TCI Plastics is expanding its petrochemicals bagging operation at the Port of New Orleans to more than triple the facility’s annual capacity to 68,000 20-foot-equivalent units of containers.
The expansion will increase the port’s containerized exports by almost 15 percent, said Christian Jensen, president of TCI. The company is a division of New Orleans-based Jensen Companies, whose other operations include drayage and warehousing.
TCI is investing $36.5 million in the 500,000-square-foot facility on 32 acres purchased from the port near the former France Road terminal on the city’s Industrial Canal. The facility is scheduled to open in the third quarter of 2016.
The expansion will provide TCI with a total of 60 acres at its primary site. The company’s existing France Road facility opened in 2011 for bagging and containerizing rail shipments of PVC powder. The new facility will handle polyethylene pellets.
TCI also leases more than 150,000 square feet for resin bagging and warehousing at the Gov. Nicholls Street Wharf on the Mississippi River, a location that provides access to breakbulk vessels.
Petrochemical manufacturing on the Gulf Coast is benefiting from low natural-gas prices that have reduced costs for fuel and feedstocks. More than $20 billion in petrochemical expansions have been announced along the river between New Orleans and Baton Rouge. Much of the resulting petrochemical production will be exported.
Jensen said capacity at TCI’s existing operation, which can bag and export up to 22,000 TEUs a year, is “close to sold out.” He said the region’s petrochemicals boom is expected to generate increased export traffic for years to come.
TCI’s expansion will provide 46,000 TEUs of additional annual capacity for packaging of PVC resin and polyethylene, and will add the capability to produce plastic film for packaging the products.
Much of the region’s current production moves through Houston. Jensen said New Orleans has an opportunity to seize some of that traffic through proximity to Louisiana plants and competitive costs.
Louisiana producers qualify for a $5-per-ton state income tax credit on containerized and breakbulk exports. The credits are based on new cargo or increases over a company’s 2013 export volume.
TCI’s France Road operation has a local road weight permit allowing movement of containers loaded with up to 56,000 pounds, which Jensen said can reduce shipping costs by 12 to 15 percent. The gross truck weight limit under the permit is 95,000 pounds.
The site has access to the New Orleans Public Belt Railroad, which connects with the port’s six Class 1 railroads. The State of Louisiana provided an $800,000 grant to offset the costs of building a rail spur to link the new facility with the switching railroad.