves window performance, sustainability

December 18, 2014 12:51 pm ET

Launched in April 2013, Madison, Wis.-based WFI Global LLC is making a name in the fenestration market with what it says is a distinct product...    More

McCann expanding in Ohio

December 17, 2014 11:59 am ET

Compounding firm McCann Plastics will spend $1.2 million on an expansion project that will create 15 new jobs at its plant in Green, Ohio.    More

French firm acquires Zimmer-brand polymer technology

December 15, 2014 4:18 pm ET

The deal includes technologies for the processing of polyesters and nylons, and approximately 40 researchers and engineers.    More

Image

Bioplastics global production capacity

December 15, 2014 10:14 am ET

   More

Market Reports

Flexible Packaging Trends in North America

Our latest RESEARCH report examines trends in FLEXIBLE PACKAGING impacting the North American market including a review of economic conditions, key drivers of growth, materials pricing, M&A activity, sustainability challenges and the outlook for 2015.

Learn more

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Plastics in Mexico - State of the Industry Report

This report analyzes the $20 billion plastics industry in Mexico including sales of machinery & equipment, resins and finished products.

Our analysts provide insight on business trends, foreign investment, top end markets and plastics processing activity. The report also provides important data on exports, production, employment and value of plastics products manufactured.

Learn more

Upcoming Plastics News Events

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

October 27, 2015 - October 29, 2015Plastics Financial Summit - New York - 2015

More Events