Business & economy

Fry Foods gets funds to add line, workers

The board in charge of spurring economic development in Malheur County awarded Fry Foods a $750,000 grant and a $250,000 loan on Wednesday, Oct. 11, to add a sixth fryer line to its food processing plant in Ontario.

The $750,000 grant comes with the requirement that the project is completed in one year and that 50 new jobs are created, according to board records.

In August, the $6.2 million project got a boost from a $675,000 grant from Business Oregon, the state’s economic development office.  According to the Fry Foods application to the border board, the company anticipates adding up to 100 employees and increasing annual wages by $2.2 million.

Fry Foods applied for a $1 million grant from the border board’s strategic fund, which, according to the program handbook, is designed to enhance workforce and economic development in the area. The handbook notes that applications are accepted by invitation or on the board’s initiative.

The application was scored, in part, on the project’s potential to enhance prosperity in the border region, improve the tax base, improve the region’s image and increase the workforce. Overall, board members scored the application at nearly 83%, well over the board’s 75% threshold.

While the members saw the project could bring new jobs, some questioned whether the odor of the wastewater ponds would negatively impact the image of the border region.

According to the board’s Oct. 2 meeting minutes, Bill Johnson, a board member, initially suggested the board approve the $1 million loan as a pair of $500,000 loans, a forgivable loan with a job creation requirement and an infrastructure loan with a fixed interest rate of 1% that must be paid back in five years.  Additionally, the motion called for Shawna Peterson, executive director, to negotiate the terms of the award. 

Ultimately, Peterson negotiated the $750,000 grant with the jobs requirement and a five-year $250,000 loan with no interest.

The board voted 5-1 to approve the package, with Johnson the lone no vote.

Peterson said other conditions for the financing is to show the state how many employees live in the border region and Fry Foods’ level of community involvement, but these would not trigger a recovery of the grant.  

Fry Foods executives declined to comment.

According to its application, Fry Foods noted that the new fryer line will allow the company to ramp up production for a new product, frozen mozzarella cheese sticks, to sell to Lamb Weston. That company supplies frozen potato and appetizer supplies to restaurants and retailers.

Adding the fryer, Fry Foods wrote in an executive summary, will boost production at the food processing facility by 11 million pounds, worth $25 million in sales.

Fry Foods is one of the country’s three largest national suppliers of battered and breaded appetizers. The food processing company sells its products nationally to food service companies and retailers, in addition to selling and shipping worldwide.

In 2015, Fry Foods, headquartered in Tiffin, Ohio, purchased Ontario’s 400,000-square-foot food processing facility located north of Ontario. Business Oregon reported that Fry Foods has received more than $1.2 million in grants and forgivable loans since 2014 to expand its Oregon operation. The document pointed out that the company paid $10 million for the Ontario facility and has since invested an additional $12 million. According to its application, the facility now employs more than 250 people.

Expanding in Oregon instead of Idaho will ensure the stability of Fry Foods’ business in the border region, according to the company’s application. Additionally, the company noted in its application that it had infused over $4.5 million into the project.

Fry Foods was established in 1930 and has three locations across the country. The company had an estimated $150 million in sales last year, according to industry sources.

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