Skip to main content
You have permission to edit this article.
Mega project: $1.7 billion expansion planned in Port Neal

Mega project: $1.7 billion expansion planned in Port Neal

  • Updated
  • 0

SIOUX CITY | Woodbury County reeled in the single largest capital investment in Iowa history Thursday when CF Industries announced a $1.7 billion expansion of its Port Neal fertilizer complex.

The mega project will create 100 new jobs at a starting average salary of $55,000, doubling the employment there. Hiring is expected to begin early next year, allowing the new workers to complete their training before the new facility comes on line in 2016, company officials said.

The added activity at the complex is projected to create about 700 indirect jobs, according to company officials. Between 1,500 and 2,000 construction workers also will be needed during the two years it will take to build the plant.

"This kind of investment will have a major economic impact that will be felt all over our state, especially up here in Northwest Iowa and also benefit neighboring states as well," Gov. Terry Branstad told a standing-room only crowd in Sioux City, where he joined CF CEO Steve Wilson to formally announce the expansion.

State and local leaders, who kept what they dubbed Project X a secret for weeks while negotiating with publicly-traded CF, gave the development the green light Thursday afternoon.

The Iowa Economic Development Authority Board approved a $1.5 million forgivable loan, $57 million in tax credits and $13 million in sales and use tax rebates over a four-year period.

In a separate vote, which also began minutes after the financial markets closed for the day, the Woodbury County Board of Supervisors approved a development agreement that waives $161 million in property taxes over 20 years.

Even with the abatement, local officials said the county, Sergeant Bluff-Luton School District and some smaller taxing bodies will collect $127 million from the new construction over the 20 years. The county alone will share in an extra $49 million, board chair Jackie Smith said.

"The benefits to the county are enormous," Smith said.

"The size of this project is just unbelievable," county supervisor Larry Clausen added. "There's so many zeros in this, it's hard to fathom."


Near-record corn prices have driven up demand for nitrogen fertilizer, which must be applied to corn and certain other crops to add nutrients in the soil, giving CF and other manufacturers an incentive to add production capacity. At the same time, low prices for natural gas, which accounts for about 70 percent of the nitrogen production costs, has helped CF post robust earnings.

"We have a business that is doing well," Wilson said at the news conference.

Deerfield, Ill.-based CF, the world's second-largest producer of nitrogen, also announced a $2.1 billion expansion of its Donaldsonville, La., facility Thursday.

Wilson said the past performance of the more than 100 employees at the Port Neal plant contributed to the company's decision to expand there. The existing infrastructure, access to natural gas and multiple modes of transportation also were factors, he said.

In addition, the rural Woodbury County site is in the "heart of the best fertilizer market in the world," the CEO said.

The added Port Neal production will replace higher-priced fertilizer imported from other countries, helping farmers in Iowa and other Midwest states to save millions of dollars annually, Branstad said.

"It's going to improve our profitability for agriculture," the governor said at the news conference.

CF, headquartered in Deerfield, Ill., acquired the Port Neal complex as part of its $4.7 billion takeover of Sioux City-based Terra Industries in 2010. 

The Port Neal plant, which opened in 1960, was largely rebuilt in 1995 following an explosion that killed four people and injured 18 others.

Today, CF's Port Neal plant employs around 100 people, and has the daily capacity to produce up to 1,100 tons of ammonia, the basic building block in various nitrogen products. Most of that production is upgraded into urea ammonium nitrate solutions, or UAN, a liquid fertilizer.

The expansion announced Thursday calls for construction of a second ammonia plant, which will triple the overall capacity, local plant manager Nick DeRoos said. Ammonia from the second plant will be converted to granular urea, a solid nitrogen fertilizer that can be applied separately or mixed with phosphate or potash fertilizers.

CF officials said they have already signed an engineering and procurement services contract for the new plant, which will be built just north of the existing one on land the company already owns. Construction activity is expected to begin next year, DeRoos said.

Wilson offered assurances the mega project would proceed on schedule.

"It's easier to announce projects than do projects," he said. "CF has the money to make this project happen."

The company plans to submit a construction plan to the Iowa Department of Natural Resources as soon as possible, according to company officials.

Branstad credited state Economic Development Authority Board Director Debi Durham and chairman Dave Bernstein with helping on the project. Bernstein, a Sioux City businessman, abstained from voting on the package of incentives Wednesday.

Durham, a former president of the Siouxland Initiative, said the deal came together quickly after CF resolved an issue with the natural gas pipeline that serves the Port Neal plant.


The CF deal comes just after another record-setting incentive package the state put up to attract a fertilizer plant near Fort Madison. That $1.4 billion project had been the state's single-largest capital investment prior to CF's announcement.

In the Fort Madison deal, Egypt-based Orascom Construction signed a contract worth up to $107 million in state incentives over the next two years.

State Sen. Joe Bolkcom, D-Iowa City, criticized the Branstand administration for the Orascom deal. He took a similar position Thursday, celebrating the capital investment while criticizing the governor’s approach to economic development.

“The governor continues to show he is inept at negotiating with taxpayer provided subsides. Handing over more than $170 million in taxpayer money to two very profitable fertilizer corporations that were going to invest in Iowa anyway is a waste of millions,” Bolkcom said in an email. “The natural incentives in Iowa of low natural gas prices and proximity to Iowa farmers made this a done deal. Iowa taxpayers can't afford any more of these poorly negotiated deals.”

Economic Development Authority General Counsel Tim Whipple acknowledged that the Port Neal project has a smaller incentive package than the Orascom project, which was based close to Illinois.

“But in the first case, there was a much greater competitive threat from Illinois and that made that different," he said.

Tom Vilsack, the U.S. Secretary of Agriculture, in a Sioux City appearance, said the CF expansion provides a great, low-cost option for fertilizer that farmers need.

Vilsack said there will be an economic rippling effect, as the money will be churned into other farming-related purchases.

-- Journal staff writers Mike Wiser and Bret Hayworth contributed to this report.

CORRECTION: An earlier version of this story had the incorrect cost of the Donaldsonville, La., facility expansion. It has been corrected in this version. 


Be the first to know

* I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy.

Related to this story

  • Updated

CF Industries Holdings Inc. plans to spend $2.1 billion to expand its Donaldsonville, La., plant. The amount was incorrect in a story headline…

Get up-to-the-minute news sent straight to your device.


News Alerts

Breaking News