UPDATED: 08/10/2018 — see Change Log

OWNER: AdvanSix Inc (Honeywell spin-off)
PROJECT: Existing ammonia plant[memberful does_not_have_subscription=”1314-ammonia-industry-annual-subscription,1311-ammonia-industry-monthly-subscription,3338-ammonia-industry-30-day-subscription”]

COST (reported): None given
JOB CREATION (reported): 650 (site-wide) — see Job Openings [LINK]
START-UP DATE (reported): 1928

CAPACITY	USGS[1]	COMPANY[2]	PERMIT[3]	ADJUSTED[4]
Ammonia	530,000 mtpy	650,000 stpy	[Membership required]	[Membership required]
Units: stpd, stpy, mtpd, mtpy = short/metric tons per day/year. [1] United States Geological Survey (USGS) Mineral Yearbook, Nitrogen gives capacity in metric tons per year, calculated as “engineering design capacity adjusted for 340 days per year of effective production capability,” rounded to three significant digits. Source: most recent year, Table 4: Domestic Producers of Ammonia, http://minerals.usgs.gov/minerals/pubs/commodity/nitrogen/. [2] AdvanSix 2016 10-K, converted from pounds per year. Sources: linked below. [3] [Membership required]. Capacity withheld as confidential in air permits. Sources: linked below. [4] [Membership required]. See Methodology.

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SUMMARY STATUS: Operational
Ammonia production began at Hopewell in 1928, at which time it was the largest ammonia plant in the US. Today, using a plant built in 1965, ammonia is upgraded to caprolactam, for nylon; byproduct ammonium sulfate is sold as fertilizer. Unfortunately, the Hopewell site has a long history as an environmental disaster zone. In October 2016, Honeywell’s resins and chemicals division was spun-off to become AdvanSix. Ammonia capacity increased slightly as a result of the Q4 2016 turnaround.

ORIGINAL PLANT:
COST: $100 million
START-UP DATE: 1928

CURRENT PLANT:
COST: $10-$12 million
JOB CREATION: 650 (site-wide) — see Job Openings [LINK]
START-UP DATE: 1965

CAPACITY	USGS[1]	COMPANY[2]	PERMIT[3]	ADJUSTED[4]
Ammonia	530,000 mtpy	650,000 stpy	None given	589,670 mtpy
Caprolactam		397,500 stpy		360,606 mtpy
Ammonium Sulfate		1,650,000 stpy		1,496,855 mtpy
Units: stpd, stpy, mtpd, mtpy = short/metric tons per day/year. [1] United States Geological Survey (USGS) Mineral Yearbook, Nitrogen gives capacity in metric tons per year, calculated as “engineering design capacity adjusted for 340 days per year of effective production capability,” rounded to three significant digits. Source: most recent year, Table 4: Domestic Producers of Ammonia, http://minerals.usgs.gov/minerals/pubs/commodity/nitrogen/. [2] AdvanSix 2016 10-K, converted from pounds per year. Sources: linked below. [3] Capacity withheld as confidential in air permits. Sources: linked below. [4] Adjusted Capacity is in metric tons per year assuming operations for 365 days per year; based on company data. See Methodology.

FEEDSTOCK: Natural gas, Landfill gas
END PRODUCTS: Ammonia, Ammonium Sulfate, Caprolactam and derivatives (Nylon-6)

RESEARCH NOTES:
Hopewell is the oldest active ammonia production site in the US: it has been producing ammonia since 1928, although the current plant was built in 1965.

In October 2016, Honeywell spun off its Resins and Chemicals division into a new public company, AdvanSix Inc. When Hopewell’s ammonia production was only a small part of the sprawling and secretive Honeywell business, very little information was available about operations.

However, since the spin-off, AdvanSix has published much more information – including the site capacity, detailed financial performance data, and information about the Q4 2016 planned turnaround, which was extended by two weeks of unplanned maintenance, costing the new company an estimated additional “$20 to $25 million.”

A few weeks later, in December 2016, the Hopewell plant went down again, in a “temporary outage … force majeure event.” Because the company’s inventory levels were already reduced following the turnaround, AdvanSix’s production chain was broken, leading to lost sales and an “approximately $10 to $12 million unfavorable impact to pre-tax income in the fourth quarter of 2016.”

By March 2017, when AdvanSix released its Q4 2016 earnings, these “planned turnaround activities and incremental unplanned outages,” had reduced the quarter’s income by “approximately $64 million.”

According to the company’s 2016 10-K, published in March 2017, the turnaround activities had also led to a 50,000 stpy expansion in ammonia capacity.

In April 2016, Bloomberg News had broken the news that Honeywell was looking at the spin-off or sale of its caprolactam unit, which included the Hopewell ammonia plant.

In May 2016, Honeywell confirmed the rumor and announced a spin-off to new public company, AdvanSix, scheduled for 2017. However, the transaction happened sooner than expected.

