Baton Rouge and Memphis know how to be river cities. by ADAM BRUNS adam.bruns bounce@conway.com

Formosa Plastics is investing $100 million in a Baton Rouge plant expansion.

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n the two years stretching from November 2004 through October 2006, the Conway Data New Plant Database has tracked 143 projects worth nearly US$7.5 billion in the counties abutting the Mississippi River from its confluence with the Ohio River down to the Gulf of Mexico.
   Tennessee counties, led by Shelby County and the Memphis MSA led all comers during that span with 79 projects, followed by Louisiana with 39 and Mississippi with 18 projects – 15 of them in the Memphis-area county of DeSoto.
   A full 23 of Louisiana's 39 projects in that time span occurred in neighboring Iberville and East Baton Rouge parishes, where chemical and petrochemical projects are once again descending on a region long known for the industry.
   The Baton Rouge MSA has endured the crush of people descending on the community after the 2005 hurricanes by responding with a crush of new corporate projects. They've included Marathon's $3.2-billion refinery expansion in Garyville, ExxonMobil's $139-million refinery expansion in Baton Rouge proper, growth by Dow and Shintech in Plaquemines, BASF and Huntsman in Geismar and Georgia-Pacific's $37-million expansion in Port Hudson.
   Another in that family is a $100-million expansion of Formosa Plastics' vinyl resin plant in Baton Rouge. The project comes as the company also expands capacity in Point Comfort, Texas, with a $1.1-billion expansion at its PVC complex there.
   The Baton Rouge project was announced in October, after the firm was swayed by federal Gulf Opportunity Zone incentives from choosing Texas for this project as well, according to Michael Olivier, Louisiana's secretary of economic development. The project will add few if any jobs to the plant's payroll of 290, but will create 300 temporary construction jobs.
   A targeted industries assessment conducted for the Baton Rouge Area Chamber by Competitive Strategies Group and partner McCallum Sweeney in summer 2006 found that the area has strong scores for manufacturing work force and transportation infrastructure. Scores are mixes across the region for average wages, education attainment and labor posture. And the scores come in weak for air quality attainment, with non-attainment status for five of nine parishes for air pollutants because of ozone.
   That said, what Baton Rouge has attained is recognition as a hub city with solid transportation infrastructure across all modes – which will get even more solid with the completion of the La. Highway 10 bridge, said the report. In addition, "the region's cost of living and operating costs are still considerably below the national average and often times lower than other peer regions throughout the United States," the report read.
   Holding back industrial development, however, is a mix of findings:

   • Four of the top ten districts for public education are in the metro area, but four of the six lowest-ranked are also there.
   • While average wages are very competitive across the board, the petrochemical industry has driven manufacturing wages to a high level.
   • There are plenty of industrial sites in total, but East Baton Rouge Parish needs more, and the whole area needs more fully served industrial parks.
   • While lack of public-sector sewer system service has not been an impediment to petrochemical operations, it "will be perceived as a negative issue for other industrial prospects."

   Weighing all factors, Competitive Strategies Group recommends that the Baton Rouge metro pursue warehousing and distribution; construction products manufacturing; shared service centers and regional headquarters for the FIRE sector (financial services, insurance and real estate); life sciences; and such emerging opportunities as video and film production, video game development and downstream petrochemical niches.
   The consultant sees the region's huge needs in construction as a key theme uniting several of those sectors, with products related to building possibly emerging from the petrochemical industry, and logistics centers that would support the distribution of such products.

Nuclear Power Likes the River Too    In October 2006, Entergy Nuclear announced it had selected Kansas City-based engineering, consulting and construction firm Black & Veatch to assist with its applications to the Nuclear Regulatory Commission for a combined construction and operating license for a possible new nuclear unit to be located adjacent to Entergy Gulf States' River Bend nuclear generating facility near St. Francisville, La., just north of Baton Rouge along the Mississippi River. Entergy's application to the NRC is now scheduled for submittal in early 2008. A license could be approved by the NRC in 2010 or 2011.    "At that time, Entergy could make a decision to build, based on a number of factors, including an assessment of its customers' need for additional power after 2014, the estimated cost and construction schedule of the advanced nuclear energy plant, the future cost of power from the plant, interest rates at that time, and projected cost of other fuel choices such as natural gas," read an Entergy press release. "Involvement of other regulatory agencies including the Louisiana Public Service Commission would be factored into the decision framework and timeline."    Among other factors are other projects: Entergy is on track to receive the first early site permit in the nation from the NRC possibly as early as fourth quarter of 2006 or in the first quarter of 2007, qualifying the site of its Grand Gulf Nuclear Station near Port Gibson, Miss., as acceptable for a new nuclear unit. That complex is also located along the Mississippi River. In addition, NuStart Energy Development, LLC, a consortium of 12 nuclear companies including Entergy, has selected Grand Gulf as one of two plant sites it will use to prepare applications for some of the first construction and operating licenses from the NRC for a new nuclear energy plant in 30 years.