Praxair Deal with Honeywell is a Good Sign for Hopewell
By Caitlin Davis
Oct 1, 2012, 12:24
At the beginning of September, Praxair, an industrial gas company, signed a 15 year agreement with Honeywell Resins and Chemicals for the purchase of carbon dioxide. The carbon dioxide will be purified and liquefied at Praxair’s new plant, set to open at the Honeywell site in 2013.
Andrew Hagy, Economic Development Director, said this new agreement is a good sign for the city.
“That’s a good sign of the city for them to select the city,” Hagy said. “That they feel comfortable enough with the city’s profile to expand...to step up and make that investment.”
Praxair is the largest industrial gas company in North and South America. In 2011, the company reported sales of $11 billion. Hagy said those numbers will speak volumes in Hopewell.
“It’s good to have a company of that stature to locate here,” Hagy said. “It’s like the stamp of approval.”
Hagy said when a new company locates in Hopewell, that decision can be used as a marketing tool for other companies.
“When you have companies like that in your community, other businesses take notice of that,” Hagy said. “We can do all the marketing in the world, but businesses look at other businesses. It’s like equal to a million dollars worth of marketing.”
Another incentive for Praxair to locate in Hopewell is the Enterprise Zone program. Created in 1982 by the General Assembly, the program is designed to give state and local incentives for businesses to locate or expand in the zone areas.
One of the incentives for Praxair will be a 30 percent rebate on machinery and tools under the Machinery and Tools tax they will receive for locating in the enterprise zone.
In Virginia, there are currently 50 enterprise zones, made up of 2,082 acres of commercial, industrial, retail and office spaces. The local enterprise zone begins at the industrial park an expands into downtown Hopewell to the Appomattox River by Rt. 10.
Hagy is working to bring even more businesses to Hopewell, which, he said, is showing signs of an improving economy.
In July 2011, the unemployment in the city was 11.7 percent. In July of this year, the unemployment rate was 8.9 percent. That rate is still higher than the average state average of 5.9 percent.
“I’ve been pleased with the activity in general versus a non activity and me having to go out and shake the bushes as they say,” Hagy said. “In the meantime there is a lot of proactive development I am having to respond to.”
Although there are no other specific agreements with new businesses on the books currently, Hagy said he is optimistic about the conversations he has had with companies.
“The ones I have talked to are all positive,” Hagy said. “I wish I could say come the end of the year we would have an announcement of a million square feet of commercial space in the city.”
Praxair specializes in producing, selling, and distributing atmospheric, processing and speciality gases, and high performance surface coatings. The Hopewell plant is expected to produce 450 tons of carbon dioxide per day for primary use in food freezing and processing as well as beverage applications.
“Honeywell is pleased to forge this new relationship with Praxair,” Qamar Bhatia, Vice President and General Manager of Honeywell Resins and Chemicals said in a press relase. “This agreement significantly benefits Honeywell by improving productivity and greatly reducing CO2 emissions at our Honeywell site.”
“We are very pleased to expand our business relationship with Honeywell,” Kevin Ford, Vice President, East Region, for Praxair, said in the realease. “Praxair’s world-class facility in Hopewell will enable us to better serve our customers as we build additional capacity to take advantage or growth opportunities in the Mid-Atlantic states.”