Week of July 29, 2002
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World's Largest Plastic-Tubing
Firm Funnels First U.S. Plant
into South Virginia
DANVILLE, Va. Essel Propack Ltd., the world's largest manufacturer of laminated and plastic tubes, has picked Danville, Va., as the site of its first U.S. manufacturing facility. The Virginia city of some 50,000 residents beat out a location in Guilford County, N.C.
Headquartered in Mumbai, India, Essel Propack in April established a U.S. subsidiary, Essel Propack America. The new unit was created on the heels of the company's signing a lucrative five-year contract with Procter & Gamble (P&G). With the agreement, Essel Propack America will now supply all of P&G's North American tube-packaging requirements.
North Carolina Location Specified inNorth Carolina's Guilford County, however, looked to be the early favorite for the project. Guilford County's largest city is Greensboro, home to the P&G plant that Essel Propack's first U.S. plant will supply. In addition, Essel Propack released a statement in establishing its American subsidiary that said that the company's U.S. unit "would set up a manufacturing facility in North Carolina USA."
U.S. Subsidiary's Initial Announcement
Essel Propack received a number of incentives for locating in Danville, which sits some 47 miles (75.2 kilometers) from Greensboro.
Warner approved a $200,000 grant from the Governor's Opportunity Fund to assist Danville with the project. The city will also receive $200,000 from the state's Tobacco Region Opportunity Funds to assist Essel Propack.
The Virginia Dept. of Business Assistance (VDBA) is also helping with project financing through a $1.6 million loan to the Danville Industrial Development Authority. VDBA will also provide work-force training for Essel Propack's Danville employees.
In addition, Essel Propack's plant will be eligible for further tax credits by virtue of its location in an enterprise zone.
The company's first U.S. plant in Danville joins its wide-ranging international network of existing manufacturing operations. Other Essel Propack plants are located in China, Colombia, Egypt, Germany, India, Indonesia, Mexico, Nepal, the Philippines and Venezuela. In addition to its Indian headquarters, Essel Propack also has offices in Singapore and Thailand.
Editor's note: For more on South Atlantic states like Virginia,
see the regional review in the September Site Selection.
Hibernia Bounces Back with $100M Expansion Plan for East Texas
Headquartered in New Orleans, the company was created all the way back in 1870. The bulk of Hibernia's 260 locations remain in Louisiana. Only 42 of the company's operations are in Texas, all of them clustered in 15 counties in the eastern part of the state. Texas, however, looms large in the company's future, said Hibernia President Herb Boydstun.
"Looking to the future, expansion of our Texas footprint is a key to growing and leveraging Hibernia's franchise," Boydstun said.
One Texas County's Housing StartsRapid growth in Hibernia's target Texas markets is the major reason that the company's so high on rapidly expanding in the Lone Star State.
Equal Almost All of Louisiana, Company Says
For example, one target market, the Dallas suburb of Collin County, had almost as many housing starts in 2001 as the entire state of Louisiana, Boydstun explained. Covering 848 square miles (2,204.8 square kilometers), Collin is Texas' fastest-growing county. The 496,675 residents recorded in the 2000 census marked an 86.2 percent increase from the county's 1990's total.
"It's the kind of growth market in which a strong mid-cap company like ours can succeed, and not just from a mortgage-banking standpoint," Boydstun said.
The company first entered the Texas market in the late 1980s. Hibernia's presence in the state, however, went into temporary hibernation in the early 1990s, when problem loans put the company in severe financial straits. Hibernia totally backed out of Texas, selling off its operations in the state in order to restructure debt. The company didn't return until 1996, when it acquired Texarkana Bank for $406 million.
Hibernia's expansion program will create as many as 50 separate new operations, company officials said. The aggressive move comes on the heels of second-quarter 2002 earnings of $62.5 million fir Hibernia, a holding company for Hibernia National Bank. That marks a healthy increase from the $54.9 million in earnings from second quarter 2001. Return on average assets totaled $1.52 per $100, up from $1.34 per $100.
If the Texas expansion further boosts the bottom line, Hibernia could potentially find itself an attractive target for a buyout, analysts say.
Picks North Carolina
for North American HQ
JAMESTOWN, N.C. A real estate deal too good to pass up has prompted German-based Alberdingk Boley to have a change of directional heart about where to locate its North American headquarters. Once bound for Statesville, N.C., the resin producer's North American operations base is now headed instead to another city in the Tar Heel State - Jamestown, part of the Greensboro metro.
Opportunity Accidentally KnocksBut Jamestown, which is located some 63 miles (100.8 kilometers) northeast of Statesville, began to loom large in the decision after Alberdingk Boley officials had a chance meeting at a trade show with officials from Omnova Solutions. A manufacturer of chemicals, and decorative and building products, Omnova is headquartered in Jamestown in Guilford County. And the company, Alberdingk Boley discovered, was preparing to discontinue manufacturing inside an existing 160,000-sq.-ft. (14,864--sq.-m.) facility in its headquarters city.
Using that available space, Alberdingk Boley officials realized, would cut costs, as well as shortcutting the time to get the new operation online. Alberdingk Boley is spending some $9 million to buy and renovate the Omnova facility in Jamestown, according Vice President of Sales and Administration Mike O'Shaughnessy. By comparison, construction of the new facility in Statesville was going to cost an estimated $20 million to $30 million.
Alberdingk Boley's new headquarters, which will also include laboratory, manufacturing and warehouse space, comes shortly after Guilford County lost an international location project on which it narrowly missed: Essel Propack's first U.S. manufacturing facility, which went instead to Danville, Va. (The Essel Propack project is profiled elsewhere in this week's edition of Project Watch.)
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