Agrium says it's closing

Spokesperson: Plant plans to shut doors in November

Posted: Thursday, December 23, 2004

Agrium will close its North Kenai plant Nov. 1, leaving 230 people jobless, Lisa Parker, spokesperson for Agrium, said Wednesday.

The lost jobs amount to $20 million in wages, Parker said.

She said while Agrium will go forward with meetings next month aimed at finding alternative gas sources, the plant's closure is imminent.

"We're not having success," she said.

Agrium announced in a press release Dec. 14 that it settled a lawsuit with Unocal Corp., their natural gas supplier, guaranteeing a natural gas supply at their current price through Oct. 31. Unless alternative economic gas supplies are found, the release said the plant will close the following month.

News of the certain closure shocked Kenai Peninsula Borough and state officials.

Bill Popp, oil and gas liaison for the borough, said Agrium's initial announcement led him to believe that the closure was not certain and they were going to continue to explore other options.

"They (Agrium) are in the driver's seat in terms of the decisions they have to make," he said.

The borough will have to respond accordingly, Popp said. The nature of the response has not yet been determined because the information is so new, he said.

Nothing has changed since the initial press release was issued, it was just a difference in understanding said Richard Downey, director of investor and media relations for Agrium.

Options will continue to be explored to keep the plant open, but it is extremely unlikely, barring an immediate and extraordinary circumstance, he said.

Parker said the plant had been talking about the need to get natural gas for years to keep the plant running.

"I don't think people took it seriously," she said.

There were different proposals in Juneau, such as tax credits to provide incentives for companies to explore. She said the state and community could have looked at alternative energies such as coal.

Borough Mayor Dale Bagley said it was never clear what Agrium wanted the borough to do.

"This is a business decision," he said.

The company is working on preparing severance packages for the employees and has hired job counselors to work with them on finding new jobs, Parker said. In addition, she said a job fair will be held for the employees.

Anticipating the closure, the union is working with the company to extend the union contract - which is scheduled to expire March 31 - until the plant's closure, said Allen Wallis, Kenai unit president for PACE Local No. 8369.

Gov. Frank Murkowski's office is still putting together a task force to examine the issue, said Mike Chambers, press spokesperson for the governor. The task force will be appointed by the beginning of January, Chambers said.

"We hope to have a community-driven solution to this problem," he said, adding that Agrium will be offered a spot on that task force.

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