Koch Methanol Acquires Majority Ownership Stake In St. James Parish Methanol Joint Venture

AUGUST 23, 2019

Houston, TX – Koch Methanol Investments, LLC (Koch Methanol) and Yuhuang Chemical Industries Inc. (YCI), a wholly owned subsidiary of Shandong Yuhuang Chemical Company, have recapitalized YCI Methanol One, LLC (the “Joint Venture”). As a result of this transaction, Koch Methanol is the indirect, majority owner and managing member of the Joint Venture. The Joint Venture is currently constructing a $1.85 billion methanol production facility in St. James Parish, LA. “Koch Methanol values the Joint Venture’s leadership team and the hard work being done by its employees, and believes in the significant opportunities being created,” said Jim Sorlie, Vice President of Koch Methanol Investments. “Consequently, Koch Methanol has decided to acquire a larger equity stake in the Joint Venture.” As part of its original investment, affiliates of Koch Methanol received the exclusive methanol offtake rights from the new facility – expected to be as high as 1.7 million metric tons per year – as well as the rights to construct, own, and operate the methanol terminal assets to facilitate the outbound flow of methanol via marine, rail, and truck logistics. In the near term, the Joint Venture is on track for an on-budget Phase I project completion in the 3rd Quarter of 2020. Additionally, the Joint Venture is evaluating an expansion that would more than double the production of methanol at the site. “This is an exciting new step in the project, and Koch Methanol’s increased investment in the Joint Venture shows its confidence in the hard work being done by YCI leadership and Joint Venture staff,” said Charlie Yao, CEO of YCI. “We look forward to continuing our work with Koch Methanol, vendors, and the local community on this important and exciting project.”

About YCI
YCI is building a methanol complex on more than 1,200 acres the Company purchased along River Road, between the Mississippi River and La. 3127, in 2015 and on the former site of the old St. James High School in St. James Parish. Construction of the $1.85 billion complex began in January 2017. Yuhuang Chemical first announced the St. James project in St. James Parish, La. in 2014. http://yci-us.com/

About Koch Methanol, LLC
Koch Methanol, LLC and its affiliates are committed to supplying methanol to a global customer base in a competitive and timely manner. Methanol is used in the manufacturing of countless everyday products, including plywood, carpet, fuels and plastics. Koch Methanol, LLC is a subsidiary of Koch Ag & Energy Solutions, LLC with offices in China, Houston, and Wichita, KS. www.kochmethanol.com


Construction Update: Column lift and installation

Recently, another large piece of equipment was lifted in to place and installed on it’s foundation. Below are a few pictures from the lift and installation of the Atmospheric Column. The column measures roughly 240 feet (73 meters) in height, 30 feet (9.1 meters) in diameter, weighs almost 1.2 million pounds/545 thousand kilograms (600 US tons/545 metric tonnes) and is one of the tallest structures at the site.

Watch for more more updates as construction progresses.

YCI Methanol One CEO attends SelectUSA Investment Summit

Charlie Yao, CEO of YCI Methanol One, recently attended the SelectUSA Investment Summit in Washington, D.C. The SelectUSA Investment Summit brought together business leaders and economic development officials from 79 global markets and 49 U.S. states and territories. More than 3,100 people attended, including 1,200 business representatives such as Mr. Yao.

Terry Brandstad, U.S Ambassador to China, as well as Sarah Kemp, Deputy Under Secretary of Commerce for International Trade, thanked Mr. Yao for his attendance at the summit and both look forward to the further investment and business expansion plans of YCI Methanol One.

SelectUSA Investment Summit certificate

YCI Methanol One selects Infor CloudSuite Solutions for ERP

See Infor Press Release for the full press release.

NEW YORK – May 13, 2019 – Infor, a global leader in business cloud software specialized by industry, today announced that YCI Methanol One, LLC (YCI), a venture between Yuhuang Chemical Industries Inc. (YCII) and Koch Methanol Investments, LLC (Koch Methanol), has selected Infor CloudSuite solutions to run its methanol enterprise.

YCI is currently building a world-scale Mega Methanol® plant, with a nameplate capacity of 1.7 million metric tons per year, located in St James Parish, Louisiana. The project is expected to be in operation by the fourth quarter of 2020. By selecting Infor’s CloudSuite Solutions including Infor M3 Cloud for their ERP along with both CloudSuite EAM and CloudSuite HCM, YCI will be able to optimize the end-to-end operation of its business.

YCI evaluated a number of ERP systems, according to Pat Dennard, YCI’s IT Manager, who was tasked with selecting the ERP system. The start-up state of the business and the growth potential for the plant required a system that was scalable with evolving demand, yet manageable for a small IT staff. Dennard said, “After researching the top ERP solutions available, Infor was determined to be the best fit for our purposes in terms of capability, scalability, and ease of maintenance.”

Louisiana expecting closer collaboration with China

(Full article located here)

YCIM1 construction 

In an interview article from Xinhua News with Don Pierson, secretary of Louisiana Economic Development (LED), Pierson points out that collaboration with China on industrial projects including YCI Methanol One’s plant being constructed currently, is on the rise.

“Louisiana enjoys a positive trade balance with China,” said Don Pierson, secretary of Louisiana Economic Development (LED), detailing the significance of Chinese businesses to his state in a recent interview with Xinhua.

The Bayou State, Louisiana, imports 1.3 billion U.S. dollars a year in goods while exporting 7.9 billion dollars in goods to China, mainly including chemicals, fuels and agricultural products, he said.

