Ascend Performance Materials is considering a $175.7 million expansion at its Decatur plant that Mayor Tab Bowling said would "stabilize" the company's position here.
The company has requested the Decatur Industrial Development Board approve a $4.14 million tax abatement that would be used if the project goes forward.
The plant, located in Decatur's police jurisdiction, is competing for the expansion project with the company's 2,000-acre facility in Chocolate Bayou, Texas, and possibly a site outside of the United States. The abatement is divided over 10 years.
The IDB has scheduled a meeting for 10 a.m. today to consider Ascend’s abatement request and OCI Alabama LLC’s request for an amendment to an abatement approved in July.
Jeremy Nails, president of the Morgan County Economic Development Association, said Tuesday a final decision on Ascend's project has not been made, “but any expansion incentive by the IDB would help the Ascend management look favorably on Decatur.”
IDB attorney Barney Lovelace said it’s not unusual for a company to make an abatement request when a project is in competition with other locations.
“An abatement is intended as an inducement,” Lovelace said. “We have granted abatements in the past for projects that never materialized.”
Lovelace said a major part of the proposal is, if the Decatur plant wins the project, it could lay the groundwork for future expansions and enhance the plant's long-term outlook.
This would be big news for the plant that was in bankruptcy 10 years ago. It began in Decatur in 1952 as Chemstrand. At its high point in the late 1960s, the plant under the Monsanto name employed about 3,000.
In 1997, the plant was spun off as Solutia. By 2002 the facility was operating at 75 percent to 80 percent capacity. Then, in 2003, the company laid off about 180 employees, dropping to about 800 total workers.
Solutia filed for Chapter 11 bankruptcy protection in 2003. It cited heavy financial obligations caused by the spinoff from Monsanto.
A private investment firm bought Solutia’s nylon-production facilities out of bankruptcy in 2009, renamed it Ascend Performance Materials and invested $6.5 million in machinery and equipment in the facility.
“This would be big news (if chosen) because it would continue to stabilize the Decatur plant,” Bowling said. “And (it) comes just after Daikin announced a $195 million expansion last month. That’s encouraging, and I think there’s more to come very soon.”
Ascend’s investment would include the addition of three cogeneration units as well as related capital and infrastructure to support growth in production of adiponitrile and hexamethylenenediamine, both used to make nylon salts, and special chemicals growth.
The project is expected to add 10 high-end manufacturing jobs with an average salary of $100,000 per year, not including benefits. Ascend now employs more than 300 workers in Morgan County, according to IDB records.
An Ascend spokesperson could not be reached for comment.
On July 11, OCI Alabama says, it underestimated the cost of a second process line within the existing process building so it is asking that the IDB increase its abatement for non-education property taxes from $105,250 over 10 years to $163,350. The company requested the abatement for state and city taxes related to construction be increased from $115,600 to $177,780.
The cost has risen from $3.5 million to $5.25 million for a line that will supply additional product volume, backup production, and research and development capability, the company says.
OCI is a chemical manufacturer that makes sodium percarbonate, a dry bleach used in consumer products such as laundry detergent, laundry bleach and auto-dishwashing applications.
The original petition estimated the cost of the new buildings would be $939,893, and now it’s estimated to cost $1.7 million. The cost of the machinery and equipment was estimated at $2.6 million, and it increased to $3.54 million.