Project could infuse more than $1.3B in St. Charles Parish economy
If the Monsanto board approves the move in January, the company’s Luling site will get a $1 billion upgrade to make the herbicide, dicamba.
“Luling was chosen because of the strong partnership Monsanto and the community have today, as well as the proven ability of the site to produce crop protection products for farmers at the highest standards of safety,” said John Combest, media communications manager of Monsanto’s crop protection and applications. “Luling is also perfectly positioned for distribution of crop protection products to farmers in both North and South America.”
Monsanto first discussed the project in January in its earnings call, Combest said. Company executives were considering whether to outsource production or build internally, which led to talks about retrofitting its existing Luling facility. The plant currently making the company’s flagship product glyphosate, better known as Roundup. With the expansion, the plant would make both products.
Dicamba is the sixth most used herbicide in the U.S. and has been in use more than 50 years, Combest said. More than 10 companies sell 40-plus products containing dicamba, which is produced in the U.S. and globally. The herbicide is used in lawn-care products like Weed-B-Gone.
The Luling site is 1,500 acres. Of that amount, 550 acres have been developed for industrial use.
“The production of dicamba at Luling would play an important role in helping farmers have better harvests and meet the growing demand for food,” Combest said.
The Roundup Ready Xtend Crop System is Monsanto’s new dicamba- and glyphosate-based system, he said.
“Today’s dicamba market production capacity is less than a fourth of that 200 million acre opportunity,” Combest added.Plans are to begin work in 2016, and the expansion could take up to five years to complete. The upgrade will be mostly internal so changes will not be outwardly visible to the public.
“The project is not expected to be done in phases at this time,” Combest said. “If approved in January, it is expected to be all in a single phase.”
Corey Faucheux, director of Economic Development and Tourism in St. Charles Parish, said the $1 billion investment could yield more than $300 million of additional economic activity over a 10-year period or generate more than $1.3 billion in that time in economic impact.
“It is definitely not a done deal where we know for sure this project will happen, but it’s a very positive step in the right direction,” Faucheux said.
Last Wednesday, Monsanto President and Chief Operating Officer Brett Begemann announced the company’s decision to begin its preliminary investment in expanding its St. Charles Parish operations in Luling.
“Our Luling facility is a logical site uniquely positioned at the center of Monsanto’s manufacturing network, with convenient access across the Americas where the Roundup Ready Xtend Crop System has a fit,” Begemann said. “The state’s highly skilled workforce and business-friendly environment also put Louisiana at the top of our list for this potential expansion.”
In addition to retaining 645 jobs at the site, the project would create 95 new direct jobs. The salary for the direct jobs would average $76,500 a year.
The Louisiana Economic Development (LED) estimates the project could create an additional 450 indirect jobs, totaling more than 540 new jobs. Monsanto estimates construction could generate 1,000 construction jobs at peak building activity.
“We are pleased that Monsanto is considering an expansion in St. Charles Parish,” said Parish President V.J. St. Pierre Jr. “We pride ourselves on having an excellent working relationship with industry in the area, and we welcome the jobs and economic growth that this endeavor would bring to our parish.”
According to LED, the production of branded crop protection products, including the active ingredient dicamba at Monsanto’s Luling site, is expected to play an important role in helping farmers produce better harvests and meet the global demand for food.
Monsanto’s expansion would be the latest of recent projects at its St. Charles Parish operations. In March 2010, the Luling site got a $196 million expansion that created 26 direct jobs and an estimated 166 indirect jobs. In the past five years, Air Products and Hexion built production facilities at the Luling site to supply raw materials to Monsanto operations.
Gov. Bobby Jindal and Begemann announced Monsanto’s planned expansion.
“Monsanto has pursued a successful strategy of growth, diversification and sustainability in its production of agricultural products in our state,” Jindal said. “We’re proud that this global leader in agriculture has chosen Louisiana over other states and nations for this potential project. Monsanto’s selection of Louisiana speaks to the company’s confidence in our state as an outstanding business climate.”
LED began formal discussions about the project with Monsanto in March.
To secure the project, the state of Louisiana offered Monsanto a performance-based Modernization Tax Credit of $5 million, along with a performance-based $1.7 million Economic Development Award Program grant to reimburse rail and electrical infrastructure costs associated with the expansion, according to LED.
The company also would receive LED FastStart – the nation’s state workforce development program. In addition, Monsanto is expected to utilize Louisiana’s Quality Jobs and Industrial Tax Exemption programs.