Manufacturer K.T.G. plans to expand its Memphis operations, investing more than $21 million in a facility expansion, new equipment and the creation of 36 jobs. The business manufactures facial tissues, bath tissue and other related products.
The company filed an application with the Economic Development Growth Engine (EDGE) for Memphis & Shelby County for a six-year PILOT (payment-in-lieu-of-taxes). The new jobs will pay an average annual wage of $54,185. K.T.G currently employs 500 at its Memphis facility and is a top 10 local manufacturing employer, according to MBJ research.
The tissue manufacturer is seeking a tax incentive of $929,734 over six years in order to create a new facial tissue production line at its facility at 400 Mahannah Ave. The analysis of the application by EDGE said the project will have a total economic impact of more than $38 million.
“K.T.G.’s Memphis operation has experienced tremendous growth across the last 10 years”, the company said in its PILOT application. “The company would like to modernize by adding new equipment to convert paper used in existing and new products. This new converting asset is necessary to serve growth with existing customers and, more importantly, to secure new customer contracts”.
The company took over the old Kimberly-Clark plant in 2002 and has since added a new paper machine and production lines. The company said it is ready to move forward with the expansion if the incentive is approved.
K.T.G. is a subsidiary of Canadian tissue manufacturer Kruger Inc., and has nine manufacturing facilities in North America, employs 2,700 companywide, and generates more than $1.2 billion in annual sales.
In the Nov. 12 earnings call, KP Tissue CEO Dino Bianco noted the Memphis expansion will add a new facial through-air-dry (TAD) tissue line to complement the company’s operations in Quebec and help it improve its position in the market. Bianco said the Memphis operation was hit harder than other locations with labor shortages related to the pandemic.
KP Tissue holds a 14.5% stake in Kruger Products LP (KPLP), the top tissue products supplier in Canada; and KPLP owns K.T.G. (USA), the name of the Memphis manufacturing operation.
The EDGE board will consider the PILOT request during a meeting on Nov. 17.