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Japan-Based Shintech Inc. Invests $1.4 Billion On Ethane Cracker Plant Iberville Parish, Louisiana

04/22/2015
Shintech Inc. will make a $1.4 billion capital investment to supply its facilities with new ethylene production capacity in Iberville Parish, Louisiana. The world’s largest PVC plastics manufacturer, Shintech will be constructing the first ethylene plant built in the U.S. by a Japanese chemical company.

The new project will bring total Louisiana capital investment to date by Shintech to $4.7 billion. With approximately 5,700 acres on the Mississippi River southwest of Baton Rouge, Louisiana, Shintech operates plants in Plaquemine and Addis that chiefly produce polyvinyl chloride, or PVC, and vinyl chloride monomer, or VCM – the key ingredient from which PVC plastics are made.

The latest $1.4 billion expansion will include installation of an ethane cracker at the Plaquemine complex and capital upgrades to connect the ethylene output to VCM and PVC production there. Shintech expects to break ground on the project in the second quarter of 2015, with completion of the project slated for the first half of 2018. Shintech is near completion of an incremental expansion of its VCM, PVC and caustic soda capacity in Iberville Parish, while an affiliated company, SE Tylose, is building a new plant at the Plaquemine site to produce hydroxyethyl cellulose, or HEC – a key component of latex paints.

“We at Shintech are very grateful for the understanding and cooperation of the State of Louisiana in many ways,” Shintech Inc. founder and Chairman Chihiro Kanagawa said. “Without it, we would not have been investing as much as $4.7 billion in the Louisiana facilities. I echo what Governor Jindal has said. Shintech and the State of Louisiana have built a wonderful relationship. We would like to further strengthen this wonderful relationship.”

As an incentive to secure the ethylene expansion, the State of Louisiana offer Shintech a competitive incentive package that includes a $5 million performance-based grant to offset the cost of infrastructure improvements at the Plaquemine site, along with a $5 million Modernization Tax Credit, to be claimed in equal installments over a 5-year period. In addition, Shintech will receive the comprehensive workforce solutions of LED FastStart– ranked as the No. 1 state workforce development program in the nation – and the company is expected to utilize the state’s Quality Jobs and Industrial Tax Exemption Program.

Governor Bobby Jindal said, “This is the third major expansion announced by Shintech in Louisiana since 2008, and our partnership with this global chemical leader continues to strengthen. By providing an unrivaled manufacturing workforce, a top business climate and quality infrastructure along the Mississippi River, our state is helping companies like Shintech thrive and compete better in the global economy. This project’s positive return for Louisiana is clear: Our economy will continue to grow, hundreds of families will earn a great living, and we will continue to establish Louisiana as the best place in the world to live, work and raise a family.”

“Any time one of our existing manufacturing facilities here in Iberville Parish and the state decides to expand, that’s great news,” said Executive Director Hank Grace of the Iberville Parish Chamber of Commerce. “Shintech not only is retaining high-quality existing jobs in the parish but creating great new jobs as well. We’re excited about what Shintech is doing here in the state of Louisiana to strengthen our industrial sector and the broader economy.”

“BRAC’s team has a long history of working closely with Shintech to assist them with their tremendous growth and expansion in the Capital Region,” said President/CEO Adam Knapp of the Baton Rouge Area Chamber. “The company has become an integral part of the Baton Rouge area and this announcement further solidifies their commitment to the region. The significant capital investment and job creation being made by Shintech speaks volumes about the strength of the region, and will help continue to fuel our region’s rapid economic expansion.”

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