Cheaper feedstocks and convenient access to water and rail are largely responsible for a burgeoning plastics market in the Baton Rouge metro area, Baton Rouge Business Report reports.
Much of the demand will come from the auto and appliance markets, as new technologies increasingly make the product, in its myriad forms, more attractive to buyers.
It’s not strictly a local phenomenon, of course. Rising U.S. energy production is providing vast amounts of affordable feedstock for PVC and polyethylene plastic resin production, and producers worldwide are taking notice. The demand is there as well—global demand for petrochemical feedstock is forecast to rise to nearly 18 million barrels per day by 2050.
For these reasons, energy companies are investing billions of dollars in the petrochemical sector, with the heaviest concentrations along the Gulf Coast. American Fuel and Petrochemical Manufacturers members have said they plan to build at least 11 new ethylene plants in the region over a four-year span that began in 2018. Those plants are expected to increase polyethylene capacity by more than 30%.
ExxonMobil’s new $469 million polypropylene expansion, currently under construction, is the latest entrant to the Baton Rouge market. The project comes on the heels of a $1.49 billion chloralkali and vinyl chloride monomer production plant at Shintech Louisiana LLC in Plaquemine, which is expected to begin operations in 2021. Elsewhere, Formosa Plastics’ new $9.4 billion manufacturing complex in St. James Parish is expected to break ground later this year.
Travis Fuller, chemical venture growth executive at ExxonMobil in Baton Rouge, says his company’s decision to build locally was a no-brainer, as the site benefits from an abundance of synergies—available space, existing infrastructure, raw materials and utilities.
Once operational in 2021, the new polypropylene unit will produce as much as 450,000 tons of the product a year, which will be bagged and shipped by rail to New Orleans or Houston for export to South America, Mexico and/or certain Asian Pacific countries. To design and construct the unit, an engineering, procurement and construction contract was awarded to Baton Rouge-based Turner Industries and Jacobs Engineering. “Early on, we’ll export more than we’ll keep domestically, simply because there’s not enough domestic demand yet,” Fuller says. “Over the next five to eight years, we expect demand in the U.S. to catch up.”