Slow and steady: Incoming companies beginning to make impactPublished 12:03am Sunday, November 11, 2012
Economic development efforts in Adams County have had an exciting two-year run.
With six companies announcing plans to invest millions and hire hundreds, the ball has been rolling.
But announcements are only the first public step in the process. What matters to the community, economic developers know, is what happens after the commitment.
Though some have adjusted their timelines, company and local economic development officials say that all of the industries that have committed to the Natchez-Adams County area in the last two years are on track to keep their collective commitment to create nearly 700 jobs.
Of those commitments approximately 140 workers are already employed.
The companies include Elevance, Enersteel, Genesis Energy, KiOR and Magnolia and Fores Frac Sand
A sixth company, Virdia — formerly HCL Cleantech — has long-range plans that include a Natchez location.
Purchasing the former Delta Biofuels at the Natchez-Adams County port in 2011, the company continued to produce biodeisel from soybean oil in its first year, entering into continuous operation.
Other plans to expand its operations are under way. The company creates chemicals that serve as ingredients for personal care products, machine lubricants, detergents and fuels.
When the company announced its commitment to locate in Adams County, it committed to adding 165 permanent jobs. For much of the year, company officials have been quiet about how many employees have been hired, citing the required quiet period for their initial public stock offering.
However, in September, the company withdrew $100 million IPO because it had raised $104 million in private offerings.
This week, company officials could not be reached for comment about where their project stands. Natchez Inc. Executive Director Chandler Russ said most of Elevance’s executive board was in Indonesia working on a project there.
While the company has done some hiring, Russ said, the process will ramp up significantly toward the end of its expansion construction.
“They are out there now, prepping the site, doing demolition and site preparation, getting ready for the construction side of things,” Russ said. “I think we will see construction ramp up in January and peaking toward June and July, but continuing steadily for another eight to nine months.”
After more than a year operating at the former Dynasteel facility, production at Enersteel’s Natchez plant is moving along smoothly, and Plant Superintendent Joey Gilbert said the plant is staying busy.
Enersteel’s workforce is currently working on pollution control ductwork and other infrastructure for a coal-fired power plant.
The average job takes approximately six months to complete, Gilbert said. But Enersteel, he said, will be starting a job in January that will take about a year and a half to finish.
Gilbert said the job would be similar to the current job, creating infrastructure for another coal-fired power plant.
Gilbert said the company currently employees 135 and is hiring.
“(Our staff size) depends on what kind of job we’re doing, but the magic number is about 140,” he said.
Anyone interested in working for Enersteel should need to apply at the WIN Job Center at 107 John Pitchford Parkway.
Russ said Natchez Inc’s commitment with Enersteel required the company to create 75 jobs.
“They have exceeded all of the expectations and have future growth plans for that facility,” he said. “They are one that has been birthed, invested, come to fruition and is out of the ground and continues to make progress. That is what we are after with all of our projects.”
When Genesis Energy announced a partnership with Southern Pacific Resource Corporation to transport dilbit — a type of crude oil blend made from diluent and bitumen — from Canada to the coastal refinery market by way of the Natchez-Adams County Port in July, the company said it anticipated the creation of 20 new jobs.
But the announcement also meant an additional 20,000 rail cars and increased barge traffic into the port.
Genesis already owned the Tessenderlo Davison Chemicals terminal in the port, and the county is investing $1.1 million in a loading and unloading system, which is being funded by a combination of a community development block grant and a rail loan from the Mississippi Development Authority. The company’s lease agreement with the county funds the note payments on the $700,000 rail loan.
This week, Genesis Chief Executive Officer Steve Nathanson said during the company’s quarterly earnings call that the rail and terminal construction in Natchez is approaching completion.
“We expect to receive Western Canadian crude in the first quarter of 2013,” he said.
Genesis’ Human Resources Officer, Grace Ann Nathanson, said the company has hired three employees, who started a month ago and are going through training.
“We will hire four more new people early next year, and in May we will hire the rest of them,” she said. “How many will be hired at that time will be based on the number of rail cars coming through.”
Officials could break ground on the alternative fuel company KiOR’s proposed Natchez facility as early as March.
KiOR Chief Executive Officer Fred Cannon, who spoke of the project during the company’s third quarter earnings conference call Thursday, said such a timetable would be subject to the company’s financing.
