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Web posted
Sunday, January 2, 2005
Agrium started impact study of plant closure in 2003
By Mark Quiner
Morris News Service-Alaska/Peninsula Clarion
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Agrium Inc. says it will close its Nikiski fertilizer plant in November. A report commissioned by the company that was finished in April detailed the plant's impact on the community. Among the findings in the study was the conclusion that through direct and indirect employment, the plant accounted for a combined payroll of $35 million in 2003.
FILE PHOTO/Courtesy of Agrium
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Anticipating a possible shutdown, Agrium Inc. contracted a consulting firm to prepare a study of the economic impact of closing down its North Kenai fertilizer plant in December 2003, company spokesperson Lisa Parker said Dec. 23. The report was completed in April 2004.
The report, by Anchorage-based consulting firm the McDowell Group, was meant to help prepare the community for a closure, Parker said, adding it was done after seeing indications the plant may have to close.
After settling a lawsuit with Unocal Corp., Agrium's major natural gas supplier, Agrium announced last week it would shut down the North Kenai plant due to lack of an economical gas supply.
The 2004 McDowell report showed the following:
In 2003 Agrium employed 264 workers directly. Indirectly, 317 jobs were impacted by the company's operations on the Kenai Peninsula amounting to a combined payroll total of $35 million. Now, Agrium employs 230 people.
Total revenues paid to the Kenai Peninsula Borough in 2003 based on direct and indirect tax revenue was $3.5 million.
Agrium school-age dependents accounted for $1.1 million in state revenue to the school district.
The company donated $194,740 to local organizations in 2003.
On a state level, the McDowell report said Agrium spent $77 million on goods and services provided by almost 400 Alaska companies in 2003. The total economic output in Alaska related to Agrium operations was $374 million in 2003, the report said. Based on the 230 employees currently employed at Agrium and statewide multipliers, the report said Agrium's closure could result in a loss of 600 jobs and $36 million in payroll statewide.
Parker said the report was not a public document and company officials distributed it as they saw fit. She said a copy was provided to the governor at a meeting and copies were also given to some local officials. She did not recall who.
In coming weeks, more copies of the report will be distributed to the community, Parker said.
Kenai Peninsula Borough Mayor Dale Bagley, Kenai Mayor Pat Porter and Bill Popp, oil and gas liaison for the borough, said they had not received copies of the report.
Popp said he was given a one-page summary of Agrium's impact on the community, adding the borough has been aware of the plant's impact on the community for several years.
"We have been working diligently to promote new natural gas exploration and development," Popp said. He said the borough has been aware of Agrium's impact locally for several years.
Former Kenai Mayor John Williams said he saw the report and was not surprised by its findings.
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