Mobiles industrial development board has cleared the way for Bayer CropScience to invest an estimated $120 million in a co-location project alongside Evonik Corp., a scaled-back version of a much larger manufacturing plan the German chemical giant first floated for the citys chemical corridor more than two years ago.
The board approved tax abatements Thursday totaling roughly $15.2 million, split between $8.8 million in sales and use tax relief that expires once the project becomes operational and $7.4 million in ad valorem tax abatements spread over 10 years. Mobile County Public Schools are still expected to collect an estimated $7.3 million in education taxes over that same decade-long abatement period.
Troy Wayman, vice president of economic development for the Mobile Area Chamber of Commerce, characterized the approval as a sign of the citys pro-business approach to economic development, saying it gives Bayer a presence in the Mobile area that could pave the way for future growth similar to what Evonik has experienced locally.
The project represents a significant scale-down from Bayers original ambitions in Mobile. The company initially proposed building a stand-alone global herbicide production facility in the area that would have employed 180 workers and represented a total investment of about $396 million. Within months, that projected investment climbed to roughly $500 million as Bayer sought to expand supply chain capacity amid surging industry demand for herbicides effective against glyphosate-resistant weeds.
Rather than build a freestanding mega-plant, Bayer ultimately opted to co-locate with Evoniks existing Mobile operations, relying on a chemical Evonik produces to help manufacture the herbicide — marketed in the U.S. under the brand name Liberty — at other Bayer facilities already in operation elsewhere. Because of that structure, the roughly 20 jobs created by the project will technically be classified as Evonik positions rather than direct Bayer hires, though Wayman said he remains hopeful the arrangement signals Bayers longer-term commitment to the region.
This gives Bayer a presence in our community, Wayman said. Theyre one of the biggest names in the international chemical industry, and we hope it provides an opportunity for future growth.
The co-location approach is becoming increasingly common within the chemical industry, according to Wayman, and Bayer will be the second major chemical company in as many years to take that route in Mobile. In June 2013, the same industrial development board approved similar tax abatements for BASF Corp. to construct an $84.3 million facility on land within Evoniks Degussa Road complex.
The Bayer project is expected to be completed before the end of 2015, adding another chapter to the ongoing growth of Mobiles chemical manufacturing corridor, which has increasingly become a magnet for international chemical firms looking to expand their U.S. supply chains alongside established local partners.