In October 2016, AdvanSix launched as an independent company and its shares began trading on the New York Stock Exchange. Existing Honeywell shareholders inherited one share of the new company for every 25 shares they held on the date of record, tax free.

“Our $1.3 billion Resins and Chemicals business enjoys a leading position in the industries it serves and a global cost advantage. It is favorably positioned to continue to achieve global growth as a standalone enterprise, with added flexibility to make capital investments that enhance its offerings and service to customers … Following the spin-off, Honeywell and AdvanSix will each have a more focused business and be better positioned to invest more in growth opportunities and execute strategic plans best suited to its respective business” …

Upon completion of the spin-off, AdvanSix will be an independent, global, leading manufacturer of Nylon 6, a polymer resin used to produce engineered plastics, fibers, filaments, and films that, in turn, are used in end products such as automotive and electronic components, carpets, sports apparel, fishing nets, and food and industrial packaging. AdvanSix also produces Sulf-N® ammonium sulfate fertilizers and chemical intermediates, including phenol, acetone, and Nadone® cyclohexanone, and is the largest single-site producer of caprolactam.

The Hopewell site began life in 1915 as “the greatest munitions plant in the world.”

It was built by E.I. du Pont de Nemours & Co (DuPont) and produced over a billion pounds of gun-cotton (nitrocellulose) for the US military during World War I. The wartime need was such that the plant had to start production only 90 days after they had begun clearing the ground for construction. In those days, when industrial-scale ammonia synthesis was only just starting to be feasible, DuPont’s raw material was nitric acid, which it produced on site from “nitrate of soda,” known then as caliche, imported from mines in Chile. At its peak, DuPont’s Hopewell munitions plant employed 25,000 workers. (For more history, see decades of DuPont archives online, starting with the June 1918 issue of the Dupont Magazine – see page 10: “Nitric Acid – Aqua Forte” and page 14: “The Hopewell Plant”.)

In 1928, the Atmospheric Nitrogen Company built at Hopewell what was then the largest ammonia plant in the US, with a capacity of 108,000 short tons per year, at a cost of $50 million. In 1921, Atmospheric Nitrogen Co had built the first Haber-Bosch plant in the US, in Syracuse. The company was a subsidiary of Allied Chemical & Dye Corporation, which had been formed in 1920 from a merger of five chemicals companies: Solvay Process Company, General Chemical, the Barrett Company, Selmet-Solvay, and the National Aniline & Chemical Company. In 1985, Allied merged with Signal Companies; then, in 1999, AlliedSignal acquired Honeywell for $15 billion, and called itself Honeywell International.

Honeywell’s Hopewell plant is “one of the world’s largest single-site producers of caprolactam, the primary feedstock in the production of nylon polymer used in carpet fibers, plastics and films.” It produces ammonia as the raw material for caprolactam. Ammonium sulfate, which is sold as a fertilizer, is a byproduct of the caprolactam production process. The Hopewell plant is reported to be “Virginia’s second largest exporter,” shipping its caprolactam to China and other countries in Asia, and sending Ammonium Sulfate fertilizer to South America.

The present ammonia plant was built in 1965 by Kellogg Co (then a division of Pullman, now KBR). The 1,000 stpd, single line ammonia plant cost “$10 to $12 million,” and replaced five 200 stpd plants, which had become “too inefficient and too cumbersome to continue operating.” According to the annual USGS Mineral Yearbook, Nitrogen, the plant’s ammonia capacity increased to 409,000 mtpy, and then increased again, in 2005, to its current capacity of 530,000 mtpy (assuming operation for 340 days per year). In 2006, Honeywell also expanded its caprolactam production by about 10%, with an assumed equivalent expansion in the byproduct ammonium sulfate capacity; at that time, USGS estimated that Honeywell “produced more than 1.5 Mt of Sulf-N® brand ammonium sulfate annually.”

The site uses natural gas as the main feedstock for its ammonia, but supplements this with landfill gas.

Unlike every other ammonia plant in the US, Honeywell’s air permit [PDF] essentially redacted information about the plant’s production capacity, citing this as “confidential” information. The air permit therefore gives “surrogate parameters in lieu of confidential information such as maximum rated capacity.” It may help you to know that “the total heat input to the M. W. Kellogg Ammonia Plant from all fuels shall not exceed 812,250 Kellogg heat input units per year,” but this is not useful information to me. (In case it needs to be pointed out, there is a link between the company’s attitude towards transparency and its environmental record.)

Honeywell’s Hopewell plant appears to have one of the most pathetic environmental records in US industrial history.

