The State of Iowa pledged about $1.2 million in tax incentives to a plant near Merrill that will make corn oil for food and cooking.

The $30 million Plymouth Oil plant is planned next to the 50-million-gallon Plymouth Energy LLC ethanol plant near Merrill. The projected completion date is July 31, 2013, according to an Iowa Department of Economic Development (IDED) spokesperson.

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The plant will likely employ about 25 people.

The plant is eligible for tax benefits because 18 of those jobs meet the state's qualification as "High Quality Jobs," having wages that are 130 percent of the county average.

Plymouth County's average wage is $21.38 an hour.

IDED announced the tax incentives package last week, according to spokeswoman Stephanie Bjornson.

That package for Plymouth Oil includes an investment tax credit of $877,450, an amount determined by taking 5 percent of the developers' qualified investment cost.

The package also includes a $48,750 research and development tax credit and a $333,840 refund of sales, service and use tax paid during construction of the plant.

Along with producing corn oil, the oil plant would provide the high-starch part of corn kernels Plymouth Energy will use in making ethanol.

Developer Dave Hoffman earlier said the oil plant should lower the ethanol plant's costs by 9 to 10 cents a gallon.

The plant will also produce 240 tons of defatted germ meal daily, which can be used for hog, poultry and dairy feed.

The ethanol plant is under construction and slated for an August completion. Hoffman is the chairman of the board for that plant. The ethanol plant should create about 35 jobs.