Procter & Gamble Co. on Wednesday announced that it will build a paper-products manufacturing plant in unincorporated Box Elder County.
Procter & Gamble Family Care said the facility will include a new paper machine, converting lines and warehouse space. Groundbreaking is expected in early 2008 with the new paper machine starting up in early 2010.
The Box Elder county plant is expected to be about an initial $300 million investment with approximately 300 employees.
"Utah is proud that Procter & Gamble has chosen to locate its newest manufacturing plant here," Utah Gov. Jon Huntsman Jr. said in a prepared statement. "It's been an honor for me over the past several months to get to know many from the P&G team. I look forward to officially welcoming one of America's top corporate citizens to the state of Utah."
"Procter & Gamble is excited to be joining the community of Box Elder County, Utah," Mary Lynn Ferguson-McHugh, president of P&G Family Care, said in a prepared statement. "We are looking forward to working in partnership with this community for a long time. This facility will increase the number of skilled jobs available in northern Utah while enabling P&G to better serve consumers in western U.S."
The announcement came eight days after the Governor's Office of Economic Development Board approved a potential $85 million tax-rebate incentive to try to land the plant, which could have 1,000 employees a decade from now.
Members of the Governor's Office of Economic Development Board said last week that Utah was competing with at least two other states for the company's operations, which are expected to ramp up to 500 employees 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 are more than twice the county median of $21,694.
State documents indicated the plant 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.
Board Chairman Ragula Bhaskar said last week that P&G also was considering adding capacity at plants in Missouri or California rather than constructing a Utah facility.
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 will top $400 million. Over 20 years, they are expected be more than $1 billion.
The state incentive, approved at a special board meeting, will 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 will be required to commit to keep the operations in Utah at least 20 years.
Box Elder County had been working on a local incentive in the form of refunding incremental property taxes for up to 20 years.
Utah's incentive for P&G is the largest the state's history. The previous high was approved in March 2006 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.
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.
Procter & Gamble Family Care currently has five manufacturing sites in the United States: Albany, Ga.; Cape Girardeau, Mo.; Green Bay, Wis.; Mehoopany, Pa.; and Oxnard, Calif. The Box Elder County plant will be the first new Family Care manufacturing facility in the U.S. since Oxnard began operation in 1973, the company said.
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.
E-mail: bwallace@desnews.com