Wanhua drops application for $1.25 billion complex in St. James

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.

Last week, the company dropped its land use application for the project, saying it has changed the project’s scope and is considering another site.

Company officials had said earlier that construction costs at the Convent site had ballooned to $2 billion from the $1.25 billion originally planned. St. James Parish President Timmy Roussel also told The Advocate a company that had offered land in expectation of selling chlorine to Wanhua took back the offer after the proposed polyurethane complex was scaled back to a facility that wouldn’t need chlorine.

Wanhua dropped its land use application for a 250-acre (101 hectare) site in an email Wednesday, which the newspaper obtained through a public records request.

“As you are aware, the project scope has changed and a new project location is under review,” wrote William Day of Wanhua Chemical U.S. Operations. “Given these two changes to the project, Wanhua respectfully withdraws the application.”

Louisiana Economic Development officials said last week they were “aware” Wanhua was 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.