CJ Bio America expands
As CJ Bio America enters its fifth year in Webster County, the company is preparing for a $51 million expansion project to begin producing a new product.
CJ Bio America will begin producing L-Threonine, which is an amino acid used as an additive in livestock feed, the company announced in January.
The plant in the industrial park west of Fort Dodge called Iowa’s Crossroads of Global Innovation already makes the amino acid lysine, which is used in feed for poultry and swine. The plant also makes liquid fertilizer.
The news was celebrated by area economic development leaders when plans were first announced in November.
“This is very good news to reinforce the attractiveness of what the city and county have built out there,” said Dennis Plautz, chief executive officer of the Greater Fort Dodge Growth Alliance. “This is exactly what we were looking for, and are continuing to look for.”
The Webster County Supervisors agreed, voting to provide tax rebates to encourage the project.
“It is a big announcement, and a big expansion for them,” said Supervisor Merrill Leffler. “It’s really exciting. It’s basically what we built the ag park for.”
The new initiative will lead to jobs being created in production and production support, according to Luke Palmer, the company’s general affairs manager.
The initial output of L-Threonine will be 20,000 metric tons, according to an announcement from the company. Palmer said the L-Threonine will be in powder form.
In November CJ Bio America was awarded about $1 million in tax credits from the Iowa Economic Development Authority, a factor which Palmer said was key in bringing the expansion to the area.
“Everything we asked for was awarded,” said Plautz. “That was a necessary part in their decision to do the expansion here versus at one of their other facilities, which would have been offshore.”
Tax credits have been promised under the High Quality Jobs Program, including:
• An investment tax credit of $500,000 over five years;
• Refund of sales and service taxes during construction of about $399,930;
• Supplemental research activities credit of $1,500.
The expansion is planned to create 18 jobs. About 180 people work there currently.
Also in November the Webster County Board of Supervisors pledged to provide tax rebates for three years on the expansion’s property tax — an incentive estimated at $822,888 total.
The county will provide its incentive through tax increment financing, rebating a certain percentage of taxes back after they are paid for three years, estimated at $274,296 a year.
This is similar to what the county has done in other situations. It had similar TIF agreements with Cargill and CJ Bio when the plants were first built, Leffler said.
The details of the rebates aren’t set in stone yet, and the county will put together a development agreement once the property is assessed and the project moves forward.
Some new facilities will be needed to produce the L-Threonine.
“We will build additional structures that will hold additional processing equipment,” Palmer said.
He said the new buildings will be on land the company already owns. They will be located south of the existing plant. Palmer said the plant site was designed to make expansion possible.
Having an international company like CJ in Fort Dodge is a big deal, said Leffler.
“To have them pick us over other places to bring products, or to manufacture products, is a big deal for Fort Dodge,” he said. “I’m still optimistic over the years we will see numerous companies and projects out there.”
L-Threonine production is expected to start in mid-2019.
CJ Bio America is part of CJ CheilJedang, based in South Korea.
The local plant takes dextrose from the nearby Cargill plant and uses it to make its products.
Production at the plant began on Nov. 1, 2013.
The existing plant, which is the company’s first production facility in North America, cost about $323 million. The upcoming expansion will boost the company’s local investment to about $400 million.