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South Korea-Based Lotte Chemical-Axiall Corp Plan $3 Billion Complex In Lake Charles, Louisiana

06/14/2016
LACC LLC, a joint venture of South Korea-based Lotte Chemical and Axiall Corp., will build a $1.9 billion ethane cracker complex near Axiall’s existing manufacturing plants in Calcasieu Parish, Louisiana. Using a portion of ethylene produced by that plant, Lotte Chemical will produce monoethylene glycol at a $1.1 billion plant constructed beside the ethane cracker.

Both projects will create 215 new direct jobs, with the ethane cracker producing 135 jobs and the monoethylene glycol facility producing 80 new direct jobs. The site is located on 250 acres at the southwest corner of the junction of Interstates 10 and 210 in the Lake Charles area, according to Louisiana Economic Development.

“The Southwest Region of Louisiana is a global industry leader, from the production of refined fuels and chemicals to liquefied natural gas, cryogenic insulation, paper products and agricultural goods,” Louisiana Governor John Bel Edwards said.

“Axiall and its predecessor, PPG, have operated one of the largest economic driver industrial sites in Louisiana for many decades. We are excited that Axiall and Lotte Chemical have combined forces to create hundreds more quality jobs in addition to the thousands of existing manufacturing jobs in the Lake Charles area. This $3 billion investment adds great value for our state and tremendous economic opportunity for our people,” he added.

Both plants are expected to begin operating in 2019. Axiall will use its portion of the ethylene output to make vinyl chloride monomer, a precursor to plastics, and other products, such as caustic soda, chlorine and ethylene dichloride, LED said. Lotte Chemical will make monoethylene glycol, commonly called MEG, which is an important ingredient in the making of paper, textile fibers, latex paints, asphalt, resins, antifreeze, coolants and adhesives. It is expected to be the largest MEG plant in the U.S.

“Among Korean petrochemical companies, Lotte Chemical is the first to locate a project in the United States; as such, this project represents a significant investment by Lotte Chemical,” said Lotte Chemical President/CEO Soo Young Huh.

“For Axiall, this commitment marks the next phase of our continued investment in the Lake Charles area,” said Axiall President/CEO Tim Mann. “Our construction site is just west of our largest chemicals plant, where we have operated for nearly 70 years.”

Lotte will be the sole owner of the MEG plant, with construction on that site and the ethane cracker underway now. Upon completion of the MEG plant, Lotte plans to produce 700,000 tons per year of that product, chiefly for export to customers abroad. The ethane cracker is designed for an annual capacity of 1 million tons to be shared equally by the two companies.

Louisiana faced competition for the projects, including from Texas for the ethane cracker, and Texas and South Korea for the MEG production facility. To secure the combined projects, the State of Louisiana offered the companies a competitive incentive package that includes a Modernization Tax Credit of $4.55 million for the ethane cracker project. Both projects will receive the comprehensive solutions of LED FastStart, the top-ranked state workforce development program in the nation.

The projects will receive Economic Development Award Program incentives of $700,000 for the ethane cracker and $1.47 million for the MEG facility to pay for site infrastructure improvements. In addition, the companies are expected to utilize Louisiana’s Quality Jobs and Industrial Tax Exemption programs.

“The Southwest Louisiana Economic Development Alliance would like to thank Lotte Chemical and Axiall Corporation for their investment in our region,” said Vice President R.B. Smith, who oversees business and workforce development for the Alliance. “Bringing this company to Southwest Louisiana keeps us on the world stage. This new complex will have a large economic impact in our region, with a major capital investment and a large number of employed workers. The Alliance stands ready to assist this project in any way possible.”

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