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January 9, 2014

PotashCorp to continue as major taxpayer in Hamilton

Hamilton County vows to monitor chemical plant shutdown

Jasper — With the recent massive layoff at PotashCorp White Springs and the eventual closure of the Suwannee River Chemical Plant this year, the effects on Hamilton County as a whole should be minimal, according to Public Affairs Manager Mike Williams.

White Springs Agricultural Chemicals, Inc (PotashCorp White Springs) announced Tuesday, Dec. 3, that it will permanently close the Suwannee River Chemical Plant – one of two plants at the White Springs facility – during the second half of this year. Initial closure activities resulted in an immediate reduction of 248 people. Final closure later this year will result in an additional reduction of approximately 100 people; a cumulative reduction of approximately 50 percent from current levels.

Williams stressed that the reduction in force at PotashCorp-White Springs was based upon operational and workforce changes, not only locally, but at all PotashCorp sites. The announcement/rollout of the event was coordinated to be released at all sites simultaneously so that everyone was informed at the same time.

“While this was a difficult decision, it was a business decision, not a personal one, and based upon the continued sustainability of the company during a downturn in the global market,” said Williams. “These reductions should keep White Springs as a strong and viable operation, while adding approximately five years to its lifespan. PotashCorp is here to stay for many more years.”

PotashCorp, he said, will still be a major employer for the county with about 350-400 employees, as well as be a major taxpayer and community contributor.

The 248 personnel impacted by the layoffs so far are as follows: Alachua County-1, Baker County-2, Columbia County-91, Hamilton County-68, Madison County-2, Suwannee County-71, and Echols/Lowndes County, Ga.-13. Of the 248 personnel laid off, 27 percent lived in Hamilton County and 28 percent lived in Suwannee County.

“While this was a significant event for our regional area, it was not focused on any one county,” said Williams.

“At this time, we cannot accurately predict how a partial closing of the PotashCorp plant will affect the assessment of its property in 2014 or future years,” remarked Hamilton County Property Appraiser David Goolsby. “Real and tangible personal property (TPP) values are determined as of January 1 of each year.”

The actual closure date of the Suwannee River Chemical Plant will be sometime during the second half of this year, according to Williams. Some portion of the plant may operate and be in production, based upon demand until that time. 


History

The Suwannee River Chemical Plant (and mine) groundbreaking was Oct. 31, 1964, with a $35 million investment by Armand Hammer, President and CEO of Occidental Petroleum Corporation (Oxy). By today’s standards that investment amount would be somewhere in the range of $255 million.

PotashCorp purchased all outstanding shares of White Springs Agricultural Chemicals Ltd. from Oxy in 1995. They have not only been a significant part of the local economy, but also very active in the local communities for the past 18 years.

“This investment and membership in our local communities will continue,” said Williams.

From 1964 to the present, Suwannee River Chemical Plant was a part of the local economy.

“Our granulation plants, Swift Creek Mine and Mill, and Swift Creek Chemical Plant will continue to be a part of our local economy with hundreds of employees and strong involvement in our communities,” Williams said.

PotashCorp will continue to develop its phosphate resources for use in fertilizers that will be necessary globally, due to population growth and increased agricultural demand. PotashCorp is engaged in the global process of helping to feed the world by providing quality plant and animal feed nutrients.

Williams noted that historically things change over time for many reasons, based upon a myriad of contributing factors. Populations of towns such as White Springs ebb and flow, he said, from a high of around 1,500 to a low of 770.

In Hamilton County the local economy was forestry, timber, naval stores, farming and tourism. The sawmills disappeared, as did the naval stores, and then the interstate highway was completed. Some factors were based upon economy, technology and the marketplace, Williams explained. When the phosphate industry came to Hamilton County in the 1960s it provided a significant boost to the economy, but was not meant to be the sole source of the economy.

“It provides significant tax revenue (approximately 47 percent), which equates to about $1.2 million, based on tons of phosphate severed for economic development and major expenditures in the millions with local vendors,” said Williams. “It has been a source of employment for 50 years ranging from over 2,000 employees at its height to the current hundreds it employs today.”

Things change. The industry changed, automation improved and the manufacturing process was streamlined over the years, noted Williams.

“In today’s business climate, you have to compete in a global marketplace,” Williams explained. “To do so, you must evolve and change with the industry to be successful. PotashCorp is doing that and will continue to be an industry leader because of its ability to evolve over time to meet the challenges of today and the future. As such, PotashCorp will continue to play a significant part in Hamilton County’s economy for years to come.”


Plant closure

Williams said when the Dec. 3 announcement of the Suwannee River Chemical Plant closure hit the streets, a shockwave rippled through the communities.

“There were stories everywhere,” Williams said. “Understandably so. This event reduced the company’s workforce by 18 percent.”

PotashCorp, Williams said, is doing everything possible to assist impacted personnel through this challenging period. Those laid off are drawing pay for 60 days and will receive appropriate severance packages. PotashCorp is also working with North Florida Workforce Board to provide a resource fair to assist them.


Commissioners weigh in

Meanwhile, at the Dec. 17 meeting of the Hamilton County Board of County Commissioners, the mood was still somber as to how this event at PotashCorp will ultimately affect the county. Resident George Roberson expressed concern about clean up measures at Suwannee River Chemical Plant once it is permanently closed. He urged the board to stay on top of it and ensure that any and all chemicals are disposed of properly.

Roberson also said he understood PotashCorp was lagging behind on reclamation efforts. He suggested the board appoint a committee to work with the state to make sure these matters are handled.

Commissioner Randy Ogburn assured Roberson that the county has always and will continue to work closely with PotashCorp to make certain things are handled properly. The county, he said, utilizes environmental counsel and consultants, and go through an extensive review every five years before PotashCorp can renew their mining permit.

Commissioner Josh Smith reminded Roberson that PotashCorp is a private company that purchased the land where they do their mining and chemical business. He also said he, as well as Ogburn, serve on the technical working group committee that meets quarterly to review the operations at PotashCorp.

Ogburn said he couldn’t say that PotashCorp has always done things properly.

“I agree with you,” he told Roberson. “There’s a lot of things that probably aren’t the best for the county that has happened out there through the years. Our land is being turned upside down, absolutely. The reclamation don’t always suit my fancy. I argue about it all the time.”

Smith told Roberson that the board would ask Williams to come to the next commission meeting to give an update.

“At that point in time, we’ll discuss whether we want to put a committee together to try to work in coalition with PCS as they shut that plant down and then monitor what’s going on,” Smith said.

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