Business

Iowa Fertilizer Co. starts production in Lee County

Project has been in the works for five years

This aerial image shows Iowa Fertilizer Co.'s fertilizer plant in Wever, Iowa. The plant officially opened for productio
This aerial image shows Iowa Fertilizer Co.’s fertilizer plant in Wever, Iowa. The plant officially opened for production on Wednesday April 19, 2017. (Iowa Fertilizer Co.)
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A multibillion-dollar fertilizer plant in southeast Iowa is open and has started production five years after it was announced.

Iowa Fertilizer Co. said Wednesday it has finished construction and begun production at the plant in Wever, a town in Lee County. Gov. Terry Branstad, Lt. Gov. Kim Reynolds and local officials, joined company leaders for the ribbon-cutting.

Nassef Sawiris, CEO of OCI N.V., the Netherlands-based parent company of Iowa Fertilizer, hailed the project as a “transformative moment for the agricultural industry.”

The company spent more than $3 billion to build the plant, making it one of the largest private sector economic development projects in Iowa.

The plant is expected to produce between 1.5 billion and 2 billion tons of nitrogen fertilizer products a year, according to a fact sheet. Construction employed more than 3,500 workers while the plant currently has 200 full-time employees.

Debate swirled around the project since it began, often revolving around the number of incentives provided to Iowa Fertilizer and whether the project was worth the cost.

Proponents, including Branstad, touted the fertilizer plant as a win for Iowa and a major boost for Lee County. The county historically has had one of the highest unemployment rates in the state. He followed that same argument when celebrating the plant’s opening Wednesday.

“At the outset of the Iowa Fertilizer project, the unemployment rate in Lee County was the highest in the state at 8 percent,” Branstad said in a statement. “That is why my administration fought so hard to encourage the company to locate its new fertilizer plant in this great community.”

Lee County’s unemployment rate was 5.3 percent in February.

Critics, however, contended the state got a bad deal. On Wednesday, State Sen. Joe Bolkcom, D-Iowa City, said the announcement was good news for the plant’s workers, but also said Branstad and Reynolds “were snookered on this deal.”

“I hope this insanely excessive deal remains the worst Iowa economic development deal for a long, long time. It is the most extreme example of the failed Branstad/Reynolds approach to economic development, a strategy that has busted Iowa’s state budget and will limit Iowa’s growth for years to come,” he said in an emailed statement.

Federal, state and local officials provided more than $500 million in various incentives to Iowa Fertilizer Co. and its parent company. Those incentives include more than $130 million in tax abatements from Lee County, $107.5 million in tax credits from the Iowa Economic Development Authority, a $1.6 million grant from the Iowa Department of Transportation, and access to a federal disaster bond program that was estimated to save the company around $300 million.

When the project broke ground in late 2012, it was expected to be complete by fall 2015. Delays from weather and then the firing of a main contractor pushed back construction, the Burlington Hawk Eye and other outlets reported.

Lawsuits surfaced in 2016, claiming Iowa Fertilizer failed to make payments on some work. Iowa Fertilizer responded, saying the suing contractor performed defective work at the plant.

The plant also was up for sale at one point as Iowa Fertilizer’s parent company explored a merger with another company. That deal did not go through, however.

l Comments: (319) 398-8366; matthew.patane@thegazette.com

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