As south Louisiana awaits the start of the next industrial construction boom to lift it out of an economic slowdown, one of the major projects on the drawing board—a $1.25 billion chemical complex—appears to be pulling out of its proposed St. James Parish location.
China-based Wanhua Chemical announced last fall it would build a 250-acre manufacturing complex in Convent, creating more than 1,000 direct and indirect jobs along with 1,000 construction jobs. But the company began reconsidering the St. James site in recent weeks amid concerns over the U.S.-China trade war and pushback from residents and environmental groups.
Today, an environmental group announced Wanhua pulled its land-use application for the project in St. James. The Louisiana Bucket Brigade, along with RISE St. James, celebrated the development as win in their fight for communities impacted by petrochemicals.
“It was ordinary people who spotted the bad deal and stopped it,” said Anne Rolfes of the Louisiana Bucket Brigade in a statement. “Today Wanhua, tomorrow Formosa.”
But state and Wanhua officials have not confirmed whether the project will no longer be built in south Louisiana. Wanhua U.S. Operations official William Day, in a statement, said the company decided to change the scope of the project due to a “significant increase in the capital expenditure budget.”
“A new project location is also under review,” Day said, adding that Wanhua is still committed to building the facility “in the U.S.”
Louisiana Economic Development officials say they are “aware” Wanhua is re-evaluating its project in St. James, but did not comment further.
Local economist Loren Scott said he, too, was aware of Wanhua’s reconsideration. The U.S. trade dispute with China is likely a big factor in that decision, Scott adds, in more ways than one.
“The trade war figures heavily into this,” he says. “Number one, this may be a tool the Chinese are using to put pressure on Trump. Second, the steel tariffs have increased the cost of building steel-intensive buildings by a nontrivial amount.”
The third reason, Scott says, has to do not with trade but with resistance from the local community and nonprofits.
“I’m not sure they were anticipating the pushback they were getting from St. James residents,” he says.
The possibility of Wanhua pulling out of south Louisiana comes at a time when the region’s industrial construction sector has hit a lull in between projects, though several are about to start up.
“You want there to be plenty of activity on the other side of this lull,” Scott says.
LED notes other major investments in the Capital Region pipeline include announced expansions by Shintech in Iberville Parish, Methanex in Ascension Parish, ExxonMobil and Formosa Plastics in East Baton Rouge Parish, and the Formosa project St. James.