Memphis Offers $45 Million in Tax Incentives for Kruger Tissue Mill Expansion

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The City of Memphis, Tenn., USA, reportedly has offered $45 million in tax breaks to Canadian-based Kruger Inc. (Montreal, Qué.) as incentive to expand its KTG USA LP tissue mill in North Memphis. This past January, Kruger announced that it is considering major expansions at either the Memphis mill or its Crabtree mill just northeast of Montreal. Both projects would include installation of a new tissue machine. The Memphis project would involve an estimated $312 million investment.

According to a recent article in The Commercial Appeal, Memphis, the expansion would add 100 employees and pump $555 million into the Memphis area economy over the next 15 years, including more than $100 million in payroll. The Memphis-Shelby County Industrial Development Board voted 5-0 to approve the measure that would save Kruger 90% of city real estate taxes and 75% of county taxes between 2013 and 2028.The project would generate $55,669,989 in other tax revenues during that time, the newspaper article reported. Kruger is to make its decision about which facility to expand in a matter of "months."

In 2002, Kruger purchased the 1.8 million-sq-ft mill, which sits on 45 acres, for $24 million, ending a string of bankruptcies and various owners that began when the original owner Kimberly-Clark closed its doors after 50 years in 1994. It is the largest industrial complex in Memphis.

In 2005, Kruger announced a $42-million upgrade at the mill as its U.S. market share rose, increasing its capacity to the current 100,000 tpy. The Memphis facility has 294 employees and produces at-home bathroom tissues, facial tissue, and paper towels.

In addition to the Memphis and Crabtree mills, Kruger also has a 40,000 metric tpy tissue mill at Lennoxville, Qué., and an 89,000 metric tpy tissue mill in New Westminster, B.C., Canada.