The future is bleak for Farmland Industries Inc.’s Lawrence nitrogen fertilizer plant, an industry analyst said Wednesday.

“I doubt seriously that it will ever be sold,” said John Douglas, president of an Alabama consulting firm that serves the fertilizer industry.

Activity at Lawrence's Farmland nitrogen fertilizer plant, located along Kansas Highway 10, remains light since company officials stopped production at the facility in May 2001. Wednesday, one day after the company announced the plant would be put up for sale, opinions were mixed about the facility's future.

His prediction came a day after Kansas City, Mo.,-based Farmland, the nation’s largest cooperative, said it wanted to sell its fertilizer plants and distribution terminals across the nation. It hopes to raise money to help the company emerge from Chapter 11 bankruptcy.

Barring a sale, Farmland hopes to find a strategic alliance with another company to run the plants. It would need bankruptcy court approval to proceed with either option.

But Douglas said the age of the Lawrence facility, which opened in 1954, would make it a hard sell.

“If it is the oldest plant, it likely is the most inefficient plant,” he said.

The future of the plant, on Kansas Highway 10 east of Lawrence, has been in question since Farmland idled the facility in May 2001 and released most of the plant’s 150 employees. It kept a maintenance crew of 14 workers on the payroll. Farmland officials decided to shut down the plant after the fertilizer market failed to recover from a slump in demand and an increase in natural gas prices, the main component in producing nitrogen fertilizer.

Douglas said he did not expect economic conditions to change anytime soon. He said U.S. natural gas was still three to 10 times more expensive than in many foreign countries.

Value-added agriculture?

Lynn Parman, vice president of economic development for the Lawrence Chamber of Commerce, said the plant could be reused by companies looking to produce value-added agricultural products such as soy-diesel or ethanol.

“Value-added agriculture is an emerging industry trend,” Parman said. “There may be some potential there.”

But Parman said she didn’t have any specific prospects for the plant, which sits on about 300 acres and is surrounded by another 300 acres of “buffer ground” also owned by Farmland.

Parman said Tuesday’s announcement gave the chamber the signal it needed to begin marketing the site to companies interested in the area.

“Now that we know the facility is going to be sold, we’ll certainly add it to the list of available inventory,” she said. “As a community we need to move forward and try to understand what type of adaptive reuse may work for that facility.”

Parman said the site’s size and location would allow it to be used by a variety of industries, but value-added agriculture firms may be particularly interested in the site because some of the equipment could be reused in new ventures.

She also said the rail access the property has and its location along a major highway might be attractive to agricultural companies that depend heavily on transportation systems to receive raw materials.

Difficult conversion

But Douglas said few fertilizer plants have been converted to other uses.

“There have been one or two that have closed down and tried to make methanol, but they have found out the methanol business is even worse than the fertilizer business in terms of being cyclical,” Douglas said.

Sherlyn Manson, a Farmland spokeswoman, said the company probably would set up a bid process to allow companies to bid on individual facilities, rather than requiring bids for all the company’s fertilizer assets.

She said no timeline had been set for the company to sell the properties. Manson declined to say whether the company had an interested buyer for the seven fertilizer plants and 19 distribution terminals.

Three of the plants are in Kansas at Lawrence, Coffeyville and Dodge City, with the others in Fort Dodge, Iowa; Pollock, La.; Beatrice, Neb.; and Enid, Okla. One of the distribution terminals is in North Lawrence.

Sharon Watson, spokeswoman for the Kansas Department of Health and Environment, said the new owner would have to work with KDHE and the Environmental Protection Agency to clean up the Lawrence property.

KDHE has been working with Farmland since 1994 to remove nitrates from the groundwater in the area and from several ponds that are on the property.