The Nevada rocket fuel component manufacturer that last month announced plans to relocate near Cedar City has yet to secure financing to pay for the $23 million plant, delaying its reopening at least until March 1.
But opening a month behind schedule won't affect how long it takes Pacific Engineering and Production Co. to deliver its first order of ammonium perchlorate, said David Adams, director of the state Community and Economic Development Department.PEPCON has already missed a self-imposed Aug. 1 deadline for the start of construction on a new plant to replace a Henderson, Nev., facility destroyed in a series of explosions on May 4 that left two workers dead, about 350 injured and millions of dollars in property damage.
Adams, who met with PEPCON executives in Las Vegas last week, told members of the Legislature's Economic Development Interim Committee Wednesday he has been assured the company can make up for lost time by buying an ingredient instead of mixing it itself.
The reason for the slowness in obtaining financing is not clear, and company officials were not immediately available for comment because of a scheduled funeral for Nevada State Sen. James Gibson, a PEPCON executive.
The company has been cited for 30 violations that carry fines totaling $36,455 by the Nevada Division of Health and Safety. It was also investigated by a special commission created by the Nevada governor.
PEPCON is one of only two manufacturers in the United States of ammonium perchlorate, the oxidizer in solid rocket fuel that is considered vital to the nation's space and military programs.
Officials of both Morton Thiokol and Hercules have said that unless PEPCON is back in production by early next year, their supplies of ammonium perchlorate will be depleted and workers will have to be laid off.
Adams said he expects the federal government to step in if enough money is not forthcoming from other sources soon.
"The government, one way or another, is going to see to it that this plant gets built," Adams said in an interview. "Our space effort is not going to be stopped."
PEPCON has suggested that NASA help fund the construction and equipping of the plant, Adams said. The company would repay the agency at a later date and supplement the loan with money from banks and other sources.
Money would likely come from First Interstate Bank, even though Utah legislators met in special session last month to change the law so state bonds could be issued.
Those taxable industrial-revenue bonds would be guaranteed through a contract PEPCON has with NASA. The state would be lending the company its high credit rating, to ensure enough money would be made available and to keep interest rates low.
PEPCON executives have said that money would likely be obtained faster through First Interstate Bank because the company was already negotiating the loan when the special session was held July 20.
The state bonding process was seen by the company as a back-up financing method in case the bank financing fell through, Adams said, noting that PEPCON did not even decide to relocate in Utah until a week after the special session.
The 4,800-acre site selected by PEPCON is about 15 miles from Cedar City.