A state board put out Tuesday a potential $85 million tax-rebate incentive to try to land a 1,000-employee Procter & Gamble Co. manufacturing plant in unincorporated Box Elder County.
Members of the Governor's Office of Economic Development Board cautioned that Utah is competing with at least two other states for the company's operations, which would open with 300 employees and ramp up to 500 by the year 2012, 900 by 2018 and 1,000 by 2028.
The state incentive is tied to employee pay, they said, although projected wages would be more than twice the county median of $21,694.
State documents indicate the plant would be the first new location for the company in more than 30 years and would represent a $540 million capital investment, including $315 million in the project's first phase.
The facility would be in a current "greenfield" site and would be part of P&G's paper products division, which produces Bounty paper towels, Charmin toilet tissue and Puffs tissue.
"It is anticipated that other divisions would locate production facilities to the site over time," board documents state. "It would also be expected that a number of supporting businesses would relocate to Utah to support the new plant."
Board Chairman Ragula Bhaskar said a decision on the possible location in Box Elder County hasn't been made. He noted that P&G also has the option to expand capacity in Missouri or California.
"The work is not done yet. ... Now it is in P&G's hands to make a decision," he said.
"It really is an amazing thing to have a company like this exploring the state of Utah," said Jason Perry, executive director of the Governor's Office of Economic Development. "We'd be happy to have them here."
If Utah becomes the plant's site, new state revenues are expected to be more than $98.5 million over 10 years and $280 million over 20 years, according to board documents. New state wages over 10 years would top $400 million. Over 20 years, they would be more than $1 billion.
The state incentive, approved at a special board meeting, would be a tax rebate of half of new state revenue for the first five years the plant is operating, then lower percentages over the remaining 15 years of the incentive. The net incentive is 30 percent of new state revenues, or about $85 million. The company would be required to commit to keep the operations in Utah at least 20 years.
Box Elder County is working on a local incentive in the form of refunding incremental property taxes for up to 20 years.
Bhaskar noted that economic development officials had been working on the project for more than two years. Perry said negotiations featured Gov. Jon Huntsman Jr.'s direct involvement.
"Congratulations to everybody," board member Gerald Sherratt said. "You've done a great job. I hope this works."
Cincinnati-based P&G has more than 138,000 employees in more than 80 countries and provides products and services to people in more than 180 countries, according to the company's Web site.
The incentive approved Tuesday is the largest the state has ever offered. In March 2006, the board approved a tax rebate for IM Flash Technologies LLC's headquarters in Lehi. The incentive was estimated at the time to be about $15 million. It involved a rebate of up to 30 percent of new incremental state revenue over a five-year period after the plant is operating.
P&G, founded 170 years ago this month, had revenue of $76.5 billion, operating income of $15.45 billion and net income of $10.34 billion for the year ended June 30. During the fiscal fourth quarter, the company reported revenue of $19.3 billion, operating income of $3.4 billion and net income of $2.26 billion. It has 23 brands that each generate more than $1 billion in annual sales and 18 brands with sales between $500 million and $1 billion.
Overall, the company has nearly 300 brands. In press materials, it notes that its brands "touch the lives of people around the world" three billion times a day.
The company's market capitalization is more than $200 billion, making it the seventh most valuable company in the country and 13th-ranked in the world.
The company's chairman and chief executive officer, A.G. Lafley, said at a shareholders meeting Tuesday that the company is "designed to grow for the short, mid- and long term — consistently, reliably and sustainably."