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Canadian Firm Kruger Considering $312 Million Expansion of Its Memphis, TN, Facility; 100 Jobs May be Created

06/29/2011
About 100 new jobs could be added to Kruger Inc.'s 294-person workforce in Memphis, TN, if the company decides to go ahead with plans for a $312.5 million expansion of its North Memphis tissue mill. The project might be given a green light now that the Memphis-Shelby County Industrial Development Board (IDB) has approved major tax incentives for the company.

IDB awarded a 15-year payment-in-lieu-of-taxes (PILOT) abatement giving Kruger savings of $45.4 million in county and city taxes. The company will pay $55.6 million in taxes throughout the term of this PILOT incentive; its third. Previously the company received a PILOT incentive (runs through 2015) to open its facility in 2002; it invested $35 million to buy/restart an existing mill onsite. The second PILOT in 2005 (runs through 2013) is associated with Kruger's investment of $40 million to double capacity at the facility to 100,000 tons a year.

Based in Montreal (Quebec), Canada, Kruger is a pulp and paper company that manufactures and sells newsprint, lightweight coated paper, recycled linerboard and related products. The Tennessee mill--the firm's only U.S. location--manufactures paper towels, bathroom and facial tissues, and other household tissue products.

The expansion's $312 million investment would be used to construct a new building at the existing mill's location; and to buy and install new energy- and cost-efficient machinery. Once begun, the project will take about a year-and-a-half to complete, said company officials, who also asked for a three-year timeframe to meet its wage, job and investment goals. It's estimated the annual average wage for Kruger's new (and existing jobs) would be $53,600 per year--or $67,000 with benefits.

In early June, it was reported that union workers at the Memphis mill have approved a new seven-year contract with a potential three-year extension. Union officials said the contract is contingent upon the company's investment of state-of-the-art production equipment at its downtown Memphis facility.

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