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VOL. 126 | NO. 124 | Monday, June 27, 2011

Kruger Set for IDB Mtg.

By Andy Meek

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Canada-based manufacturer Kruger Inc. is one step closer toward a major investment in its Memphis facility north of Downtown.

A subsidiary of the company, which is a major producer of publication papers, tissue, lumber and other wood products, will appear before the Memphis-Shelby County Industrial Development Board Tuesday, June 28, to apply for a 15-year tax freeze.

The IDB’s special meeting to consider the project will be held at 2 p.m. at City Hall, 125 N. Main St.

The application by Kruger subsidiary KTG (USA) LP reflects the possibility of a $300 million investment at its current Memphis facility. The company says its “major commitment to Memphis” will include constructing a new building and buying new equipment to make the manufacturing process cheaper and more energy efficient.

Kruger operates facilities in Quebec, Ontario, British Columbia, Newfoundland and Labrador, and Memphis. The Kruger Products Mills in British Columbia, Quebec and Memphis have a combined papermaking capacity that represents 37 percent of Canada’s total installed tissue manufacturing capacity.

Kruger’s capital investment will let the Memphis plant increase its production capacity. The site produces household tissue products, including the White Cloud brand and premium private-label brands.

In documentation submitted to the IDB, the company said it’s considering numerous sites for the project, including Quebec, Canada, and “other U.S. locations which have offered generous incentives.”

“Tax incentives are very important to the comparison of choices and to keep the future business competitive in the marketplace,” the company wrote. “If the project happens in Memphis, Kruger will create 100 new jobs that will pay more than $67,000 per year, including benefits, and will retain 294 existing jobs.”

If Memphis lands the project, it will have come thanks to some of the same ingredients that sealed the deal for two other recent major foreign investments in the city.

Both Memphis and Shelby County mayors, in addition to officials from the Greater Memphis Chamber, have worked hard to woo Kruger, just as they did with Swedish appliance maker Electrolux as well as Mitsubishi Electric Power Products Inc. Electrolux decided to bring its North American cooking products manufacturing center to Memphis, and Mitsubishi is building a major transformer-producing facility here.

As with those projects, there is intense competition for the Kruger investment.

Earlier this year, the Montreal Gazette reported Tennessee was “ready to offer an incentive package” to encourage Kruger to install new machinery at its Memphis plant. The paper also reported a Canadian development agency was talking with Kruger about instead financing a new machine at its mill north of Montreal – a roughly $100 million project.

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