Industries have to make logical sense

Published 12:00am Sunday, March 23, 2014

Illogical or ahead of its time? That’s a question often pondered in the realm of economic development.

Some things just make sense and some don’t. The key to a successful business it seems is to make sure you can create something that’s needed and cost-effective and located in the most opportune location possible.

International Paper originally located in Adams County because of one key — the area was overflowing with wood, IP’s key raw material.

For decades Natchez’s IP made a product that was profitable for the company. When doing so no longer made sense for the company the mill was shuttered.

Other industries also make sense — lots of farms exist in the area, for example, because of the flat fertile soil. Their products are needed, too.

Again, it just all makes sense.

Other industries just don’t make sense.

Several years ago when Rentech came knocking and eventually settled in as owners of the former International Paper site, something about their plans just never made sense.

Rentech’s original plans included taking German, World War II technology and turning coal into a fuel that could power engines on trucks, cars and airplanes.

The technology apparently worked, but the math didn’t as the company struggled to develop enough investment interest to allow their plans to actually take hold and a plant be constructed in Natchez.

All Natchez received was promise after promise. Eventually Rentech scrapped its plans publicly.

But the deal just never seemed to make sense to me. While Rentech’s technology seemed to work, the profitability seemed questionable since it was a complicated way to produce something that was already produced another way — refining petroleum products.

But the most baffling thing about Rentech wasn’t the technology, it was the answer to the question: Why would this need to be located in Natchez?

No one could ever answer that question. Without a nearby source for coal, Rentech’s plans seems suspicious from the get-go.

Recently another would-be game changer for our area’s economy announced an uncertain future.

A week ago, alternative-fuel manufacturer KiOR announced it would idle its Columbus plant. Since KiOR’s plans for a plant in Natchez hinged on the success of the Columbus plant, the future of KiOR Natchez looks dim.

KiOR had the opposite problem of Rentech. The location fit, but apparently the technology didn’t.

In simplified layman’s terms, KiOR’s plans were to take wood chips and turn them into oil that could then be refined into fuel.

Both KiOR and Rentech had issues. One had an illogical location and the other has questionable technology.

That’s not to say one or both of the companies may not eventually become successful, but for that to occur, both the timing and the logic must come together simultaneously.

With that that perfect balance of proven technology and logical location, the business plans will go up in smoke — just like Rentech did and how KiOR might.

Let’s hope KiOR can get its act together for the sake of the jobs it could bring to the county. But I wouldn’t hold my breath.

 

Kevin Cooper is publisher of The Natchez Democrat. He can be reached at 601-445-3539 or kevin.cooper@natchezdemocrat.com.