Convent, Louisiana — Wanhua appears to have put its investment in a 400 kilotonnes per year MDI plant here on hold, according to a report in the South China Morning Post.
According to the article, William Day, a manager with Wanhua's U.S. operation, said the company "decided to change the scope of the project" citing higher capital costs. He added that the company was still looking for US sites to build the massive plant at a later time.
"Chinese companies have felt a decline in the general U.S.c business, investment and trade environment," said Evan Pan. He is, a research associate with the China General Chamber of Commerce. "Our member companies have been forced to respond to the trade war by either delaying their investments or readjusting their global supply chain networks."
Wanhua declined to provide detailed reasons behind its decision not to build the plant. But local environmental, community groups and business development officials said it may have hinged on several factors.
The chemical company, faced growing criticism and resistance from environmental and community groups in St. James Parish, Louisiana’s term for a county. The parish is 50 per cent African-American and has 32 petrochemical plants — one for every 656 residents. "There are enough already," said Parish Council member Clyde Cooper.
The trade war also appeared to play a part. The company planned to prefabricate parts of the plant in China and assemble them in the US. This was a point of tension with local residents who argued that American construction workers should get the work. They argued this would be fair because Wanhua was attracted to the site by US tax breaks
Additionally, the steel in the prefabricated parts would have attracted large import tariffs.
Local jobs please
"There was a lot of criticism about how they were building everything in their country," said Wilma Subra, head of the environmental consultancy Subra Co. "The jobs were there rather than here."
Don Pierson, secretary of Louisiana economic development, which has worked closely with Wanhua and other companies to spur local investment, said he remained optimistic that the company would locate elsewhere in Louisiana. "The global economy is not as robust as it has been, there are certain tensions between the U.S. and China, there were a fair number of factors," he said.
Pierson said he hoped for a quick resolution of the U.S.-China trade war. "There’s no scientific basis for some of these claims made by a number of these organizations," he said. "Both the U.S. and China remain focused on finding a beneficial solution to benefit both nations."