Officials with Yuhuang Chemical Inc. held a ceremonial groundbreaking ceremony on September 18 for a $1.85 billion ethanol plant to be constructed in Vacherie, La.

The project is Yuhuang's first investment outside of mainland China and the largest investment by a Chinese company in the Gulf Coast. The company closed on the purchase of 1,300 acres on River Road last month and recently signed key design, engineering and construction contracts. 

The first two phases involve the construction of two separate methanol plants with a combined annual capacity of 3 million metric tons. The third phase will construct a methanol derivatives plant. Air Liquide will also build a $170 million air separation unit on the site to supply oxygen for the operation which uses it to turn natural gas into methanol.

Yuhuang is also in early negotiations to purchase St. James High School for $10.1 million which sites next to the future complex and will be converted into a plant administration facility. The Chinese company made a $500,000 deposit after voters approved a $56 million bond issue earlier this year to build a replacement school.

The company is expected to start construction in February once the existing sugar cane is harvested from the 250 acres on the first phase. The first phase should be completed in a year.

The project is expected to create 2,100 temporary construction jobs at the peak of construction activity and more than 400 permanent jobs with an average salary of $85,000 per year.

"Building a new world-scale methanol unit in Louisiana is Shandong Yuhuang's first major step in becoming a global player in the petrochemical industry," said CEO Charles Yao in a press release. 

Along with the Sasol project in Lake Charles and Benteler Steel/Tube project in the Port of Caddo-Bossier, the ethanol plant will be one of the largest construction projects in Louisiana in the next five years.