State Representative Dudley Spade announced on Tuesday that the Michigan Economic Growth Authority (MEGA) Board approved a Retention Employment Tax Credit for Wacker Chemical Corporation (WCC) in Adrian valued at $4,413,371 over 10 years. The chemical producer plans to consolidate its South Carolina operations to the Adrian facility. The project is expected to result in $23.7 million in investments and retain 156 jobs. Michigan competed with China for this project.
“Anytime you have fruitful and close cooperation between a business — in this case Wacker Chemical — and state and local governments, and local agencies such as the Lenawee Economic Development Corporation, I think positive results can be achieved,” said Bill Toth, Corporate Communications Manager at Wacker Chemical. “In this case, with the receipt of the MEGA tax incentive and property tax abatement support we received from Raisin Township, Wacker now has additional supports, incentives that we can apply toward capital investment, infrastructure improvement, job creation, and certainly to retain existing jobs.”
Toth said locally, 156 jobs are directly related and focused on production of the silicones, fluids and emulsions portion of the business.
“I would like to commend Wacker Chemical and the MEDC Board for taking the necessary steps to keep jobs here in Michigan and Lenawee County,” Rep. Spade said.
“The MEGA Board has been an integral part in keeping the businesses that have long called Lenawee home right here where they belong,” Spade said.
The Duncan, South Carolina textile fluids manufacturing facility is scheduled to close and its operations will be consolidated within the company’s global infrastructure. This facility is the largest textile manufacturing site for the Wacker Silicones division in the U.S. producing processing aids and finishes for the paper and fabric industry. The Adrian facility is under consideration for the consolidation as well as more modern facilities in China and Germany. Toth said an ongoing transition process already has begun.
Currently, the Adrian facility only produces batch quantities of its products and would require a large investment in automated manufacturing machinery and equipment as well as infrastructure upgrades to accommodate a higher volume of fluids manufacturing.
WCC plans to invest approximately $23.7 million and retain 156 jobs over the next five years as a result of this project. The effect on other Michigan businesses in the same industry was taken into consideration when recommending the amount and length of this tax credit. The Michigan Economic Development Corporation will recommend support for a 12.5 percent Small Brownfield Redevelopment MBT credit valued at $1.12 million for eligible investments associated with this project.
Toth said the company is pleased to be able to continue its relationship in Lenawee County and Raisin Township.
“We have been in Lenawee County quite a long time, dating back to 1965 or so while under former ownership,” said Toth. “We’ve had some presence on this Sutton Road site dating back to the mid-60s, and with the current ownership from the mid-1980s, so we’ve had a Lenawee County presence for quite some time.”
Dr. Ingomar Kovar, Wacker Chemical Corporation President and CEO, said the $4.4 million Michigan Economic Growth Authority Tax Credit is a key business development incentive for the company. “And in conjunction with the additional fine support received from the Lenawee Economic Development Corporation, Raisin Charter Township and United Steel Workers Local #7237, the company is in very good position to further develop and expand its Adrian, Michigan operations,” said Dr. Kovar. “I would like to especially recognize the guidance and cooperation received from the LEDC, Raisin Charter Township, for their ongoing support and granting Wacker a 12 year 50 percent property tax abatement on future and infrastructure development, and credit the United Steel workers Local #7237 for the early and fruitful negotiations and successful ratification of our new contract. We are extremely pleased with being awarded the $4.4 million MEGA tax credit and appreciate the steps involved to accomplish receiving it.”