Agrium USA Inc. has announced plans to close its Nikiski fertilizer plant later this year.
File photo by M. Scott Moon
Agrium announced that it will shut down its North Kenai fertilizer plant Oct. 31 because it is not able to secure a cheap supply of natural gas. The company said 230 jobs will be lost with salaries averaging $80,000.
Agrium announced in a press release issued last year that it settled a lawsuit with Unocal Corp., its natural gas supplier. Unocal was the previous owner of the fertilizer plant.
When it was sold to Agrium, Unocal agreed to supply gas to the plant through June 2009. The settlement guaranteed a supply of gas through Oct. 31.
Gas is a key ingredient in the production of fertilizer.
Agrium started as Colliers Chemical and Pumping in 1968 and has been a major employer on the Kenai Peninsula since.
Last year Agrium contracted Anchorage-based consulting firm McDowell Group to study the economic impacts of closing the plant. According the report, in 2003, the company paid $22 million in payroll.
The same year, its operations accounted for $3.5 million in revenue to the Kenai Peninsula Borough.
According to the borough, Agrium provided about $1.57 million in property taxes in 2004.
The plant's shutdown is being done with the idea that it will not be restarted, said Jim Senn, business support manager for the North Kenai plant. He said the company is open to all commercial options.
Lisa Parker, spokesperson for Agrium, said the company is working on a dismantlement plan.
At a Soldotna Chamber of Commerce luncheon Jan. 4, questions were raised about the valuation of the plant. Senn said it is difficult to put a value on property that has no life.
Parker said the company is in discussions with the borough regarding the assessment of the property. No further details were available.
Gov. Frank Murkowski named a task force to assist Agrium employees and to explore ways to spur economic development in the Cook Inlet basin.
The group has representation from public officials at the state and local level, as well as representatives from the private sector.
Agrium said they plan to hire a consultant to help employees with job searching tools such as writing resumes, interviewing and job placement.
Employees have started a volunteer committee called Special Help in Transition. They are focusing on the first reduction in work force at the plant.
Information about employment opportunities is being compiled and put in each of the plants, said Agrium employee Mark Schams.
The committee also is about to conduct a survey of the employees to determine their needs, he said.
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