eep in the heart of Louisiana's chemical manufacturing complex, poultry fats and greases will soon be converted to ultra-clean diesel fuel. Dynamic Fuels, a joint venture between Tulsa-based synthetic fuel specialist Syntroleum and Tyson Foods, is now more than halfway through the construction process at its Geismar, La., site.
      Syntroleum, which has developed a process to convert gas to liquids, looked at more than 50 sites in six states before picking Geismar, an area on the Mississippi River south of Baton Rouge.
      "Good infrastructure was the driver for us," says Jim Bigger, senior vice president, business development for Syntroleum, and chairman of Dynamic Fuels. "We consume hydrogen, and we were looking for an existing hydrogen infrastructure and an area with a history and legacy of chemical operations."
      Syntroleum found that infrastructure within the Lion Copolymer complex on a site where Lion shut down a unit a couple of years ago. Construction on the Dynamic Fuels facility will be completed near the end of 2009. When it comes online in mid-2010, it will convert 550 million pounds of animal fats and used cooking oil into 75 million gallons of clean diesel annually. Syntroleum and Tyson, through its Renewable Energy division, are investing $150 million in the project. The plant will employ about 45.
      Bigger says being close to the Mississippi and to dock facilities is another advantage of the Geismar site. Tax equalization benefits offered by the State of Louisiana were another factor in the site decision.
      Syntroleum has 160 issued and pending patents and is involved in the biomass-to-liquids (BTL), gas-to-liquids (GTL), and coal-to-liquids (CTL) industries.
      Tyson, the world's largest producer and manufacturer of chicken, beef and pork, produces large by-product volumes of various grades of animal fats and greases which will be used as renewable feedstock for Dynamic Fuels. The fuel produced at the plant will meet all the requirements of jet fuel, and commercial applications will be the same as petroleum-based diesel fuel.       Geismar is also the site of an expansion by BASF, which is building a new plant for the production of methylamines. The plant, due to open in 2011, will create about 11 new jobs. Materials produced at the plant will be used in water and gas treatment, as cleaning agents, pharmaceuticals and crop protectants.
      SNF Holding, a subsidiary of French firm SNF Floerger, announced in June 2009 that it will build a $350-million water soluble polymers manufacturing facility in Iberville Parish. The company is now in the process of securing regulatory permits and is hopeful of a first quarter 2010 startup. SNF says the facility may eventually employ 500, plus 100 contractors.
      The plant will be located on an 800-acre (324-hectare) site just south of Plaquemine. SNF says the need for the facility is driven by increased demand for its products in enhanced oil recovery. An economic impact analysis by Louisiana State University suggests that the SNF facility will provide an injection of more than $3.7 billion in new state economic output from 2010 to 2025.       The recession has hit the chemical industry hard, as it is heavily dependent on other sectors such as housing and automotives. Based on a poll of its members, the Louisiana Chemical Association estimates the state's industry could lose 700 to 1,200 jobs by the end of 2010. The LCA represents 62 chemical companies operating at 100 locations with about 24,000 employees. The state ranks second in chemical output behind Texas.
      "A car is a chemical plant on wheels and a house is a chemical plant on a slab," says Dan Borné, president of the LCA. "When you have problems in those two areas, problems back up into chemical manufacturing."
      While there may be hints of the end of the recession in some sectors, Borné says don't look for a robust recovery in the chemical sector.
      "We anticipate more of a U-type recovery instead of a V-type recovery, he says.
      A recent report issued by Deloitte Touche Tohmatsu's Global Manufacturing Industry Group says chemical manufacturers are using flexible planning strategies to forecast supply and demand following a more-than-10-percent decline in production in the first half of 2009. Deloitte says while demand is expected to regain momentum, it is unlikely to soon return to pre-recession levels.
      Darin Beulow, a principal with Deloitte Consulting's Strategy and Operations Practice, says many chemical manufacturers are faced with unused assets and are going through a rationalization exercise to consolidate lines, move operations and close some factories. He describes it as a rebalancing of the industry.
      "There's a lot of overcapacity in the industry, with plants across the value chain not running at 100-percent capacity," Beulow says. The chemical sector is evaluating issues such as centralized versus decentralized manufacturing, and whether insourcing or outsourcing products is the best way to go, he says.