ExxonMobil expects to begin pouring the foundation for its $500 million polypropylene production expansion in the coming days after months of engineering and construction work on-site in north Baton Rouge.
The plant expansion is expected to add 450,000 tons of polypropylene to the company's U.S. Gulf Coast facility capacity. The product is already made in Baton Rouge.
Since the expansion began, ExxonMobil has spent $130 million across 21 businesses in Louisiana. Turner Industries, a Baton Rouge-based petrochemical services business and Dallas-based Jacobs Engineering were co-awarded an engineering, procurement and construction contract. Jacobs Engineering has offices across Louisiana.
For the first time, ExxonMobil also has contracted with local technology businesses for virtual reality training, some of which has been used in other facilities since it began the project. Virtual reality training in particular was a new venture encouraged by younger engineers in the company, executives said. The visceral experience of a virtual work scenario has been effective so far, they said.
Baton Rouge-based digital media company King Crow Studios, alongside 3D Media and Pixel Dash, were tapped by ExxonMobil for the virtual reality training modules.
Polypropylene is used as a raw material in manufacturing lightweight plastics, some of which end up as fibrous materials such as surgical gowns or baby diapers. Other final products range from an insulated recyclable styrofoam alternative coffee cup to super lightweight vehicle parts. Demand for polypropylene has been driven by a growing middle class overseas, particularly in Asia. Food-grade plastic film is one driver in particular that enables longer shelf life of consumer products, ExxonMobil executives said.
The project has generated more than $1 million in local sales tax revenue stemming from procuring supplies and equipment, according to the company's records. By the time the project is completed, the company estimates it will generate about $30 million in local sales tax revenue.
ExxonMobil's project has supported 365 construction jobs on-site to date and during peak construction will require 700 construction workers. About 65 full-time jobs were created, including contractors, the majority of whom have already been hired. The new unit is expected to start up in 2021.
In exchange, the business leveraged several economic incentive programs, such as the Industrial Tax Exemption Program, which provided a large tax abatement.
"Our mission is to competitively produce performance polymers to meet the world's growing demand," said Travis Fuller, ExxonMobil's chemicals project venture executive.
For the first decade after the facility begins operation, the majority of the production will be exported to the Asia Pacific region, Fuller said.
ExxonMobil sees the investment as a pilot to show that U.S. manufacturing can be cost-competitive for global export.
Likewise, tariffs do impact the company's investment decisions but it hasn't hit U.S. Gulf Coast production at this point.
"We want free trade throughout the world … it hasn't stopped our growth, but it is something that we need to watch," said Charles Dabadie, ExxonMobil Chemical Americas regional manufacturing manager.
ExxonMobil is about two-thirds through its $20 billion capital investment commitment for the U.S. Gulf Coast expansion efforts. Much of the previously disclosed investment has been in Texas rather than Louisiana.
The company spent $500,000 to create new turning lanes on Scenic Highway and donated mulch to BREC and Baton Rouge Green worth $100,000. Excess office furniture was donated to Habitat for Humanity.
ExxonMobil opened a community center adjacent to its offices along Scenic Highway and donated office space to the Baton Rouge North Economic Development District, the Urban Restoration Enhancement Corp. and the ExxonMobil YMCA Community Outreach Retiree Alliance.
Each organization expects to host events at the space; the economic development group, in particular, is planning small business assistance programs.
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