Pierson further goes on to say:

Pierson spoke highly of the Chinese companies that are represented in his state as they do not only benefit the regional economy by creating jobs and contributing to local communities, but are also responsible participants regarding safety and security around their facilities.

“They’re doing a great job and we hope to introduce more Chinese companies to Louisiana,” he said, adding that the state’s strategic location for logistics, rich natural resources as well as low cost of feedstock and electricity can help create a favorable environment for foreign businesses.

Shandong Yuhuang Chemical, one of the Chinese companies investing in Lousiana, is constructing a 1.85-billion-dollar methanol production facility in St. James Parish, Louisiana.

Also in the same parish, Wanhua Chemical Group from east China’s Shandong Province plans to invest 1.25 billion dollars to develop a methylene diphenyl diisocyanate complex. The project is set to start construction in 2019 and is expected to go into operation in 2021, according to the latest statement by the company.

In January, Shandong Yuhuang and LED were presented with the Outstanding FDI Partnership Award by the New York-based Chinese General Chamber of Commerce, the largest and most influential non-profit organization representing Chinese enterprises in the United States, with its members exceeding 1,500.
Shandong Yuhuang Chemical is the parent company of YCI Methanol One.

Pierson concludes by saying:
… he was optimistic about a potential trade deal between the two countries as it’s not only desirable from the Chinese side, but also “the desire of the U.S. participants to grow the economy of the U.S., and China is such an important part of that.”
(Full article located here)

Chinese Chamber Honors State of Louisiana, Yuhuang Chemical

State, company receive Outstanding FDI Partnership Award at China General Chamber of Commerce gala

From Louisiana Economic Development

The State of Louisiana and Shandong Yuhuang Chemical Group jointly received an Outstanding FDI Partnership Award on Monday night, with the annual Foreign Direct Investment honor presented by the China General Chamber of Commerce at its 2019 Annual Gala in New York. Louisiana Economic Development Secretary Don Pierson and company executive Charlie Yao accepted the award.

Yao serves as CEO of Yuhuang Chemical Industries Inc., a subsidiary of China-based Shandong Yuhuang Chemical Group Co. Ltd. After selecting Louisiana for a major methanol production complex, Yuhuang Chemical began building a world-scale methanol facility two years ago as part of a $1.85 billion project that ultimately will include three phases. In addition to creating 200 direct jobs with an average annual salary of $85,000, plus benefits, the Yuhuang Chemical project will result in an estimated 1,250 new indirect jobs and will generate 2,100 construction jobs at peak building activity. YCI Methanol One, being completed with joint venture partner Koch Methanol Investments LLC, is the first phase of the project and will include 100 permanent direct jobs after creating 1,500 construction jobs.

Read more about the announcement.


Feature: Chinese enterprise to facilitate regional development in southern U.S. state

From Xinhua News

NEW ORLEANS, the United States, Sept. 3 (Xinhua) — Deep into St. James Parish, southern U.S. state of Louisiana, hundreds of construction workers are busy installing chemical equipment.

Among the vast expanse of sugarcane fields, this site is unique both in its appearance and identity.

Yuhuang Chemical Industries Inc. (YCI), a subsidiary of China’s Shandong Yuhuang Chemical, is constructing a 1.85-billion-dollar methanol production facility here along the Mississippi River.

It is by far the largest Chinese investment in Louisiana’s chemical manufacturing industry.

The YCI began to turn dirt on its 1,300-acre site in January 2017, clearing the way for the first of three construction phases of the methanol plant. The project has entered key phase in construction these days.

“We will gradually place in the majority of the large equipment on foundation, stepping toward assembly stage,” Charlie Yao, CEO of YCI Methanol One, was animated when talking about the recent progress of his venture.

The plant has been hailed by many as a sign of strengthening business ties between China and Louisiana.

“Yuhuang’s methanol project proceeded amid difficulties and challenges. It indicates that China and the United States are highly complementary in economic structure and trade,” said Xu Chen, chairman of the China General Chamber of Commerce-USA (CGCC), which represents more than 1,500 Chinese and U.S. companies. “The project also helps facilitate U.S.-China collaboration.”

The plant is expected to generate approximately 2,000 construction jobs at peak and at least 100 direct permanent jobs during operation.

Ron Gros, a Louisiana local, joined Yuhuang’s methanol project early 2017. With rich working experience in U.S. chemical industry, Gros regarded his debut in the fledging Chinese company as “a good opportunity for his career.”

“It’s been a good working experience to come from the start to watch a chemical plant being built from the ground up,” Gros is also confident about his future advancement.

Yuhuang’s location on the riverfront was “strategic” and “mutually beneficial,” according to Yao, as the facility benefits from the availability of natural gas feedstock and associated infrastructure. Meanwhile, its anchoring brings job opportunities and tax revenues to local communities and helps boost the port industry.

The plant is expected to start commercial production in mid-2020, with a productive capacity of approximately 1.7 million metric tons of methanol per year.

Methanol is used in the manufacturing of countless everyday products, including plywood, carpet, fuels and plastics.

The majority of the methanol produced at the site will be transported by barge and rail to north America, while the rest will be exported to China and Europe by oceangoing vessels, according to the company.

Many foreign companies including those from China are looking to long-term investment in Louisiana and that bodes well for the future of people living in the river parishes, said Paul Aucoin, executive director of the Port of South Louisiana.

Foreign direct investment has become an essential part of economic growth in Louisiana, and China is among the fastest-growing sources of foreign investment in the state, according to local economic development authority.