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Tate & Lyle guts work force at FD facility

By Staff | Apr 3, 2009

Tate & Lyle has announced layoffs at its facility west of Fort Dodge.

In all, 56 of the plant’s 90 employees were laid off Thursday, said Chris Olsen, director of community and government relations for Tate & Lyle.

Most of the layoffs were immediate, though a few of these employees will remain on the job until June 3, Olsen said. Employees will continue to draw salary until June 3.

According to Olsen, 20 employees will be retained to preserve the plant’s equipment and prepare for an eventual startup. The remaining employees will be transferred to other Tate & Lyle facilities, he said.

The corn wet milling plant was scheduled for completion this month, with planned production of 100 million gallons of ethanol and 300 million pounds of industrial starch per year, using 150,000 bushels of corn daily.

Ground was broken for the plant in September 2006.

Nearly three years and $260 million later, construction screeched to a halt on March 18 – the result, said Olsen, of market conditions for ethanol.

On March 18, Olsen told The Messenger that there were no plans to lay off employees.

However, Olsen said that additional evaluation determined the staffing needs to maintain the plant and preserve the equipment therein.

He said that Tate & Lyle remains committed to the Fort Dodge facility and will begin production when market conditions improve.

“Tate & Lyle has attracted an excellent work force in Fort Dodge,” Olsen said. “We hope than when the plant activity starts again, we’re able to attract as many of these people back to work as we can.”

Employees were informed of the layoffs at around 10 a.m.

By Thursday afternoon, a group of the plant’s former process technicians had gathered at Community Pizza & Tap in Fort Dodge.

One man said he had left a well-paying job to work for Tate & Lyle. Others said they hoped they would eventually be called back to work at the plant and that, overall, the company had treated them well.

Mothballing the plant could cost Tate & Lyle more than lost production.

More than $1.5 million in loans from the Iowa Department of Economic Development are contingent upon creating jobs.

In July 2006, the IDED approved an incentive package for the plant that included:

  • $1 million in Community Economic Betterment Account loans, of which $500,000 is forgivable;
  • A $250,000 Physical Infrastructure Assistance Program forgivable loan;
  • $300,000 in Value Added Agricultural Products and Processes Financial Assistance Program loans, of which $200,000 is forgivable.

If at least 100 workers aren’t employed at the plant by July 31, Tate & Lyle will be obliged to prorate the money back to the IDED, said department spokeswoman Erin Seidler.

Tate & Lyle also received High Quality Job Creation tax credits, for which the contracts will be reviewed in 2011, Seidler said.

A $1 million road – now known as Harvest Avenue – that runs from Iowa Highway 7 to the Tate & Lyle facility was funded in part by a $600,000 grant from the Iowa Department of Transportation’s Revitalize Iowa’s Sound Economy grant program.

The grant was based on $6,000 per job for 100 jobs. Tate & Lyle agreed to indemnify Webster County if 100 jobs were not created.

In September 2006, Webster County also approved a 10-year tax abatement for the project, in which the value added by the project to the property is exempt from taxation.

Putting the Tate & Lyle project on hold hurts, said Phil Condon, chairman of the Webster County Board of Supervisors.

In a press release, Fort Dodge City Manager David Fierke highlighted the positive impact construction at Tate & Lyle has had on the local economy.

To wit, construction has put more than $30 million into Webster County businesses and more than $110 million with Iowa businesses, according to Fierke.

“While we are disappointed that any area resident might be impacted, we are encouraged by the continued presence Tate & Lyle will maintain,” Fierke wrote. “There will be 20 more employees at the site than there were two years ago.”

Phone messages for John Kramer, president of the Development Corporation of Fort Dodge and Webster County, were not returned Thursday.

Contact Jesse Helling at (515) 573-2141 or jhelling@messengernews.net

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