EuroChem Group AG and state officials are disputing a report that the company has delayed a $1.5 billion plant planned for Iberville Parish and is considering options outside the U.S. for ammonia and urea production.
The officials said late Monday the Bloomberg.com report contained a mistaken translation of a statement written in Russian.
Construction has not begun on the planned facility in Carville. If completed, the plant’s ammonia and urea would feed production of fertilizers by the company, which reported worldwide revenue of $5.6 billion for 2013.
Andrey Ilyin, EuroChem’s chief financial officer, was quoted by Bloomberg.com on Sunday as saying: “The decision on the project is delayed due to changes on the financial markets, namely affected access to credit resources.”
Ilyin added: “The ruble’s devaluation also made development of such projects more attractive in Russia.”
Officials of the Louisiana Department of Economic Development and Eurochem officials in Russia issued statements late Monday in Baton Rouge. Neither statement was attributed to specific state or company officials. Both statements were released through Gary Perilloux, communications director for the Economic Development office.
“EuroChem indicated … today that there was a translation mistake in previous reports indicating the company is delaying its proposed Louisiana plant and considering locations outside Louisiana,” state officials said in an email.
“The company indicates that it is continuing with due diligence and plans for a Louisiana location — either at the Iberville site it already has purchased or potential locations in St. John the Baptist Parish,” state officials concluded.
Remarks attributed to unnamed EuroChem officials said: “The project is still under consideration, and EuroChem remains on track with its original schedule, which has 2019 as a startup date.”
The mixup, according to the unnamed Eurochem officials, “is unfortunately the result of subjective interpretation by the Bloomberg translator.”
EuroChem is controlled by Russian billionaire Andrey Melnichenko, but the company’s global headquarters was moved last year to Zug, Switzerland.
In Louisiana, the 2,150-acre site for the planned ammonia plant in Iberville Parish was purchased from the state in January 2014 for $12 million. The purchase agreement requires Eurochem to spend at least $150 million and begin plant construction by the end of 2016.
Since the land purchase, however, Russia has become the target of international trade sanctions because of its military intrusions into Ukraine.
Neither EuroChem nor its owners are targeted by those sanctions. That means the company continues to have access to international banks. The ruble’s devaluation would give EuroChem an opportunity to take advantage of lower prices if were to build its ammonia plant in Russia.
Should EuroChem decide against building a plant at the old Point Clair farm site near Carville, the purchase agreement requires the multinational company to forfeit $2 million to the state in a sale of the property to another buyer. That sale would be arranged by Louisiana’s Economic Development Department, officials said last year.
“Because we had multiple companies interested in purchasing the Iberville site, EuroChem had to commit to purchase the site in order to retain that location option for their project,” Stephen Moret, state economic development secretary, said 15 months ago.
“If they don’t ultimately locate the project there, (the Department of Economic Development) has the option to designate an alternate buyer that would purchase the site from EuroChem,” Moret added then.
If built by Eurochem, the plant near Carville would hire 200 full-time employees and have an annual payroll of $11.6 million, officials announced last year. They added that 2,000 construction workers would be needed to complete the facility.
The state also agreed to provide Eurochem a $6 million performance-based grant to offset the costs of site infrastructure improvements.
However, if Eurochem exercises an option to buy an alternate site, the Goldmine Plantation in St. John the Baptist Parish, or place the plant at any other location, it will lose the Carville property and $2 million.