State officials are advancing $2 million from the state’s "Community Economic Betterment Account" to a Cedar Rapids company that was swamped by flood waters last June.
Penford Products suffered $47 million in damage, but Tim Kortemeyer, the company’s president and general manager, says their insurance carriers have only paid a little more than half of the company’s claims.
"We employ over 200 people in the state of Iowa, a little bit more throughout th country, so this is a very important grant and forgiveable loan for Cedar Rapids and Penford Products," Kortemeyer says.
The company’s getting a $1 million grant from the state and a $1 millionforgiveable loan. "We have insurance. Unfortunately right now we are in dispute with our insurance companies with coverage and we have over $47 million worth of damage and only have insurance…receiveables to date of $25 million ," Kortemeyer says. "It’s a difficult time due to the flood for a small company like Penford Products."
Kortemeyer describes the state’s $2 million grant/loan combination as "significant" despite those kind of numbers. "It goes in the near term, you know, quite a long ways," Kortemeyer says. "…Not to underestimate what we can do with $2 million. It is a significant portion."
Penford makes carbohydrate-based specialty starches that’re used by companies that make paper, packaging and textiles. The starches make things like paper, cardboard and yarn stiffer. Penford’s starches are also used in foods to make them crisper; some Penford starches are added to french fries, for example.
Penford’s Cedar Rapids facility was off-line for more than three months and resumed production this past fall.
