Tate & Lyle repays $1.42 million in incentives

By Holly Jessen | July 15, 2010
Posted Aug. 26, 2010

Tate & Lyle plc has repaid $1.42 million in state money it received as in incentive for building its ethanol plant in Fort Dodge, Iowa. The company halted construction just short of completion in March 2009 and announced this spring that start up would not be completed.

The money was returned in advance of the Department of Iowa Economic Development meeting Aug. 19, said Kay Snyder, department spokeswoman. The company asked to end the contract after it was unable to live up to its end of the bargain, which was to create 100 jobs with average salaries of $23.54 an hour, including benefits.

As with every project, the department always hopes to see success, growth and expansion, Snyder said. However, Tate & Lyle had indicated that market conditions led to the company's decision not to complete the project. "We understand that that is part of business as well," she told EPM.

In May 2009, the company paid the state $127,875 to continue the contract with the department. "At that time we were still evaluating the markets for ethanol, industrial starch, and coproducts," said Chris Olsen, vice president of community and government affairs for Tate & Lyle. "So continuing the state contract was done to keep as many options as possible open until a decision could be made."

Other local incentives were combined with the state incentives to bring the ethanol plant to Fort Dodge. Tate & Lyle is also working with local officials on that issue. "Since we have no specific timeline to restart or implement another alternative, we are working on solutions for each of the incentives that balance the interests of the state and local taxpayers and the company," Olsen said.

The company still employs seven people at the plant. Their job, Olsen said, is keeping the plant in the best possible condition through maintenance of the installed equipment and the facility. As was the case this spring, Tate & Lyle still doesn't know what it will ultimately do with the plant. "We are still evaluating options to determine what alternative provides the best shareholder value," he said.

If completed, the Fort Dodge plant would have been the company's second. It operates a 60 MMgy ethanol plant in Loudon, Tenn.