Iowa Fertilizer Company held a groundbreaking ceremony November 19 to mark the start of construction work on its new greenfield nitrogen fertilizer production plant in Wever, Iowa. This new plant will be the first world scale natural gas-based fertilizer plant built in the United States in nearly 25 years and will help reduce U.S. dependency on imported fertilizer. The company is a wholly-owned subsidiary of Orascom Construction Industries, based in Cairo, Egypt.
Featured speakers at the event included Iowa Gov. Terry Branstad, director of the Iowa Economic Development Authority Debi Durham, Lee County supervisor Larry Kruse, and chairman and CEO of Orascom Construction Industries, Nassef Sawiris.
"The Iowa Fertilizer Company plant is one of the largest investments ever in the state of Iowa," said Branstad. "I am pleased to be breaking ground today and moving forward with our efforts to bring thousands of jobs to this area and to provide our farmers access to affordable fertilizer. This project will help rejuvenate Lee County and all of Iowa at a time when it is needed most."
All of Iowa will see a positive economic benefit from this project
"All of Iowa will see and feel the positive economic impact of this project," added Iowa Lieutenant Gov. Kim Reynolds. "Iowa Fertilizer Company is bringing hundreds of millions of dollars into the state that will directly benefit local outlets such as public schools. This groundbreaking marks a step in the right direction for economic growth and a successful future for the state of Iowa."~~~PAGE_BREAK_HERE~~~
"In November 2011, Iowa Fertilizer Company was just an idea. Today, after much hard work by local and state officials, we celebrate the start of construction work on our new $1.4 billion fertilizer plant which represents the largest investment project ever undertaken in the state," said Nassef Sawiris, CEO of Orascom Construction Industries, the company that will build and own the facility. "We would also like to thank the community in Lee County for its support of our project and reaffirm our commitment to utilize local suppliers, contractors and workers whenever possible and involve ourselves in this community."
New plant is the largest investment project ever undertaken in the state of Iowa
During the event, the company signed an agreement with the ANR Pipeline Company, a subsidiary of TransCanada Corporation, covering terms for the long-term transportation of natural gas to the plant, an agreement with Citigroup to serve as the lead underwriter of its bond financing issuance, and an agreement with Iowa-based McAninch Corporation to undertake the initial earthmoving and grading work on the site.
The Iowa Finance Authority's Board of Directors unanimously approved the issuance of up to $1.2 billion in Midwest Disaster Area bonds by Iowa Fertilizer Company on November 16. As the borrower, the company will be solely responsible for the repaying the debt and the rates and terms of the bonds will be based on its creditworthiness. The Iowa Department of Natural Resources approved the issuance of air permits for the new plant on October 26. Branstad said the new plant will use the best available emissions control technologies and comply with all state and federal emissions requirements.
Iowa is the top producer of corn in the U.S. and is also the top consumer of nitrogen fertilizer in America. Iowa has over 30 million acres cultivated annually and a huge demand for the plant's product.
Egypt's wealthiest businessman joined Iowa officials to break ground for the plant
Speaking at the groundbreaking event in the middle of a field in Lee County, Iowa, Nassef Sawiris, Egypt's wealthiest businessman, told the crowd of 200 people that the prime location in the heart of the Corn Belt was just "one of many" reasons that he and his company decided to build the plant in southeast Iowa.
Sawiris praised "Iowa's great work ethic and values" and gestured to Iowa Gov. Branstad -- "I just mentioned to the governor that Iowa means 'yes' in Egypt.~~~PAGE_BREAK_HERE~~~
The Orascom project, under the name of Iowa Fertilizer Company, was announced a couple months ago and at the time was Iowa's largest-ever capital investment. However, in early November CF Industries, a major U.S. fertilizer manufacturer and marketer, headquartered in Illinois, announced its plans for a $1.7 million expansion of its complex near Sioux City in northwest Iowa.
To build the plant in southeast Iowa, Orascom is purchasing the 157-year-old Weitz Construction Company in Des Moines. The new plant will require about 2,500 construction workers and then employ a permanent staff of 165 people. Orascom employs over 90,000 worldwide.
The Orascom plant has faced debate in Iowa over the more than $200 million in state and local incentives offered, as the $1.2 billion in disaster bonds were approved last week by the Iowa Financial Authority. Some people also question the potential environmental impact of the plant. Speaking at the groundbreaking, Sawiris insisted that his company is building "a plant that does not exist today in America" and that it will be possibly the "safest and cleanest plant in the world." As much as 2 million metric tons is expected to be produced annually by the new plant.
About Orascom Construction Industries: OCI is one of Egypt's largest corporations employing more than 90,000 people in 35 countries around the globe. The OCI Fertilizer Group owns and operates plants in Egypt, the Netherlands, the United States, and Algeria and has an international distribution platform spanning from the Americas to Asia. The group ranks among the world's top fertilizer producers with a production capacity which will exceed 7.0 million metric tons in 2012. The OCI Construction Group provides international engineering and construction services primarily on infrastructure, industrial and high-end commercial projects in Europe, the Middle East and North Africa for public and private clients. The OCI Construction Group ranks among the world's top global contractors.
For additional information, contact OCI here.