Five years later, fertilizer project still searching for investment
When plans for the Northern Plains Nitrogen fertilizer plant were announced in May 2013, its backers were full of optimism. During an event to unveil the project, there was talk of a 2,000-person corps of construction workers, a staff of 135 and ...
When plans for the Northern Plains Nitrogen fertilizer plant were announced in May 2013, its backers were full of optimism.
During an event to unveil the project, there was talk of a 2,000-person corps of construction workers, a staff of 135 and even a wisecrack about the smell of money emanating from the plant. Its completion has been spoken of as a transformative event for Grand Forks - if only the right investors would back it.
Nowadays, the years are beginning to add up, and a search for investors for the $2 billion-plus project wears on.
"We raised a bunch of seed money to get things going, and we used it as frugally as we can, and right now we've put a lid on every possible expense," Don Pottinger, project CEO, said last week in a phone interview. "Many of us on the project are working for nothing, because we think it's the right thing to do."
The project site northwest of Grand Forks has stayed quiet, but Pottinger said a dedicated team is still working hard to make the plant happen. He insists that the vision for the plant is "alive and well." The project is up to date with certifications and licenses, and the search for investors continues - and yet.
"It's been five years - it's going on six since the effort began - so we're definitely not where we thought we'd be, because we thought we'd have a plant by now," Pottinger said.
The plant has been much-anticipated because of its potential boon for the local economy, bringing a jobs and development to the city. But as recently as January 2017 - when project leaders had once hoped to see construction in its final phase - Pottinger said falling fertilizer prices had made the plant a less attractive option for backers.
The waiting has left some leaders looking for ways to jump-start the project. In April 2017, Grand Forks City Council member Bret Weber suggested the state could step in to finance the project, relying on its oil-funded Legacy Fund, in a move similar to its creation of the State Mill and Elevator and the Bank of North Dakota.
Pottinger last week shied away from that option. State and city leaders have already been "very, very supportive" of the "monstrous project." He said Weber's suggestion would make for an "onerous request."
Kevin Skunes, a farmer in the Arthur, N.D., area and the president of the National Corn Growers Association, points to low commodity prices to help explain the project's woes. He sees some investors feeling more bearish about the project with some commodities, like corn, still in a slump compared with their 2013 prices.
But for some, the math doesn't add up. Larry Hoffman is a member of the Board of Directors for the North Dakota Corn Growers Association as well as a board member for the plant project. He said he struggles to see why investors would hesitate to corner the market in a region that he said can use more of the product.
"Those of us who are farmers on the board, that's the biggest question mark we have," he said. "We feel that the opportunity for a plant in this area, supplying this product, is a win-win situation. We just can't find investors. We've had people looking for them all the time."
Pottinger said that, at times, the leadership team for the plant has considered "other opportunities for sizing," an apparent reference to a less ambitious vision more palatable to investors. But, he said, the scale of the project is already so large that it will take a good deal of capital regardless.
"Once you start having nine zeroes after a number, it's a big project," he said.