“We still think we’re on track to deliver (a) commercial production-added facility (in Natchez) in late 2014,” Cannon said.
Based on work the company has done so far, the Natchez project should cost approximately $350 million, he said.
“In the next quarter or so, we’ll have a much better handle — having done more on our front-end engineering and design — on the exact cost and scope of the project,” Cannon said.
The CEO said that in addition to having cleared the site for the company’s Natchez project — the former Belwood Country Club — KiOR has done all of its geoscientific work on the site.
“We’re going through engineering and technical now on designing for the future,” Cannon said.
The proposed Natchez project will produce a renewable cellulostic biofuel that uses dry biomasses such as wood products. KiOR officials have previously said that a key component on getting work started in Natchez would be to get their Columbus plant — which does what the Natchez plant is slated to do in a smaller capacity — in production, and Thursday Cannon said the Columbus facility began production in October.
“Our proprietary technology is operating as designed at commercial scale and producing a high-quality renewable crude oil, confirming our design specs,” Cannon said.
The company is confident it will start commercial shipments from the Columbus facility later this month, Cannon said.
“In fact, we had our first small-scale sale of cellulostic fuel from our demonstration facility in Houston, which will ensure that KiOR fuel will be used on the U.S. roads any day now,” he said.
The company has previously projected it will create approximately 320 permanent direct and indirect jobs and 400 construction jobs with the Natchez project.
The timeline released by KiOR earlier this year slates for hiring at the plant to start in the final quarter of 2013 with full-time employment beginning in the third quarter of 2014.
Magnolia Frac Sand and Fores Frac Sand
In May, Blain Sand and Gravel announced its Adams County operations would be teaming up with Fores North America to create two companies to mine and process sand that will be used in the process of hydraulic fracturing.
Blain’s end of the project — which would be named Magnolia Frac Sand — will mine the sand, while Fores — which will operate in Adams County under the name of Fores Frac Sand — will process it so it can be used in the fracking process. A second Fores company — Fores Resin Coating — will take some of the sand and coat it with a resin that will allow it to be used for higher intensity fracking processes.
The companies committed to creating 60 jobs between the two of them.
While the companies said at the time of the announcement that the initial phases of the project could be operating by October, that timeline has been revised.
The project is expected to result in a $34 million investment in the area, both at the existing Blain facility and in a transloading facility at the Natchez-Adams County Port. The Mississippi Development Authority is providing $364,000 for rail service upgrades and $250,000 to upgrade an existing access road for the project.
“Our project is progressing forward as planed with the exception of the time frame,” Magnolia President Lee Stevens said. “Everything is still on go as far as the number of employees we will hire and the capital investment we will make in Adams County at our facility and the transloading facility at the port.”
Russ said it’s not uncommon for companies to have to adjust timelines after initial announcements.
“When you are mobilizing $37-40 million and trying to get out of the gate and doing it correctly, often you are going to run into timeline issues there,” he said.
Virdia — formerly HCL Cleantech — announced in September 2011 that it has plans to open a plant that converts pine products into sugars that can be used to make fuel in Natchez by 2015. The project is expected to generate 200 jobs.
But while Virdia is still working with Natchez, Russ said Natchez is still in the long-range plan for the company.
“We are probably two years out before we see any activity,” he said.
“Their timeline right now is to build a demonstration unit in North Mississippi, and once they do the demonstration plant they will have their first commercial operation. All of their efforts and focus is on the demonstration facility right now.”
Russ said that the last year could probably be considered record-setting for industrial recruitment for Adams County, but it also means that the bar has been set high.
“To do nearly half a billion dollars in projects and look with the ability to retool your industry and community out there, it has been a stellar year,” he said. “We are going to continue to push for additional growth and additional expansion, because we need to.”
The recent closure of pulp fiber recycler Mississippi River Pulp, which affects 79 employees, is an example of why the area always needs to be on its toes when it comes to keeping and recruiting industry.
“MRP is a reminder that companies have cycles, and you have got to continuously be trying to bring in new business and new industries, just in the replacement of those that may have run their course,” Russ said. “It is important that we are always moving the bar. I think we will be able to continue our momentum in the months and years ahead.”