Ergon to expand, add about 50 jobs
Published 11:43 am Tuesday, September 18, 2012
Ergon Refining announced a $147 million expansion Monday and received property tax breaks that could be worth millions.
The specialty oils refinery plans new buildings near the Bunge-Ergon ethanol plant at the Port of Vicksburg and upgrades at its main refinery that will allow the company to process more diverse types of crude, Kevin Watson, Ergon’s attorney, told Warren County Board of Supervisors.
If completed, the new laboratories and research and development facilities would enable Ergon to refine more types of crude oil for chemical processes in which the company already specializes, such as for electrical transformers and tires.
“Instead of running maybe 1 or 2 percent of the world’s crude resources, maybe we’d have the flexibility to run up to 5 or 10 percent,” Watson said. “We think that’ll keep the refinery very competitive.”
The first phase, a new administrative building and the first lab, both near the ethanol plant, could start in October or November, Watson said. Direct jobs created by the expansion will be six to 10, project documents said. Indirect construction jobs could be more than 40, Watson said. The company employs about 783, with about 221 in Warren County.
Supervisors and the Vicksburg Board of Mayor and Aldermen supported a fee-in-lieu of property taxes once the investments hits $100 million, expected in 2014, according to documents approved by each board. Once in effect, the fee equals one-third of real and personal property taxes for 10 years. Board attorneys for the city and county did not see the proposals until late Friday. Hence, the city approved the deal pending more legal review.
The deal is structured much like a fee-in-lieu intent approved for Ergon in 2006 for the ethanol plant. Details worked out four years later once construction costs hit $100 million had the company paying one-third the assessed value of the facility it runs with Bunge North American. The fraction worked out to $80.7 million instead of the full assessment. In August, county officials discovered about $13 million tied to the plant’s personal property, or inventory not fixed to land, was assessed twice by mistake but wasn’t taken off the tax rolls until after the 2011-12 budget was set.
It differs in the timing. Documents approved Monday spell out a faster track without the company having to spend $100 million first. Watson said the company needed to nail down the lower tax before it broke ground.
“It’s shovel-ready and it’s a phased project,” he said.
District 3 Supervisor Charles Selmon was the lone supervisor to raise a concern, saying the notice of the deal was too short for county officials, including the tax collector and tax assessor. The final vote was unanimous in support of the fee-in-lieu agreement.
“I don’t have a problem voting for it,” Selmon said. “But, I think it’s just that the tax assessor and tax collector need to know what’s going on.”