01 Sep Smucker’s Spreads Positive Job News September 1, 2011
September 1, 2011 (Scottsville, KY) [By Matt Pedigo, Citizens-Times Editor]
The Orrville, Ohio-based J.M. Smucker Company has something very tasty coming out of the oven for Scottsville—a certain recipe for positive economic impact, and a commodity there’s a big appetite for here: Jobs.
The Allen Fiscal Court and Scottsville City Council Monday met in a rare joint session Monday night in the Allen District Courtroom. The two bodies unanimously approved a local incentives package, adding to state incentives meant to help entice the company to make a planned $70 million investment to expand its Scottsville plant.
“This is a home run for Allen County,” said Allen County Economic Development Director Richie Sanders, who, along with the Allen County-Scottsville Industrial Development Authority, worked for several months in the negotiations process to help bring this project to Scottsville. “This will be one of the biggest investments in western Kentucky, when you look at the $70 million involved,” Sanders said.
The project will add another 80,000 square feet to the already 180,000 square-foot plant, said Smucker’s Scottsville Plant Manager Gary Ellis, who attended the meeting along with Smucker’s tax and incentives package specialist Curtis Mall. It is also projected to add 80 jobs, which would bring the plant’s total workforce to 420.
The facility, located on Smiths Grove Road on the outskirts of Scottsville, makes two lines of popular tasty treats many consumers likely can find in their local grocer’s frozen food section: The Uncrustables® line of peanut butter and jelly sandwiches and Snackn’ Waffles®, individually-wrapped snack-style breakfast waffles with the syrup already mixed in. The expansion will add another bakery, meant to greatly enhance the company’s ability produce bread to keep up with Uncrustables demand. It will also add another line to make the sandwiches, Ellis said.
“Studies show (Uncrustables) have a lot of potential,” Ellis said, noting that the sandwiches still haven’t been fully introduced in many market areas of the country due to the need for more production capacity. “We can’t currently market them fully or explore the opportunity.”
Ellis said Smuckers officials believed expanding the Scottsville plant was the right move, when the company apparently had another option. The resolution later passed by the council and fiscal court noted that the company had existing space that it may have put to use at a facility in another state. Ellis said the plant has enjoyed outstanding support from the Scottsville and Allen County community and both local governments since its initial announcement of a Scottsville location in 2002. At that time, the initial project represented a $53 million investment, and was then projected to create 150 jobs. With this expansion, that will nearly have tripled. The plant now runs around the clock, using two 12-hour shifts daily.
Last Thursday, the Kentucky Cabinet for Economic Development gave preliminary approval to a $5 million tax exemption incentives package for the deal. At the local level, Ellis saw more such local support Monday night. The council and court had before them a draft resolution for local incentives that exempt the plant’s real property from taxation for five years, beginning no later than April 1, 2014, and ending no later than April 1, 2019. The governments would still collect occupational taxes.
Sanders noted that the state and local tax incentives are performance-based—Smucker’s must make the investment indicated and create the forecast jobs to qualify for the tax breaks.
Ellis said the J.M. Smucker Company has full intentions of getting started as quickly as possible. The company wants to break ground on the project within six months, and construction is forecast to take about a year. The company won’t likely be taking applications for the new positions until about a year from now, providing time for new employees’ training before the additions go online.
Local leaders say they’re very pleased with the news. Allen Judge/Executive Johnny Hobdy read the resolution aloud to the court. On a motion by Magistrate Roman Perry Jr., seconded by Magistrate Danny Rutheford, the court voted unanimously to approve the deal. The council then weighed in.
“It’s been a pleasure to work with you all,” Scottsville Mayor Rob Cline told Ellis and Mall. He noted that Allen County’s promotional booth at the Kentucky State fair had given away thousands of Uncrustables last week. “We’re proud of Smucker’s.”
In addition to the new investment, Councilman David Dinwiddie recognized Smucker’s community involvement, including extensive work as a Pacesetter organization for Allen County’s United Way campaigns. “It is my honor to make a motion to accept,” Dinwiddie said. His motion was quickly seconded by Councilman David Huntsman, and council gave unanimous approval. “We’re tickled with the news,” Hobdy said after the meeting.
“I want to thank the council, and the fiscal court stepped up and did what people elected us to do: Provide economic development.” “This really anchors Smucker’s to our community for a long time,” State Rep. Wilson Stone (D-22nd District) noted, adding that the decision also spoke highly of the workforce the company has encountered since opening its Scottsville operations.
“The work ethic and abilities of our people played a large part,” Hobdy agreed. “This says a lot of our workforce.”
The J.M. Smucker Corporation also owns other recognized consumers brands like Folger’s® Coffee and Jif® peanut butter and Crisco® shortening and cooking oils. Its lines have been appetizing for investors as well. (It is noted as SJM on the New York Stock exchange). According to the company’s most recent earnings statements, the company posted nearly $1.2 billion in net sales for the recent fiscal quarter, which ended July 31. That represents a 14 percent increase from the same period in 2010. Its operating income for the quarter was $180.7 million, up nine percent from the same quarter in the previous year. Its gross profit rate was 36.3 percent.
Full earnings data and more information on the company can be found online at www.smuckers.com.