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VOL. 129 | NO. 180 | Tuesday, September 16, 2014

Cargill to Close Memphis Corn Mill

By Amos Maki

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Cargill Inc. will close its Memphis corn mill in January, a move that will impact 440 employees.

The company said the closure of the facility resulted from the underutilization of the Memphis plant on Presidents Island and its location far away from the Corn Belt. The nearby corn oil refinery that employs 28 people will remain open and operate as a standalone facility, Cargill said.

“The decision to close our Memphis corn milling facility was made only after a careful examination of the current business situation and we examined all other possible options,” said Julian Chase, president of Cargill Corn Milling, in a statement.

“This was a difficult decision to make because we have an excellent team of employees in Memphis,” said Chase. “It is unfortunate that we must close any plant because of the impact to good people, their families and the community.”

The roughly 400 employees who will be impacted will be offered opportunities at other Cargill locations in the region. The company will provide assistance to employees who relocate to positions at other Cargill facilities and support, including interview and resume writing training, for displaced employees.

In July, Cargill announced it would invest $45 million to build a grain handling and shipping facility in West Memphis. Cargill said that project had no impact on the decision to close the Memphis mill.

Mark Herbison, senior vice president of economic development at the Greater Memphis Chamber, said he was confident the organization and its partners could help Cargill employees who lose their jobs find new work.

“Our main focus right now is on the employees,” said Herbison. “We have a bunch of companies looking for people and we’re bullish on the fact that we can place these Cargill employees with other companies looking for people.”

Herbison, along with other chamber executives, Memphis Mayor A C Wharton Jr., Shelby County Mayor Mark Luttrell and staff with the city-county Economic Development Growth Engine met with Cargill officials Tuesday, Sept. 16, and were informed of the pending closure.

Herbison said Memphis’ distance from the corn-producing states in the Midwest and the decline of the high-fructose corn syrup market made the Memphis plant a target for closure.

“It was a perfect storm of events,” said Herbison. “They were shipping 60 million bushels a year down here so there was an added cost. When the market was good that was OK, but now that the market has collapsed it doesn’t make any sense for them to do that.”

In 2010, Cargill was granted an eight-year payment-in-lieu-of-taxes incentive for a $72 million upgrade and to retain 370 employees. The full PILOT was expected to save the company $11.5 million.

Herbison said Cargill will not face a penalty for closing the mill before the end of the PILOT term and that market forces can outweigh incentives when it comes to corporate decision making.

“It just goes to show how market forces and company revenues really drive these business decisions,” said Herbison. “They couldn’t make it work financially even with the incentive.”

Herbison said the chamber would immediately begin marketing the Presidents Island location as a manufacturing site.

“With access to three railroads, the interstate system and the airport, it’s a premium site we’ll be able to market,” said Herbison.

PROPERTY SALES 79 321 2,586
MORTGAGES 90 426 3,033
BUILDING PERMITS 153 796 6,864
BANKRUPTCIES 37 213 2,000