Quarter-billion dollar cement plant set for Clark County

Jennifer Shubinski

Wednesday, July 14, 2004 | 10:30 a.m.

A cement company announced plans Tuesday to build a $250 million, 1.5-million-ton a year cement plant in Clark County on the Moapa Indian reservation northeast of Las Vegas.

The Ash Grove Cement Co. plant would be built about 40 miles from North Las Vegas, just north of Crystal, on the Moapa Band of Paiute Indian's reservation, on the north side of Interstate 15.

Charlie Sunderland, Ash Grove's chairman and chief executive, said the company hopes to expand its market share in the Las Vegas Valley, which Sunderland placed at roughly 25 percent currently, and he said the new plant would free up existing Ash Grove plants in other states to satisfy demand in those markets.

Rumors have been circulating for more than a year that a major cement plant was planned for Southern Nevada, which relies on about 1.5 million tons of cement imports a year and has been in a supply crunch over the past few months, industry experts said. A small cement plant was built in Logandale, also north of Las Vegas, about 10 years ago. But it has had a spotty existence and even when operating had a negligible affect on the market, industry insiders said.

Cement is an ingredient in concrete, which is used in everything from houses to highways. Cement is manufactured at temperatures of more than 2,700 degrees from limestone and other mineral aggregates.

"We're very excited that they are building this here locally, and hope it stabilizes the long term ready-mix concrete market," said Ennis Jordan, president and owner of All Star Transit Mix, the largest local consumer of Ash Grove Cement.

Ash Grove, based in Overland Park, Kan., now serves the Las Vegas market with two cement plants; one in Leamington, Utah, the other in eastern Oregon. About 80 to 85 percent of the valley's cement supply is imported by various companies from California, which either manufacture it or import it from overseas, local industry officials said.

Sunderland said by the valley manufacturing much of its own cement, it can free up Ash Grove Cement shipments now sent to Las Vegas to satisfy demand in other markets. He said some of the cement manufactured at the Moapa plant would also be shipped to other markets.

"We will look at other terminal opportunities in the Southwest," he said. "But we hope the bulk of the cement will stay in Las Vegas."

The company currently has a North Las Vegas distribution terminal. As to whether that terminal will continue to operate when the Moapa plant is open has not been decided, Sunderland said.

Demand

A local cement plant is key to helping ease the cement shortage that has gripped the Las Vegas Valley for the past few months and has plagued the industry off and on for years, industry officials said. Because of the current shortage, most local suppliers of ready-mix and concrete have shortened their work week from six to five days, continue to allocate supplies and are not taking on new customers.

"It's a pretty smart move on their part, it's good to see companies in the United States that are willing to invest money in the cement industry," said Steve Hill, president of Silver State Materials. "It may be a help, but the help won't get here for four or five years from now (because of time needed for permitting and construction)."

A variety of factors have contributed to the cement shortage, including the booming Chinese economy, a shortage of shipping fleets to deliver the material, and the U.S. construction boom.

In the West, regional transportation problems, such as a shortage of truck drivers and rail slowdowns, have hampered shipments to the Las Vegas Valley and have contributed to the problem, local manufacturers said.

Rich Warren, executive director of the Southern Nevada Concrete & Aggregates Association, said the impact of the plant would be felt not just within Nevada's borders.

"The eventual impact is they will not have to ship cement here from Utah, which is a real booming economy," he said. "That way they can keep up with that market, which (also) has allocation problems, without hurting Vegas."

Warren said that in the early 1990s Ash Grove temporarily cut off Las Vegas' cement supply from its Utah plant because it couldn't meet that state's cement needs.

Location and taxes

Sunderland said Ash Grove surveyed the entire Southern Nevada area looking for a place for the cement factory. The Moapa reservation location was chosen because of the high quality limestone reserves on the Moapa reservation, along with interstate highway and rail access, he said. Sunderland also said the location is ideal because of its remoteness.

"Certainly not a lot of people are anxious to have a cement plant in their back yard," he said. "To (build) a major industrial facility is difficult in heavily populated areas, so we look for low densities of population."

Ash Grove will make land and water payments and pay limestone royalties and tribal taxes to the Moapa tribe. It will employ 100 to 120 people, Sunderland said.

Ash Grove won't pay property taxes to Clark County because the plant will be on reservation land. Instead, the company will make payments in lieu of taxes to the tribe. The costs would be similar to any taxes the company would pay to Clark County, Sunderland said. Future payment amounts were not available.

As to whether the company will charge state sales tax, pay state payroll and unemployment insurance taxes was not immediately known.

"I know the fact that it is on a reservation, the BIA (Bureau of Indian Affairs) has the ultimate authority on some of this. But that's probably a level of detail we haven't gotten into, and while important, it's not one of the main economic decisions as to where to build the plant," Sunderland said.

Phil Swain, tribal chairman, said in a statement the council simply wants good jobs and economic development for its people.

"Ash Grove's plant will bring both," Swain said.

Environment

Construction on the Moapa plant is expected to begin in early 2006 with completion projected for late 2007 or early 2008. Though the plant is on an Indian reservation, which is not subject to as many state and federal laws, it will adhere to environmental regulations required by the Environmental Protection Agency (EPA).

Clark County Air Quality officials said the plant would have significant impact on the Moapa Valley's air quality but that the EPA has ultimate control and regulation because the plant is on reservation land.

Because the plant would be built outside the Las Vegas Valley air shed, it would not have an impact on the Las Vegas Valley's air quality, said Bob Folle, acting assistant director for Clark County Air Quality Control.

The Moapa plant, which would run 24 hours a day, would use coal and coke, a form of coal, to heat the limestone aggregate to more than 2,700 degrees.

Sunderland expects the permitting process to take about a year. He said because the plant is planned on an Indian reservation, the permitting process will go through the Bureau of Indian Affairs and the EPA.

Roger Kohn, environmental protection specialist for EPA's Region 9, which includes Las Vegas, said EPA and company officials met in September, when the company indicated it would begin the permitting process in the first quarter of this year.

"We have not had contact with them since then, and we don't know what their plans are," he said.

Because no plans have been submitted, it is difficult to determine what type of environmental impact the plant would have on the area, said Matt Haber, deputy director of the EPA's Region 9 air division.

"Until that happens, we can't say what the impact will be, nor can Clark County," Haber said.

He did say that in general, cement plants of the size planned for the Moapa reservation are comparable, in terms of emissions released, to large power plants and refineries.

The Moapa Indian reservation is straddled by the Valley of Fire to the southeast and the Desert National Wildlife Range to the northwest. As part of the issuance of permits, the company would have to apply for a PSD permit (Prevention of Significant Deterioration), which among other things, would study the impact to any species' habitat.

The Moapa plant would be one of Ash Grove's largest cement plants. Founded in 1882, Ash Grove Cement operates nine cement plants, including a 1.5-million-ton plant in Kansas, for a combined plant production capacity is more than 7.8 million tons of cement a year. The company also operates 23 cement terminals, one lime plant and has numerous subsidiaries in the concrete and aggregate industry.

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