In the 1960s and 1970s, the Hopewell plant produced the infamous carcinogenic insecticide Kepone (chlordecone), which is similar to DDT and Mirex. This chemical is a “persistent organic pollutant,” which is not just toxic but also accumulates up the food chain, finally causing severe seizures (“synaptic degradation”) in humans. In the 1970s, Kepone was used by the banana industry to kill weevils and, 40+ years later, it’s still the reason you shouldn’t eat seafood in Martinique or Guadaloupe. One of the “dirty dozen” chemicals, it is now banned worldwide. In Hopewell, Kepone entered the nearby James River easily enough, through “improper handling and dumping,” and as a result the river had to be closed for fishing “from Richmond to the Chesapeake Bay” for 13 years, from 1975 to 1988. Although the fish in the river are still contaminated, this is now at a level “below federal health and environmental standards.”

In 1999, the EPA determined that the areas of the site that were “known or reasonably suspected to be contaminated” included the air (indoors), the surface soil (<2 feet deep), sub-surface soil (>2 feet deep), ground water, surface water, and sediment – so, at that time, the only area not affected was the air (outdoors). In 2001, the EPA fined Honeywell $150,000 to settle its grievances, which was supposed to demonstrate the “company’s willingness to compensate for past violations at the plant, and go the extra mile to protect Virginia’s people and environment into the future” (Honeywell “neither admitted nor denied liability”).

The site’s environmental record had not significantly improved by 2012, when the DOJ fined the plant $3 million for violating the Clean Air Act. Company reps reported that “Honeywell is committed to the highest standards of environmental compliance … [but] does not admit to any of the alleged violations.”

In November 2014, again, little had changed: an ammonium carbonate spill apparently overwhelmed the containment lagoon and entered the James River, likely causing the death of “several hundred fish.”

In March 2018, according to an AdvanSix announcement, “federal and state authorities” entered the Hopewell site and “executed a search warrant and separately served a subpoena … relate[d] to the facility’s environmental air emissions and its compliance.” The company is, of course, “cooperating fully.”[/memberful]

View larger map with all ammonia plants.

ADDRESS: 905 East Randolph Road, Hopewell, VA 23860, United States

WEBSITE: https://www.advan6.com/hopewell/
WEBSITE: https://www.advansix.com/

REGULATORY SOURCES:

• USGS: Minerals Yearbook, Nitrogen [RECENT / ARCHIVE]
• EPA Emissions data: Greenhouse Gas Emissions from Large Facilities: HONEYWELL INTERNATIONAL INCORPORATED – HOPEWELL [LINK]
• Risk Management Plan: Right to Know Network: Honeywell Hopewell Plant [LINK]
• Operating Permit (Title V): Virginia DEQ: Honeywell, Hopewell Facility Permit (2014) [PDF] and Statement of Basis [PDF]
• US Securities and Exchange Commission regulatory filings: EDGAR Search Results, HONEYWELL INTERNATIONAL INC CIK#: 0000773840 [LINK]

NEWS SOURCES:

• 08/09/2018: AdvanSix presentation: Jefferies Industrials Conference [LINK]
• 03/14/2018: AdvanSix press release: AdvanSix Provides Update on Its Hopewell, Virginia Site [LINK]
• 01/17/2018: AdvanSix press release: AdvanSix Reports Reduced Production Rates at Its Manufacturing Facilities [LINK]
• 03/03/2017: AdvanSix 2016 10-K [LINK]
• 12/08/2016: AdvanSix press release: AdvanSix Reports Temporary Outage at Its Hopewell Facility [LINK]
• 11/10/2016: AdvanSix press release: AdvanSix Announces Third Quarter 2016 Financial Results [PDF]
• 10/31/2016: AdvanSix press release: AdvanSix Provides Operational Update on Its Fourth Quarter 2016 Plant Turnaround [LINK]
• 10/03/2016: AdvanSix press release: AdvanSix Launches As Independent Company, Begins Trading On New York Stock Exchange [LINK]
• 09/07/2016: Honeywell press release: Honeywell Board Of Directors Declares Spin-Off Dividend Of AdvanSix Shares [LINK]
• 05/12/2016: Honeywell press release: Honeywell Announces Plan To Spin Off Resins And Chemicals Business To Shareowners [LINK]
• 04/07/2016: Bloomberg News: Honeywell Said to Consider Sale of Nylon Chemicals Business [LINK]
• 11/26/2014: Richmond Times-Dispatch local news article: Chemical spill apparently caused Hopewell fish kill [LINK]
• 01/10/2005: EPA conference presentation: The Honeywell Project, Going Where No Pipeline Has Gone Before [PDF]
• 06/07/1999: New York Times news article: Allied Signal And Honeywell To Announce Merger Today [LINK]
• 08/12/1965: The Progress-Index Petersburg local news story: Allied Chemical spending $10-$12 million: New Plant a Necessity [LINK paywall]
• Archive: Harvard Business School Library, Lehman Brothers Collection: Allied Chemical Corporation [LINK]
• Archive: Hagley Digital Archives: DuPont Company Magazine, 1913-2003 [LINK]