Folgers To Expand Plants in N.O. Area
By: Jacquetta White | New Orleans Times-Picayune | 03/25/2010
The Folgers Coffee Co. will expand production and capacity at its New Orleans area manufacturing plants and distribution center as part of a $220 million effort by its parent company, J.M. Smucker Co., to cut costs and improve long-term efficiency nationwide, Smucker said Wednesday.
Folgers plans to invest $70 million in its New Orleans area facilities, which include manufacturing plants on Old Gentilly Road and Chef Menteur Highway in New Orleans as well as a finished goods warehouse in St. Tammany Parish.
“The Folgers announcement is a good example of the recently increased national business interest in New Orleans that we have been seeing over the last three to four months,” Louisiana Economic Development Secretary Stephen Moret said. “Interest in New Orleans has picked up considerably and the city increasingly is being seen as starting a positive, new chapter following the massive challenges associated with Hurricane Katrina.”
The company will receive almost $6 million in incentives from the state as part of its plan.
Both the incentive package and the city’s location were major factors in the decision to consolidate operations in New Orleans, a spokeswoman for Smucker said. The New Orleans build-out will come as the result of plant closures in Sherman, Texas, and Kansas City, Mo.
“Because New Orleans is where the coffee beans come in there’s significant supply chain savings in having our manufacturing factory there instead of transporting beans for manufacturing,” Maribeth Badertscher said. “New Orleans also has our largest facilities that can accommodate future growth. There are expansion opportunities.”
The Missouri plant is located in multistoried downtown Kansas City, a landlocked area, while the Texas location just doesn’t have the desired supply chain benefits, Badertscher said.
Badertscher was unable to say what the specific plans for capital improvements would be at the New Orleans locations.
Folgers employs about 450 people at its New Orleans sites. The expansion will result in about 120 additional direct jobs and 381 indirect jobs, according to Gov. Bobby Jindal’s office. The governor’s office also estimates that the expansion will produce 500 new jobs in the New Orleans area over the next two to three years.
The coffee company will receive a variety of state incentives as part of its expansion, according to a cooperative endeavor agreement signed between the parties. The incentive package includes a $3 million performance-based grant for relocation costs, a $2.1 million refundable state tax credit for capital investment through the state’s new Retention and Modernization Program and a $500,000 public infrastructure grant to pay for drainage and surface improvements at its New Orleans sites. Louisiana Economic Development will also support Folgers’ application for $65 million in Gulf Opportunity Zone bonds, according to the agreement.