New $1.12 Billion Chemical Plant for Louisiana

April 11, 2017

Zengtai Liao, chairman of the Wanhua Chemical Group, has announced the company will develop a chemical manufacturing complex in Louisiana, with plans for the $1.12 billion project leading to a specific site selection later this year.

Wanhua will produce methylene diphenyl diisocyanate, or MDI, in the project, which will combine a $954 million capital investment by Wanhua with a $166 million capital investment by project partners. The project will create 170 new direct jobs with an average annual salary of $70,440, plus benefits. Louisiana Economic Development estimates the project will result in another 945 new indirect jobs, for a total of 1,115 new jobs in the state.

Wanhua’s project will be the second-largest foreign direct investment in Louisiana by a company based in mainland China, following the $1.85 billion methanol complex under development by Yuhuang Chemical in St. James Parish. Last month, Louisiana Economic Development Secretary Don Pierson led a Louisiana contingent to Wanhua Chemical’s global headquarters in Yantai, China, where he and Liao completed final plans to move the project forward.

The Louisiana facility will be a major component of Wanhua’s global development of MDI, a chemical commonly used for polyurethane foams, insulation and footwear. Wanhua is the world’s largest producer of the polyurethane raw material.  According to the consulting firm IHS Markit, Wanhau’s 1.8 million metric tons of annual MDI capacity represents about 24 percent of the world’s total.

Wanhua's deal with the state will exempt the company from property taxes for 10 years per the Industry Tax Exemption Program. In addition, Louisiana's Quality Jobs Rebate program will grant a 6 percent rebate for 10 years for up to 80 percent of a company's payroll for new direct jobs. In July 2018, the company's Louisiana payroll will be eligible, according to the LED. 

Wanhua is expected to use the $4.3 million state grant to offset some of its infrastructure costs. Wanhua itself will pump $954 million into building the complex. Project partners plan to deliver the remaining $166 million in construction costs, according to the project's announcement.

Wanhua Chemical will announce its final site choice in the coming months. The company considered many industrial site options, including locations in Texas, before choosing to invest in Louisiana.