$345 Million in Incentives by State and Local Governments Achieve $8 Billion of Investment and 7,513 New Jobs
C Martin (Marty) Abbott
We lower expansion costs for manufacturers by up to 15% by identifying, obtaining and managing state incentives. Whether a current facility being expanded or a new facility being built, we will improve your ROI.
During a time when many companies are wavering amidst the global pandemic, some standout companies in the manufacturing industry have managed to stay resilient by adapting to meet the challenges of an evolving landscape and continuing infrastructure growth. These companies received grants and incentives for expansion in their manufacturing operations, creating new jobs and bolstering the economies of their respective states. These six companies are a representative sampling of manufacturing expansion incentives from October 2021.
Request is a privately owned, 30-year-old frozen foods manufacturer. Request has extensive production capabilities which allow them to meet the demands of clients in food service, private label, and national brands.
Since 2001 Request has continued to expand to meet increased demand. The growth trend of?Request Foods continues in Michigan.?They have been approved for a Michigan Strategic Fund, board-approved, $205 million incentive package. The company has plans for a $74 million new manufacturing plant for their various frozen food products, a $43 million cold storage warehouse, an $81 million expansion to an existing plant, and a $7 million upgrade to its wastewater treatment facilities. These expansion plans will create 198 new jobs.
?Tyson is a multinational food manufacturing corporation based in Springdale, Arkansas. They are the world’s second-largest processor of chicken, beef, and pork, with multiple subsidiaries that manufacture a variety of food products.
?With pork in short supply over the past two years, Tyson seizes the opportunity to meet its consumer’s increased demand by expanding in Kentucky. They have been preliminarily approved a $10 million 15-year incentive agreement and $3 million in tax incentives by the Kentucky Economic Development Finance Authority (KEDFA.) The company plans on investing $355 million for their new manufacturing plant for the Jimmy Dean and Wright bacon products. This project will create 450 new jobs.
American multinational automobile manufacturer based in Dearborn, Michigan in the United States. The company sells automobiles and various commercial vehicles under the Ford brand and luxury vehicles under its Lincoln brand.
?Ford is adapting and expanding its manufacturing capabilities to establish its market share in the burgeoning electric vehicle market. The Tennesse General Assembly recently approved $884 million in incentives and $500 million in direct grants for the project.?The company plans to construct $5.6 billion electric vehicle assembly, battery manufacturing, and supplier campus project in a joint venture with SK Innovation and will create 6000 new jobs.
?Knickerbocker was founded in 1919 and is a fourth-generation American family-owned and operated company. They are a premier manufacturer of stylish and heavy-duty bed frames in addition to bedding support systems.
?Knickerbockers’s new specialized product lines for the hospitality and hotel industries, require the expansion of their manufacturing operations.?New Jersey has awarded the company with an $800,000 grant. Knickerbocker will also utilize a $200,000 exemption on paying sales tax for new factory equipment, a $21,000 exemption on the mortgage recording tax, and a seven-year payment in place of new property taxes valued at $625,757 offered by the state. The company has plans to invest $10.5 million with $5.5 million spent to buy the new plant, with another $2.5 million for equipment, $1.5 million for renovation, and smaller amounts for associated costs. This project will create 80 new jobs over three years.?
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Engineered Plastic Components, Inc. (EPC) is a leading manufacturer of plastic injection molded products with 17 locations in 10 states.
The Indiana Economic Development Corporation (IEDC) has approved up to $2.5 million in performance-based tax credits for the company. EPC is also planning to acquire a personal property tax abatement with estimated savings of $214,354 over the next five years. The company has plans for a $7.3 million expansion to its Scottsburg plant and is poised to add 60 new employees.
Fujifilm Diosynth Biotechnologies (FDB), is a company that develops and offers manufacturing solutions for pharmaceutical companies. ?They are a global CDMO in pharmaceutical manufacturing providing process development and cGMP production in cell culture, microbial fermentation and gene therapies.
With pharmaceutical companies thriving during the pandemic, Fujifilm Disosyth continues to expand its manufacturing operations in North Carolina. Holly Springs and Wake County have provided $90 million in incentives, with an additional $33.5 million from the state. The company plans to invest $2 billion on a plant that will employ 725 and manufacture large-scale, cell culture bulk substances, while also utilizing an automated fill-finish, assembly packaging, and labeling system.
When state and local governments engage in discussions of expansion incentives with companies, they envision a mutually beneficial relationship. Governments see these incentives projects are primarily tax creation projects. The companies are awarded incentives with the mathematical model in mind that governments will gain 85-95% of all new taxes from the project with the remaining 5-15% going to the corporation in the form of incentives. Likely 95-99% of all of the incentives are only disbursed when the company performs either the investments or the employee hiring. The process and responsibility within the state for determining which corporations receive incentives and how the amounts are determined is government by legislative action.?
For companies, they benefit from the incentives by achieving lower costs and improved ROI making the difference between projects that would not proceed without incentives or projects that move forward with the lowest cost and highest ROI.?
About the Author
Marty Abbott is President of Incentives Management Group which he founded 25 years ago.?The company shares its expertise with manufacturing sector companies with location in the U.S. and who are contemplating expansion and employee development.