Publicly traded LSB Industries Inc. (NYSE: LXU) of Oklahoma City, Oklahoma, has received a $77 million federal grant to expand its production facility in El Dorado, the U.S. Department of Agriculture announced Wednesday.
The grant is a portion of $120 million awarded to six fertilizer production projects in Arkansas, California, Illinois, South Dakota, Washington and Wisconsin through the Fertilizer Production Expansion Program to help businesses modernize equipment, adopt new technologies, build production plants and more. The program aims to strengthen American farms and businesses by expanding innovative domestic fertilizer production.
The project in El Dorado will expand LSB Industries’ existing urea and ammonium nitrate fertilizer production facility, increasing capacity to over 580,000 tons annually, according to the USDA. The expanded capacity will allow product to be available to roughly 450,000 producers within a four-state region.
The project is expected to create 20 full-time jobs.
“When we invest in domestic supply chains, we drive down input costs and increase options for farmers,” USDA Deputy Secretary Torres Small said in a statement. “Through today’s investments to make more fertilizer and process meat locally, the Biden-Harris Administration is bringing jobs back to the United States, lowering costs for families, and supporting farmer income.”
The grant program is funded by the Commodity Credit Corporation, a wholly-owned government corporation within the USDA.
In addition, the USDA on Wednesday announced $20.2 million in awards to 26 projects to expand processing capacity in the meat and poultry industry, which is expected to increase competition and lower fertilizer costs for farmers and food costs for consumers.
LSB on Tuesday reported a third-quarter loss of $25.4 million and revenue of $109.2 million.
The company recently completed the construction of an additional 5,000 tons of nitric acid storage at its El Dorado facility. LSB said the extra storage will help it capitalize on incremental sales opportunities not previously available.
In a quarterly earnings report, President and CEO Mark Behrman said the company is transitioning the El Dorado facility to low-carbon products, pending approval from federal regulators to drill two new injection wells. The project would allow LSB to capture and sequester between 400,000 and 500,000 metric tons of carbon dioxide per year, reducing emissions directly generated by the company by 25%
Those operations are expected to begin in 2026.
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