MANLY | After more than 17 months in the making, New Heaven Chemicals is almost ready to begin production at the Manly Terminal.
The plant was a hive of activity this past week as approximately 40 contractors strove to bring the plant to working order.
Officials plan to begin production of sodium methylate, a catalyst in biofuel, by Feb. 1. The fully-automated plant will produce 24,000 metric tons of the liquid chemical per year.
New Heaven Chemicals in Manly is a subsidiary of India-based TSS Group. It is the company's second plant in the world, but its first in the United States.
TSS Group had been supplying sodium methylate to customers around the world, including in North Iowa, through its plant in Dammam, Saudi Arabia.
"We decided to stop bringing it from outside," said New Heaven Chemicals Director Prasad Devineni. "And, Iowa being one of the biggest biodiesel producing states, it made perfect sense to look at a plant right here."
Manly was an especially attractive site for TSS Group because the main component of sodium methylate, methanol, is already stored at the Manly Terminal. Many biodiesel plants are also located in northern Iowa.
"Within 100 miles we have about 15 biodiesel companies and we can sell out completely, 100 percent production, within 100 miles," Devineni said.
Demand for sodium methylate is so strong TSS Group decided during construction to reconfigure the original plans for the New Heaven Chemicals plant in order to increase the facility's production capability.
The initial plan had been to produce 12,000 metric tons per year, but the company is now building a plant capable of producing 24,000 metric tons per year.
The decision to increase capacity delayed completion of the plant, which was initially slated to open at the end of last year.
Capital investment for the first phase is estimated at $15 million. Officials estimated the facility will generate gross revenues of $15-$20 million.
The company was able to get multiple economic development incentives to come to Manly.
The Iowa Economic Development Authority gave New Heaven Chemicals a package with $128,000 in loans and $402,000 in tax incentives. Half of the loans don't have to be repaid if New Heaven meets terms of the contract, including a requirement that it create 16 jobs paying at least $14.79 an hour.
In July 2014, the Worth County Board of Supervisors approved $30,000 in cash incentives and a five-year tax increment financing (TIF) rebate of 100 percent.
New Heaven Chemicals is hiring now. It wants to have the positions filled in the coming weeks.
Devineni credited Winn-Worth-Betco for believing in TSS Group's vision to build a plant in North Iowa.
Although staff at the economic development agency had questions, they quickly saw that Manly provided a strategically beneficial location for the company, said Winn-Worth-Betco Director Teresa Nicholson.
"We had questions about why here and why that worked for them, and just like (Devineni) said, it had to do with the proximity to the market and the biodiesel industry," she said. "The products they produce here can be delivered within 100 miles and used within that 100 miles, so we were very happy that they chose our location."