A $1.3 billion fertilizer plant proposed by a Egypt-based company for Lee County would be the largest private investment in the state’s history, Gov. Terry Branstad says.
Iowa Fertilizer Company LLC, a unit of Cairo, Egypt-based Orsacom, wants to produce urea ammonia nitrate, diesel exhaust fluid, and potentially urea at a site in Lee County about halfway between Fort Madison and Burlington. Its fertilizer output would be distributed in Iowa, Illinois and Wisconsin, replacing fertilizer that is now imported.
The Iowa Economic Development Authority Board approved more than $33 million in direct and indirect incentives Friday for the project.
“I am very excited to announce that with action today from the Iowa Economic Development Board, Iowa is one step closer to landing the largest capital investment project in the history of the state of Iowa,” Gov. Terry Branstad said.
The projected 165 jobs the project would create would be especially welcome in Lee County, which has one of the state’s highest unemployment rates at over 9 percent.
“We are hopefully and anxious that they choose our area, because obviously a big project like this would have a great impact,” said Matt Morris, president of the Fort Madison Economic Development Group, which has committed $100,000 in local match for the incentives.
Iowa Fertilizer proposes to invest $101 million in direct equity into the project, with most of the remainder coming from $1.194 billion in Midwestern Area Disaster Bonds.
Iowa Economic Development Authority spokeswoman Tina Hoffman said the agency has heard that the company is also considering at least one other location in Texas. She said access to barge and rail at the Lee County location in Iowa makes it very competitive, however.
Iowa’s incentive package includes a $805,000 zero-interest, five-year loan, a $805,000 forgivable loan, $1.4 million in job training assistance, and tax credits with a maximum value of $31.5 million.
The Iowa Transportation Commission and Lee County are also expected to consider incentives.
Hoffman said the project would create about 1,500 to 2,000 construction jobs during construction, and would also create jobs for Iowa companies that would provide supplies and services.
The facility would cover 300 acres near Wever, close to the Burlington Northern Santa Fe Railroad and Highway 61.
The project timetable would begin with land acquisition beginning this spring and with production startup in the late fall of 2014. Local and regional development groups have only been working with the company for a few months.
“It’s a very energyetic company, very impressive and very organized,” said Executive Director Steve Biseniusof Lee County Economic Development Group. “They move quickly.”
Midwest Area Disaster Bonds, the major financing element for the project, are provided for in the Heartland Disaster Tax Relief Act of 2008 after the Midwest was wracked by tornadoes, floods and storms in the summer of 2008. Iowa received $2.6 billion in bonding authority under the act.
Tax exempt provisions of the bonds would allow the company to obtain a lower interest rates by making them more appealing to buyers.
Urea ammonium nitrate is a liquid fertilizer used in row crop production that is made by combining urea, nitiric acid and ammonia. It can be mixed with pesticides, herbicides and other nutrients to reduce costs of making separate applications for each.
Diesel exhaust fluid was required in the United States beginning in 2010 for vehicles with Selective Catalytic Reduction Technology to lower emissions. It is a clear liquid solution of urea.