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Kraft Heinz announces $114 Million expansion of Columbia Foods plant

08-Aug 25, 2015

The Boone County Commission on July 21 approved the use of Chapter 100 Revenue Bonds to expand and improve the Columbia Foods facility located in Columbia, Missouri.

Kraft is proposing to invest over $100 million to modernize and increase the capacity of the Columbia plant, with an addition as well as new fixtures and equipment for the existing facility.

Kraft officials said the current plant is almost 30 years old and some of the processing equipment is original to the facility. New fixtures and equipment will improve efficiencies and expand. The Columbia plant is one of Kraft’s eight USDA inspected food processing facilities in the U.S. The Columbia facility is the home of Oscar Meyer Hot Dogs, and currently produces up to one million pounds of hot dogs daily.

The company presented an application for Chapter 100 Revenue Bonds to REDI and Boone County. Kraft Heinz asked for real and personal tax abatement of 75% on real and personal property funded via this $100 million expansion project. The Boone County Chapter 100 review Committee heard an in-depth presentation from Kraft and site selection representatives, and analyzed the potential impacts and benefits of the proposal.

Kraft currently has multiple facilities that manufacture hot dogs. If approved, this expansion project will consolidate all hot dog production into the Columbia plant.

REDI officials, who coordinated the Tax District Review Panels, noted that Kraft currently pays approximately $352,000 annually in real and personal property taxes. The Chapter 100 abatement will not apply to the existing plant and equipment, which will continue to be taxed at its full rate. Added to this tax amount will be the taxes Kraft will pay at the incentive rate that applies to only the new facilities and equipment added as part of its $100 million investment. At the end of the 10-year abatement period, tax revenues from the Kraft plant will again increase.

Consolidation of production from Columbia to another plant could have resulted in the loss of this tax revenue and hundreds of quality Boone County jobs at the facility. REDI considers this to be not only an expansion project, but also a critical retention project.

The Boone County Chapter 100 Policy was adopted in 2005 and lays out the process of analyzing Chapter 100 applications. A review committee comprised of representatives of all impacted taxing entities reviews the application and makes a recommendation to the County Commission for approval. To date, only the ABC Laboratories project has been approved by a review committee and the County Commission for Chapter 100 incentives.

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