Renewable fuels company to locate at Belwood
Published 1:00 am Friday, October 20, 2017
NATCHEZ — Renewable fuels company Velocys plans to locate its first U.S. bio refinery in Natchez, bringing an estimated 140 jobs to the area.
The 100-acre facility on the county’s Belwood industrial site near the Natchez-Adams County Port will support 40 jobs at an annual payroll of $4 million, with at least 100 indirect jobs in the forestry sector at an annual payroll of $4 million.
“This is an important step toward the development of our first bio refinery in the U.S. to address the attractive and growing renewable fuels market,” Velocys CEO David Pummell said in a statement. “We welcome the significant support for this plant at the local level, including the future financial support that further enhances plant economics.”
Email newsletter signup
Adams County is investing $42 million of economic development incentives, which would reduce the company’s future tax liabilities. The capital investment is anticipated to be several hundred million dollars.
“We are pleased to have Velocys join our growing industrial family,” Board of Supervisors President Mike Lazarus said. “These quality jobs, significant investment and purchases of area forestry products will have a huge and meaningful impact on our area and local economy.”
The project also expects to qualify for additional incentives worth up to $15 million, provided through Mississippi’s Advantage Jobs Act and other statutory tax incentive programs.
“Velocys will receive these economic development incentives upon meeting investment and job creation milestones,” Natchez Inc. Executive Director Chandler Russ said. “This process creates a win-win situation for the community and for the company.”
Russ said if the company meets its milestones, the land would be gifted to Velocys. If the company fails to meet its milestones, the company would have to pay the $1.5 million the property is valued at.
The company would take up 100 acres of the 110 acres available on the site, Russ said.
Velocys Commercial Director Jeff S. McDaniel said Natchez was chosen based on a review of 12 possible sites in four states throughout the Southeast.
McDaniel said the company based the decision on several factors, including the availability of timber, the infrastructure of the site, site characteristics, the community, workforce and incentives provided by the state and community.
“The company’s extensive site search and selection of the Adams County site continues to prove that we are a world-class location for industry looking to leverage barge, rail, highways, infrastructure and natural resources,” Russ said.
McDaniel said the company utilizes wood such as treetops, limbs and smaller trees that cannot be used for lumber and turns them into renewable diesel and jet fuel. The Natchez site is expected to produce 20 million gallons per year of bio fuel.
Russ said the company’s consumption would be significant.
“The wood basket and forestry products in our region are in dire need of more consumers,” Russ said. “Velocys’ plant will be a great step toward filling some of that void in the market. We look forward to seeing them grow.”
Depending on engineering studies, the company plans to use the port during the initial construction to ship certain prefabricated structures, McDaniel said. However, logistically, the wood is expected to be delivered by truck and the product would be shipped by rail, he said.
Even with another round of funding obtained through the Delta Regional Authority, the county is expecting to come short of completing the levee around the site without additional funding.
Lazarus said Thursday after the latest round of funding — $500,000 — approximately $2.5 million would be needed to complete the levee.
While Lazarus said the county would continue to seek alternative sources of funding, he believes supervisors would do what they had to do to complete the levee.
McDaniel said the levee could be completed concurrently with the plant. McDaniel said he anticipates approximately a year being required to finalize financing, and the construction process would take approximately two years.
Russ said not counting what the school district would receive, the fee in lieu of taxes the county is projecting to receive is approximately $1 million per year.
“The economics for us to finish the levee are favorable, based on the investment coming,” Russ said. “It is important to note the county’s risk is reduced. We will never be acting in front of the client. We are never exposed from the capital outlay standpoint.”
Mississippi Development Authority Chief Economic Development Officer Billy Klauser said the MDA wishes Velocys continued success in its venture in Adams County.
“With its strategic location and close proximity to a major waterway, Natchez was a natural fit for this proposed capital investment of several hundred million dollars,” he said.
Velocys is primarily based in Houston with facilities in Columbus, Ohio, Oxford, United Kingdom and Oklahoma City.