generic construction transportation

An animal feed additives producer will not be investing millions into the Crossroads after all.

Friday, Scott Hine, the vice president of products and solutions at Novus International, said Novus will not build a plant on the Ineos Nitriles property along SH 185 south of Bloomington.

In November 2017, Novus said it would invest $360 million in that plant and employ up to 600 people during its peak construction.

Hine said Novus had not yet bought the land on which the plant would sit, but it has eliminated 13 positions associated with the building of the plant. He said “an unprecedented level of facilities being constructed in the natural gas and petrochemical plastics industries” was partly to blame for the cancellation.

“A recent spike in engineering, procurement and construction costs in the Gulf Coast region had increased to such a level that it affected the project’s cost estimate, making it uneconomical to proceed as planned,” he said.

The producer price index for new, nonresidential building construction, which is an estimate of what contractors would charge a company like Novus to build a plant, increased by 6.2 percent from November 2017 to March 2019, said Ken Simonson, chief economist at the Associated General Contractors of America.

Simonson said another relevant metric is the producer price index for materials and services for construction and that increased by 5.4 percent during the same time period.

“There was a considerable increase in costs for construction in the first half of 2018 partly due to the imposition of steel and aluminum tariffs but also because oil and diesel fuel prices were going up. In recent months, those prices have backed off somewhat, but the bid prices that the project owner might have received could have reflected that earlier run up in costs,” Simonson said.

Dale Fowler, president of the Victoria Economic Development Corporation, said he was disappointed.

“But what I generally do in these kinds of situations, is make sure that we leave the company with the best possible impression of our community, because this probably won’t be their last project and they could even be an ally even for us for future ventures,” Fowler said.

Hine said Novus is walking away with a good impression of Calhoun and Victoria counties.

“Novus officials cannot say enough positive things about the communities’ support and enthusiasm for this project,” he said.

Jessica Priest reports on the environment and Calhoun County for the Victoria Advocate. She may be reached at jpriest@vicad.com or 361-580-6521.

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Former Environment/Investigations Reporter

Jessica Priest worked for the Victoria Advocate from August 2012-September 2019, first as the courts reporter and then as the environment/investigations reporter. Read her work now at www.jessicapriest.me.

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