Graphic Packaging, Umarex buck manufacturing trend

by The City Wire staff ([email protected]) 322 views 

While Fort Smith has shed thousands of manufacturing jobs over the last several years, two companies with operations at Chaffee Crossing have found themselves to be not only stable, but growing in this tough manufacturing climate.

One company that has positioned itself along the route that will eventually flow through the former military installation is Graphic Packaging, which opened its 300,000-square-foot facility at the intersection of Roberts Boulevard and the future Interstate 49 in 2005, when the interstate and Chaffee Crossing were not much more than a dream.

I-49, a roadway already complete in MIssouri and through most of Louisiana that will open a transportation route from the Gulf of Mexico through Chaffee Crossing and eventually on to the Canadian border.

Asked why the company chose the Chaffee location, Plant Manager Aaron Mauch was direct.

"Access to I-49 and transportation lanes to both I-40 and south to our board mill in Louisiana," he wrote.

And while the company has had to wait for I-49 to become a reality, it has not stopped the company from expanding its local workforce, where more than 350 are now employed at the Chaffee Crossing facility and at the company's original 176,000 square foot Boone Avenue facility built in the 1970s, which Mauch said has since been updated for new production.

"In 2007, Graphic Packaging converted the facility on Boone Avenue to produce Z-Flute cartons. Z-flute is specifically targeted for club stores food packaging," he said.

And changes at the company are not finished, as Mauch said "incremental printing and cutting capacity will be added early next year."

While the company may be downplaying the increase in capacity, building permits issued by the city of Fort Smith for the month of July indicate that the addition to Graphic's Chaffee Crossing location will be more than $3.4 million.

Patrick Combs, director of operations at Graphic Packaging, said while it was too early to tell how the expansion would impact labor numbers at the site, the number of employees at the facility "will go up. We're putting together the numbers right now."

So how has the company been able to not only remain stable, but expand in a period when so many other companies in Arkansas, such as Nordex and Hewlett Packard, are laying off hundreds?

"Graphic Packaging has maintained its leadership in the packaging industry by providing innovative and value-added, sustainable packaging solutions that are used by brands around the world," Mauch said. "You have probably purchased food, beverages or other consumer products in the grocery store or club store that are sold in Graphic Packaging's product. We focus on product innovation and continuous operational improvements. Graphic Packaging's integrated supply chain and diverse customer base is crucial to the businesses. This means, we are one of the largest global manufacturers of folding cartons, unbleached paperboard, coated recycle board, flexible packaging, microwave packaging, heat-transfer labels and machinery."

Another Chaffee Crossing business that is a leader in its industry is Umarex USA, a manufacturer of air guns and other firearms, which announced last year a $7 million expansion of its Fort Smith campus as Walther Arms moves its operations to the Umarex campus, built in July 2010, at Chaffee Crossing.

At the time, Arkansas Gov. Mike Beebe said the workforce available in Fort Smith had been one of the motivating factors for Umarex to originally locate in the city, where the German-based company has leased space since 2006.

Adam Blalock, president and CEO of Umarex USA and Walther Arms, said he has put a big emphasis on hiring since the companies have come to call Chaffee Crossing home.

"We put a very strong emphasis on hiring, on building the team," he said. "With the rapid growth, the trick has been bringing the right people on board at the right time. And we have a lot of experience represented on our team, relevant experience. People who know our trade and industry and who understand that the distribution channel. I call it distribution channel expertise, people who know what it means to do business with Wal-Mart, Bass Pro, Cabela's, Academy and they understand that."

In addition to having the right employees available, Umarex was encouraged to place roots at Chaffee through different economic incentive packages, Blalock said.

"When it came time for our building expansion, we did have options and we were willing to do whatever we needed to do that was best for the business. The Arkansas Economic Development Commission, the Fort Smith Regional Chamber of Commerce and Chaffee Crossing were all just terrific to work with and for the most part, I was very frank in saying we want to be in Fort Smith, but we need your help to solidify that decision with the building."

Even so, incentives have not always ensured that companies using those perks keep their local operations financially viable, once again as evidenced by the recent HP layoff of nearly 500 employees after accepting economic incentive perks for locating in Conway.

Blalock said for Umarex, the company has stayed strong through a combination of good planning and a little bit of luck.

"We strategize, we write a business plan. On the air gun side, it's been very hard-earned. It's been hard-earned on all fronts, but a lot of people in the community when I run into them, they go, 'Well, it must be nice to be in the firearm business right now because every time Obama talks about gun control the markets go crazy.' And that's true," he said. "It wouldn't be genuine if I said we hadn't benefitted from a robust market. But even that's been hard-earned. But on the air gun side, really, that's been relatively little affect except traffic in a Bass Pro obviously affects air guns a little bit because they're in there after firearms. But I'd say air guns and air soft (that have been the core of our growth)."

As the company expands, it will do so in three phases over the next few years, with phase one nearly 60% to 70% complete, Blalock said, and phase 2, valued at around $5 million, was recently awarded to Beshears Construction in Fort Smith.

And Umarex has no plans to slow down, either, as the company looks to grow its Fort Smith-based workforce beyond its more than 80 full-time Fort Smith employees.

"There's a project on the Umarex side that we call 'Made in Fort Smith,'" Blalock said. "It's identifying future products and getting our supply base together. It's the whole strategy that's rolling out to our making air guns here (instead of other contracted facilities across the nation or in Germany). And we have a similar strategy on the Walther side. But we are not at a place on that timeline where we've identified here's what we're going to make."

As the company continues planning for that future growth, Director of Marketing Justin Biddle said one thing was certain at Umarex.

"The future is manufacturing."

That would be a welcome future. There were an estimated 18,600 manufacturing jobs in the Fort Smith area in July 2013. The number of jobs in the sector are down more than 41% compared to July 2000 when 31,700 were employed in regional manufacturing jobs.