SERGEANT BLUFF | Hiring recently began to fill 100 new positions at CF Industries' Port Neal fertilizer complex.
A record $1.7 billion expansion announced Nov. 1 will double the company's employment at the industrial site just south of Sioux City.
Construction for the single-largest private capital investment in Iowa history is expected to begin later this year, with a completion date anticipated for 2016.
Plant manager Nick DeRoos said the hiring process should be completed over the next 12-18 months. That will give the new workers to complete their training before the new plant comes on line.
Posted positions include operators, engineers, millwrights, mechanics and maintenance personnel.
"We have been getting very good response," DeRoos said. "We're very happy with the candidates."
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The new jobs will start at average salaries of $55,000, and increase to about $85,000 after the workers complete certification. The added activity at the complex also is projected to create about 700 indirect jobs, according to the company.
Between 1,500 and 2,000 construction workers also will be needed during the more than two years it will take to construct the plant.
"The size of this project is just unbelievable," Woodbury County Board member Larry Clausen said during the Nov. 1 announcement. "There's so many zeros in this, it's hard to fathom."
CF, based in Deerfield, Ill., is awaiting final state regulatory approval to start major construction activity. The Iowa Department of Natural Resources is reviewing the company's application for a state air permit.
"We're hopeful that we will be able to begin to move dirt and drive pile sometime this summer," CF CEO Steve Wilson told analysts in a recent conference call. "But certainly, we don't control both ends of that process. We only control the submission and then the response to questions that come along with that."
CF, North America's largest producer and distributor of nitrogen plant nutrients, is spending a combined $3.8 billion to expand production at Port Neal and a facility in Donaldsonville, La.
Near-record corn prices have boosted demand for nitrogen fertilizer, which must be applied to corn and certain other crops to add nutrients in the soil.
Also playing a key role in the company's decision to expand: new technologies that extract natural gas from shale rock formations in North America. That's lowered prices for the fuel, which accounts for about 70 percent of nitrogen production costs.
The U.S. currently imports more than two-thirds of its urea production, giving CF and other manufacturers an incentive to boost domestic production.
The added Port Neal production will replace higher-priced fertilizer imported from other countries, helping farmers in Iowa and other Midwest states save millions of dollars annually, Gov. Terry Branstad said.
"It's going to improve our profitability for agriculture," Branstad said at a press conference in Sioux City, where he joined Wilson for the announcement.
Wilson said the past performance of the more than 100 employees at 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.
State and county governments is giving the company millions of dollars in incentives to land the historic expansion. 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.
Woodbury County 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 Port Neal plant, which CF took over after its 2010 acquisition of Terra Industries, has the capacity to produce up to 1,100 tons of ammonia, the basic building block in various nitrogen products, each day. Most of that production is upgraded into urea ammonium nitrate solutions, or UAN, a liquid fertilizer.
The expansion calls for construction of a second ammonia plant, which will add two times more production. Ammonia from the new plant will be converted to granular urea, a solid nitrogen fertilizer not currently produced at Port Neal. The urea product can be applied separately or mixed with phosphate or potash fertilizers.
CF retained the engineering and procurement services of German firm ThyssenKrup Uhde as its technical partner in executing the Port Neal and Donaldsonville expansion. In preparation for the start of construction, a team of CF personnel have been temporary living in Germany.
Wilson said CF has a "very aggressive timetable" for the two projects. As of Feb. 15, CF has spent or committed $480 million combined. In this year alone, the company anticipates spending between $1 billion and $1.3 billion, which would account for 35 to 40 percent of the total expenditures.
So far, CF has ordered rotating equipment and most of the high-pressure equipment for both ammonia plants, the urea plants and the nitric acid plant, said Anthony Will, senior vice president of manufacturing & distributing.
