ELKHART, Ind. — Accra Pac Group (APG), which last year looked like it might be packing up and leaving town, is adding 163 new jobs in its headquarters city of Elkhart, Ind. With the expansion, the U.S. and Canada's largest privately owned provider of contract aerosol packaging will increase its Elkhart work force to 1,000-plus employees in more than 1 million sq. ft. (90,000 sq. m.) of office, manufacturing and warehouse space. APG's newest employees will staff the $9-million, 210,000-sq.-ft. (18,900-sq.-m.) distribution center that the company is going to build. The center will be built on vacant land adjacent to APG's primary manufacturing operations on Middlebury Street in the northwest Indiana city. The expansion's catalyst came from two new contracts that APG recently signed, explained CEO Satish Shah. Shah, who also owns APG, wouldn't divulge the names of the two companies. He did say, though, that both are Fortune 500 members. The firms have decided to outsource aerosol packaging from their own plants, he explained. APG's warehousing and distribution network plays a more important role than the one assigned to such operations at many other firms. The company's warehousing and distribution operations specialize in handling pharmaceuticals, and pressurized, combustible and flammable products. That focus is designed to reduce APG customers' insurance rates, as well as cut the capital often required for customers to qualify for insurance in the warehousing of such products. The expansion will add to the company's current 300,000 sq. ft. (27,000 sq. m.) of space for warehousing and 200,000 sq. ft. (18,000 sq. m.) of space for raw materials storage. APG's contract-packing clientele includes Fortune 500 firms in the automotive, food, household, personal care and pharmaceutical industries, according to company officials. The new distribution center will open near the end of next year, Shah estimated.

The expansion announcement comes after the company's apparent flirtation with relocating to Connecticut last year.

APG's existing 300,000-sq.-ft. (27,000-sq.-m.) warehouse (pictured) handles pharmaceuticals, and pressurized, combustible and flammable products.

       TConstitution State officials began wooing APG in 2002. Then-Gov. John Rowland (R) told reporters last year that Connecticut was in negotiations with the company. APG would benefit from a newly approved state tax credit, said Rowland (who resigned in June after being targeted by a federal corruption investigation). Citing anonymous sources, the Waterbury (Conn.) Republican-American said that if the company relocated, it would locate in a 725,000-sq.-ft. (65,250-sq.-m.) facility in a new business park spanning about 170 acres (68 hectares).
       TSpeculation ended, though, after Elkhart officials approved issuing as much as $7.9 million in bonds to buy APG's Middlebury Street facility. The agreement provided that the company would then lease the building from the city. Elkhart is funding the bond issue with revenues from Elkhart County's .0025-percent Economic Development Income Tax.
       TAPG is buying the building back by making monthly payments at a rate of 110 percent of the bonds' principal and interest. The rate during the agreement's first year was 100 percent. APG's rates will increase again to 125 percent from the third year until the bonds are retired. The company's payments will be as much as $800,000 a year, according to Elkhart officials. APG is also paying all building expenses, including taxes, liability insurance and maintenance costs.
       TAPG plans to pay off the bonds much earlier than the agreement's specified 15-year maximum, Shah noted at the time. The company's final payout will include some $20,000 per year for each year in which the bonds remain outstanding. In addition, the incentives agreement with the city requires APG to pay off all bond indebtedness plus any penalties if it relocates its primary operations.
       T"We have a contract with the city of Elkhart and it's a contract that we intend to honor," Shah said after accepting the bond issue. "Any further speculation about our agreement with the city should end. Accra Pac is grateful for the effort by Elkhart Mayor Dave Miller, the Elkhart Redevelopment Commission (RDC) and

With its expansion, APG will become among the 10 largest employers in Elkhart, which has some 190,000 residents. (Pictured: The Elco Theater in downtown Elkhart. Built in 1924, the Elco has been restored and still hosts many of the city's performing arts functions.)

Elkhart Common Council in helping us maintain our business presence in Elkhart."

       TElkhart's bond issue - which enabled APG to secure a $1.5-million loan to relocate its health-care production to Superior Street from Middlebury Street - seems to be paying off handsomely.
       TEven before the newly announced expansion, the company had added 350 new jobs since the bond issue was approved in June of last year. APG now employs 850 workers.
       TElkhart Redevelopment Commission (RDC) President Bill Lavery said that the company's new warehouse demonstrated that the bond issue "was a very wise utilization of public money."
       TOf the $7.9 million in bonds, $6.5 million is for the building. APG bought the Middlebury Street facility, formerly occupied by New Jersey-based Whitehall Laboratories, from the city in 1996 for $2 million. The company has since invested some $13 million in the building. The remaining $1.4 million in bonds covers bonding service fees and it creates a one-year reserve fund.
       TAPG will likely get more city assistance later this year. The Elkhart Redevelopment Commission has recommended that the company receive $200,000 from the city's Horizon Fund. That fund promotes redevelopment of the city's older plants by providing loans for much as 20-percent of project costs (with loans capped at $200,000).
       The Horizon loan would be for APG's existing facilities, not its new distribution center. The Elkhart City Council is expected to approve the loan in October.
       TAPG had $152 million in sales last year.