Officials from snack-food industry leader Frito-Lay recently confirmed plans for a $138 million construction project to expand operations at their manufacturing and warehouse facility in Rosenberg over the next two years. With 575 full-time employees working three around-the-clock shifts, Frito-Lay is recognized as one of the county’s largest employers. To aid with the expansion plans, Fort Bend County Judge KP George and members of the Commissioners Court recently approved a tax abatement agreement.
“We always look for opportunities to invest in economic development and are in talks with numerous entities currently for similar agreements. We want to attract industry to come and do business in Fort Bend County because they create jobs and pay taxes eventually and we want our existing businesses like Frito Lay to grow and expand. Always, this is a good deal for everybody,” Judge George said. “The bottom line is Fort Bend County is open for business. We work to attract businesses and entice industry to come here and work to help existing businesses to continue to grow here.
“One of my goals as county judge is to attract more business to Fort Bend County. More businesses mean more jobs. In the past, we were known as a bedroom community for the City of Houston. We wanted to change that and evolve into a community where we live here and we play here. We educate our children here and also, we work here. That is our motto, and this will continue to be a focus to create more jobs for our citizens,” he said.
A tax abatement is an agreement approved by county commissioners for full or partial exemption from ad valorem taxes. The terms of the Frito-Lay agreement were negotiated by officials from the Fort Bend County Economic Development Council for a partial tax exemption based on only the value of the new expansion. The deal runs from 2019 through Dec. 31, 2031, and grants a 45 percent tax reduction.
“The Fort Bend Economic Development Council is a functional arm of the county and they have been an excellent working partner for us,” George said. “When it comes to business and industry, they are the experts. So, when businesses are considering relocating to Fort Bend County or existing businesses like Frito Lay are seeking to expand, the Fort Bend County Economic Development Council steps in and maintains a leadership role for us in the process.”
Frito-Lay Inc. North America is a subsidiary company of the publicly-traded fortune-500 company Pepsico. Frito-Lay has maintained a position as the fastest-growing segment for PepsiCo in recent years, according to company financial reports.
The Rosenberg production and warehouse facility currently operates seven manufacturing lines that produce Lay’s potato chips, Tostitos, Doritos, Cheetos, Baked Cheetos, Fritos and Tostitos Scoops. The multi-million dollar expansion will increase the existing 470,00 square-foot facility by 120,000 square-feet of warehouse space and facilitates the addition of a new product line along with adding new seasonings and equipment to the plant inventory.
Construction will start in January 2020 with a scheduled completion date in late 2021.
“Frito-Lay is proud to have had a presence in Rosenberg, Texas, for more than 35 years and to employ more than 575 plant and warehouse full-time associates at the site,” company officials said in an email. “Our continued growth has provided a need for additional capacity at our Rosenberg site, and this long-term construction project will enhance the site’s overall capabilities. The $138 million investment, planned to be operational in late 2021, will include a new Cheetos line, new seasoning and packaging equipment, and a warehouse expansion.”
Producing more than 125 million pounds of snacks each year, the Rosenberg facility serves states including Texas, Louisiana, Oklahoma, Kansas and Georgia. The site also provides seasonal support for Wisconsin, Virginia and California.
Projected economic impact of $128 million plant expansion
Although the number of jobs at the plant is not expected to increase as a result of the expansion, company officials say productivity initiatives will allow management to upgrade some lower-skilled jobs to positions requiring a higher skill set and offering a more attractive salary. Currently, the average base salary at the Rosenberg facility is approximately $50,000 annually.
Economic development documents state the economic impact of business travel related to the plant expansion will boost hotel occupancy tax and sales tax revenues for Rosenberg and nearby communities with overnight bookings estimated to equal 25,000 overnight stays. In addition, the local economy could potentially benefit via increased business for local suppliers who will have the opportunity to bid on various projects during construction. In addition, existing contracts with local businesses that provide products and services will potentially benefit as the need for parts, additional materials, recycling services and waste handling among other things will increase, company officials report.
Production activity is expected to increase by approximately 35 additional trucks each week to bring in raw materials and finished goods, according to agenda documents from the November 12 commissioners court meeting.