IFC gets tax credit; MFC gets investment

Lee County, Iowa — Lee County authorities on May 20 approved a higher tax credit for OCI N.V.’s Iowa Fertilizer Co. (IFC), which is building a $1.8 billion nitrogen plant near Wever, Iowa. The contract between the county, IFC, and the Iowa Economic Development Authority (IEDA) would increase IFC’s state tax credit from $10 million to $15 million per year until fiscal year 2017/18. The IEDA board approved the tax credit increase last July, but needed the county’s approval before the credits could be granted. Authorities said the change will not affect the county’s revenue or tax base. The IFC complex was 40 percent complete as of March 31 (GM May 5, p. 1), and is on track to start commissioning in fourth quarter 2015. OCI said the plant will have the capacity to sell 2.11 million mt/y of nitrogen fertilizer when it becomes operational, including UAN (1.505 million mt/y), ammonia (770,000 mt/y gross, 185,000 mt/y net), urea (420,000 mt/y), and DEF (315,000 mt/y). In other news, shareholders of Pakistan’s Fatima Group have approved the company’s plan to invest up to $300 million in Midwest Fertilizer Corp. (MFC), a $2.4 billion fertilizer facility planned for Indiana’s Posey County. The approval came at the company’s annual general meeting on April 30. The $300 million equity investment will reportedly be made over a period of four years, either directly into MFC or through a holding company. Plans for the facility are back on track after Indiana Governor Mike Pence reported on April 9 (GM April 14, p. 1) that the state had resumed discussions with the company after withdrawing support for the project in 2013 due to allegations from the U.S. Department of Defense that Fatima had not been fully cooperative with efforts to stop explosives development in Pakistan and Afghanistan. Fatima has since announced changes in its packaging and formulation of CAN fertilizer to make it less explosive. Plans are for the MFC facility to produce 2.59 million mt/y of product, including UAN, urea, and DEF, with the fertilizer products aimed at the U.S. Cornbelt. Intermediate products would include anhydrous ammonia and nitric acid. Although the project has not yet reached the ground-breaking stage, current plans call for the facility to start production in 2018. Indiana’s Posey County approved a $1.3 billion federal disaster loan to the project in 2013 (GM June 24, 2013, p. 1).