Cape County commission OKs bonds for P&G expansion

Business Today

Procter & Gamble can count on up to $163 million in industrial revenue bonds to finance expansion of its sprawling Cape Girardeau County plant.

The Cape Girardeau County Commission voted unanimously on March 20 to issue the bonds and provide 25 years of property tax breaks, but voiced dismay that the Missouri Department of Natural Resources still hasn't granted the necessary air-quality permit for the project to proceed.

"This is a foot-dragging exercise again by DNR," said Gerald Jones, presiding commissioner, during the commission's meeting at the Cape Girardeau County Administration Building in Jackson.

DNR officials "don't want any smokestacks," Jones said.

"At this point, we are hopeful we will get the permit in time," said Michael Jannewein, human resources manager at the P&G plant on Highway 177.

He said the company hopes to obtain the final permit by late April or early May.

P&G plans to built a new paper machine that would boost the facility's tissue- and towel-making capacity by 80,000 tons a year. The new machine could be in operation by July 2004, Jannewein said.

Jones said the commission's willingness to issue bonds and tax breaks was key to securing the plant expansion. Without such financing, P&G likely would have decided to locate the new equipment in Albany, Ga., he said.

Under the financing agreement, the bonds will be retired by P&G over 25 years, during which time the company will receive property tax breaks. At the end of that time, the new equipment will be taxed on 100 percent of its taxable value.

With the tax breaks, P&G will pay $41,046 in property taxes on the new equipment the first year and more in succeeding years, reaching $260,233 in the final year of the agreement, Robinson said.

Jannewein said P&G won't have to hire more workers because of plant expansion. He said efficiency gains will free up staff for the expanded operations.

The plant currently employs 1,450 people, making it one of the largest employers in the region.