American Pacific Corp.'s subsidiary Pepcon Production Inc. has begun construction of its new ammonium perchlorate plant at a 4,800-acre site 15 miles west of here.

The chemical is the oxidizing agent used in all solid rocket propellant motors such as the boosters used on the Space Shuttle.Another subsidiary of American Pacific formerly operated an ammonium perchlorate facility near Las Vegas that was destroyed by a series of explosions May 4, eliminating more than half of U.S. ammonium perchlorate capacity.

The new plant will produce 40 million pounds per year of the chemical.

"Our current construction estimate is in the $40-$50 million range," said C. Keith Rooker, vice president. "The increase from the previous estimate of approximately $30 million resulted from changes in the scope of the project, its location and the Iron County climate.

He said Pepcon has received a commitment from a commercial bank for construction and permanent financing. "Since that financing is not scheduled to close until Nov. 15, we do not wish to identify this financial source until the transaction is finalized," said Rooker. "In the interim, bridge financing has enabled us to begin construction."

He said production of 20 million pounds annually is expected to begin next spring at a level of 20 million pounds of ammonium perchlorate with plant completion by fall.