The facility will be finished this year will "transform and modernize" the production, storage and handling of acetic acid and acetic anhydride, which are used in the manufacturing of military explosives. BAE said.
The facility being built is at the Holston Army Ammunition Plant -- an Army-owned, contractor-operated site that produces a range of explosive fills, such as RDX and HMX for artillery and other munitions.
"This is one of the most important projects at Holston since it opened in 1942," said Jerry Hammonds, vice president and general manager of BAE Systems Ordnance Systems, which manages and operates the plant. "The facility will significantly reduce energy usage and cut other costs, saving money for the Army and for taxpayers."
In years past, chemicals like acetic acid and acetic anhydride were processed at a 110-acre site, which is about 7 miles from the main facility. A rail corridor and pipelines were used to move the chemicals during manufacturing.
The new facility for processing the chemicals will be on the main plant site. It will use combined-heat-and-power technology to produce steam from natural gas to produce electricity and process the chemicals.
BAE Systems said construction began in 2011 and the total cost of the project when completed will amount to about $143 million.
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