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Chinese Chemical Company Opening Facility In Louisiana

Yuhuang Chemical Inc., a subsidiary of Shandong Yuhuang Chemical Co. Ltd., will make a $1.85 billion capital investment in the project that represents the first major foreign direct investment by a Chinese company in Louisiana.

VACHERIE, La. (AP) -- A China-based company is opening a methanol manufacturing facility on the Mississippi River in St. James Parish that's expected to create 350 to 400 permanent jobs.

Yuhuang Chemical Inc., a subsidiary of Shandong Yuhuang Chemical Co. Ltd., will make a $1.85 billion capital investment in the project that represents the first major foreign direct investment by a Chinese company in Louisiana.

Gov. Bobby Jindal and company CEO Charlie Yao announced Thursday that the first phase of construction would begin in 2016, with operations beginning by 2018.

"Foreign direct investment projects add great value to our state by creating high-paying jobs, increased levels of international trade and extraordinary career opportunities for the families of Louisiana," Jindal said in a news release. "Our efforts reforming government, lowering taxes, and improving our state's business climate are paying off."

Yuhuang Chemical has secured an option to buy more than 1,100 acres next to the Plains All-American Pipeline terminal for the first phase of the three-phrase venture. After the first plant is completed, officials said a second methanol plant will be built to reach an annual capacity of 3 million metric tons per annum of methanol.

A third phase will include a methanol derivatives plant that will produce intermediate chemicals.

Most of the project's methanol will be exported by oceangoing vessels for use in the parent company's production of downstream chemicals in China, with about 20 percent to 30 percent of the methanol to be shipped by barge and rail and sold to North American customers.

"Building a new world-scale methanol unit in Louisiana is Shandong Yuhuang's first major step in becoming a global player in the petrochemical industry," Yao said. "While the company has long been highly regarded in China as one of its primary contributors to the industry in Asia, this Louisiana operation represents the company's commitment to significance on the world petrochemical platform."

Yao said the project's location fits well "with our strategy to leverage the advantage that natural gas feedstock provides."

Louisiana Economic Development began discussing the potential project with Yuhuang Chemical in February. To secure the project, the state offered the company an incentive package that includes two performance-based grants: $9.5 million to be paid over five years beginning in 2017 to offset infrastructure costs and $1.75 million to be paid over 10 years to help defray the costs of necessary riverfront access and development.

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