DuPont Tate & Lyle, the major corn-based products company in Loudon, is planning a 30 percent expansion in production, provided the company's board of directors gives its approval to the plan, according to Loudon County Economic Development Agency President Pat Phillips.

The Loudon plant produces propanediol from corn sugar. This is a relatively new product that can replace petrochemicals with renewable resources like fiber from corn. DuPont developed the technology to manufacture propanediol, or PDO, using a fermentation process based on corn sugar, a renewable resource.  PDO is a key ingredient in Sorona polymer which is used for fibers and fabrics, films, filaments, engineering resins and other products.

At Thursday's meeting of the Loudon County Economic Development Agency, Phillips updated members on the company's expansion plan and what it might mean for local tax revenues. 

The plan is for the plant to expand the facility to increase capacity by approximately 30 percent, pending the approval of the company's board of directors, which company officials said is expected. That approval would mean more money for the expansion to the plant which has cost over $100 million since its inception in 2004. This expansion is considered Phase I and a Phase II is possible.

The expansion would not only increase capacity at the plant but would also represent a $30 million investment by the company that would result in five more employees at the plant in addition to 113 people being indirectly employed for the construction and engineering of the expansion. The company's officials have estimated the construction would be complete in 21 months. 

The expansion would require a minor source permit from the Tennessee Department of Environment and Conservation (TDEC). Phillips said the company also plans to hold a public meeting to answer any questions the public has about the expansion and what it would entail. "This would not be a TDEC meeting," Phillips told the agency members adding the meeting would be held in the interest of keeping the public up to date. 

The company has requested a tax abatement to off set the cost of the expansion - a common practice these days as states and counties vie for jobs. Phillips said the focus of every community is the "retention of existing jobs and creating new ones" and tax abatement was one tool with which to do that. He also said there are global forces at work that offer companies the opportunity to move their operations overseas where labor is extremely cheap.

He also noted that moving corn for the plant is better done by rail which puts Loudon County at a disadvantage. Phillips said these disadvantages make it imperative that the county and the City of Loudon offer tax abatement to keep companies here and to bring in new ones. He recommended the company be given a 50 percent tax abatement over five years. 

With the expansion valued at $4,381,875 in real property and $15,441,810 in personal property, anticipated tax revenues for five years for the county would be approximately $370,628 and $240,093 for the City of Loudon. A tax abatement of 50 percent for five years would result  in the county receiving approximately $185,314 total for five years and the City of Loudon receiving $120,046 total for five years. The annual combined total payment in lieu of tax would be $61,072 per year for five years. When the five years is up, the company would return to regular tax rates. "That's a pretty good deal," observed Harvey Sproul, former county attorney and an agency member. Phillips reiterated such arrangements are the price of getting and keeping jobs in this economy. 

Phillips also said if the first phase of the expansion is a success it could lead to a second phase and another expansion. He said if a second phase should come to pass his agency would recommend another 50 percent tax abatement at that time.

The agency board voted in favor of supporting the tax incentive.