Tonganoxie closing in on $52M deal for a pet food ingredient plant that will pay average wages of more than $70K
photo by: Submitted photo
Some people on the coasts say Kansas is flyover country. Perhaps, but if dogs ran the world, I think there is a chance that we might be the Florida of the canine universe. If that were so, Tonganoxie might be making its play to be Orlando.
Eastern Kansas has a lot of pet food plants, and now nearby Tonganoxie is poised to become a bigger player in the industry. The city of about 5,500 people northeast of Lawrence is being asked to approve a package of economic development incentives for a $52 million project by a Dutch company that wants to build an ingredient plant for the pet food industry.
DSM Nutritional Products is proposing to build a 65,000-square foot plant that will primarily produce vitamins that will be used in the pet food industry. The plant will be next door to a 300,000-square foot pet food plant that Hill’s Pet Nutrition is in the process of opening in the Tonganoxie Business Park.
Company officials said they chose Tonganoxie after looking at about 20 sites in the greater Topeka and Kansas City area because there are so many pet food manufacturing plants in the area.
The most I know about pet food is that a lack of it in a certain bowl causes me to be awakened at 5 every morning (to eliminate any confusion, that is by my dog), so I’m sure to miss some companies in this list of area firms.
Hill’s has pet food plants in Topeka, Emporia and soon in Tonganoxie, where it ultimately will employ about 80 people in its $325 million plant. Simmons operates a massive plant in Emporia that employs about 1,500 people making wet cat and dog food, and the company recently opened a plant and distribution center in Edgerton. Topeka also got a new pet food plant last year when Honest Kitchen opened a 100,000-square foot plant there.
Of course, hopefully your pride in Lawrence constantly reminds you that our city is home to the Kibbles ‘n Bits dog food brand. (Surely there is a festival to be created that pits Kibbles fans versus Bits fans and ends with a beer garden on a downtown street, as all local festivals are required to do.) The pet food plant has long been located at 727 Iowa St., and has had many owners over the years. As we reported in March, St. Louis-based Post Holdings Inc. bought the plant this year from the J.M. Smucker Co.
All of that has been attention-getting for DSM, which is a publicly traded company in the Netherlands that touts itself as one of the largest ingredient companies in the world.
The company hopes to have its Tonganoxie plant operating by the second quarter of 2025. Plans call for the plant to employ 28 people. The company is highlighting that the jobs will pay an average wage of $72,000 a year. A company leader recently told the Tonganoxie City Council that entry-level positions are going to pay above average wages, as well.
“I can promise you that if you have a son or a daughter that wants a job even as an operator driving a forklift it will at least pay $50,000,” said Lance Collard, a DSM plant manager who will be moving from Fort Worth, Texas, to run the proposed Tonganoxie facility.
To get the deal done, DSM is seeking a package of financial incentives that includes about $5 million in property and sales tax breaks to build the $52 million plant
Tonganoxie City Council members took no action on the incentives request on Monday, but did get their most detailed look yet at the proposal. The plan calls for DSM to receive a 70% property tax abatement for 10 years. The project is expected to generate about $3.5 million in property taxes over the 10-year period. Under terms of the proposed deal, the company would pay about $1 million of those property taxes, while the remaining $2.5 million would be forgiven.
The company also would be exempt from paying sales taxes on construction materials for the plant, which is expected to produce another $2.5 million in tax savings.
Tonganoxie City Manager George Brajkovic said discussions with DSM are proceeding well, but the development agreement that spells out benchmarks the company must hit to receive the incentives was still being drafted. Brajkovic recommended that the council wait on any approvals for the incentives until that document can be presented to the council. He said council members will have that document by their next meeting on June 19.
Council members opened a public hearing on the incentive request, which technically will require the city issuing $47 million in industrial revenue bonds. That hearing was continued until June 19. No one from the public spoke for or against the project on Monday.
Brajkovic, who is a former economic development leader for Wyandotte County, sounded an optimistic tone about the project. He’s among a group of Tonganoxie leaders who have toured DSM facilities, and he said the company has a good track record of low employee turnover and high-tech facilities.
“It makes us excited to get this project to this point because we think it is not only a good fit for the business park but for the community itself,” he said.
As part of its economic development program, Tonganoxie targets animal food companies by offering an extra 5% tax abatement for firms in that industry. Brajkovic noted that the Tonganoxie Business Park that will house the project — it is on the south end of the city and the area closest to the Kansas Turnpike interchange — still has a couple of lots left for development.
So, we’ll see if the idea of Tonganoxie becoming a pet food hub takes further hold. If so, I’ll begin work on training my dog to wake Tonganoxie up each morning.