By Cliff Peale
Enquirer staff writer

Higher costs and project delays have prompted Procter & Gamble Co. to pull out of a proposed $30 million investment in Cincinnati's empowerment zone.

P&G was the first big company to commit to investing in the zone, a collection of nine urban neighborhoods targeted for investments under the federal Empowerment Zone law.

P&G planned to invest into a new minority-owned manufacturing company called Valu-Pac. It was to be created by Dayton's CDO Technologies Inc. with a deal to fill 30 million bottles of body wash for P&G and create up to 200 jobs.

But the costs of the project rose steadily after the April 2003 announcement, and potential delays meant that it could have disrupted P&G's complex manufacturing and distribution network. The plant was first scheduled to open in mid-2004.

"We tried it, and we're glad we tried it," P&G spokesman Doug Shelton said. "Unfortunately, it didn't work out. But we'll continue to look for other opportunities."

Officials from CDO Technologies and the city of Cincinnati could not be reached late Wednesday for comment.

P&G has another project in negotiation, to award a $120 million contract to make a fabric used in diapers to a new company run by an African-American entrepreneur. That deal with Amantea Nonwovens LLC is not affected by the Valu-Pac announcement.

They both are part of Procter's goal to reach $1 billion a year in spending with minority owned suppliers.

The Cincinnati Empowerment Corp. had projected a $1.1 million commitment to the Valu-Pac project. The zone provides tax incentives for companies to invest there and hire local residents.

The zone comprises the neighborhoods of Avondale, Clifton Heights/Fairview, Corryville, Evanston, Mount Auburn, Over-the-Rhine, Queensgate, Walnut Hills and the West End.

E-mail cpeale@enquirer.com