Silgan confirms $38 million expansion to Fort Smith, will create 150 jobs

Silgan Holdings Inc. (NASDAQ: SLGN), a global supplier of rigid packaging for consumer goods products, announced to its shareholders Wednesday (Jan. 31) the company has initiated construction of a new manufacturing facility in Fort Smith.

“Silgan is excited about our expansion in Fort Smith. The warm welcome from both state and local authorities make us confident we have chosen the right location to serve our customers. We look forward to extending the Silgan family in the Fort Smith community,” said Robert Lewis, Silgan executive vice president and chief financial officer.

Silgan generates annual net sales, on a pro forma basis to include the Dispensing Systems operations which was acquired on April 6, 2017, of approximately $4.2 billion in 2016. Silgan operates 100 manufacturing facilities in North and South America, Europe and Asia.

“We’re pleased Silgan has chosen to build a new manufacturing facility in Fort Smith,” said Arkansas Gov. Asa Hutchinson. “These advanced manufacturing jobs will greatly benefit the area, and we hope it will open more channels for exports to foreign markets.”

In November, Fort Smith city directors passed a resolution to issue $38 million in industrial development revenue bonds should the company move to Fort Smith, with the intention of building a 100,000-square-foot plant and employing 150 people. On Jan. 18, Silgan purchased 15 acres at 7101 Highway 45 in Fort Smith for $712,000. The resolution stated all money would be repaid by Silgan, not the city.

City directors also approved a resolution to participate in the Arkansas Economic Development Commission (AEDC) Tax Back program, which provides sales tax refunds on building materials, taxable machinery, and equipment associated with the project.

“We could not be more pleased to welcome Silgan Plastic Food Containers to the Fort Smith community,” said Tim Allen, president and CEO of the Fort Smith Regional Chamber of Commerce. “The teamwork between ourselves, the City of Fort Smith, AEDC and Congressman [Steve] Womack brought all of the right pieces together to make Fort Smith the ideal fit for Silgan’s new facility. We’re excited to welcome them and embrace their track record of manufacturing innovation.”

Fort Smith City Administrator Carl Geffken confirmed to Talk Business & Politics at a meeting in November of 2017 that the coming jobs would pay on average $21 per hour, though he was unsure whether that meant straight salary or salary-plus-benefits. Also at the November meeting, Allen said the IRB portion of what the city voted to approve would result in a 50% property tax abatement to the city’s General Fund of around $75,000-$80,000 (or $7,500-$8,500 annually over a 10-year period).

The Tax Back Program incentive would be for an estimated $12 million to $15 million of all eligible purchases, provided those purchases are made within Fort Smith city limits.

Silgan could help the Fort Smith regional manufacturing sector continue to stabilize and grow. There were 160,500 manufacturing jobs in the region in November, according to the U.S. Bureau of Labor Statistics. The November employment was almost 5,000 jobs more than the 155,800 in November 2017, but well below peak sector employment of 247,300 in February 1995.

However, the sector in 2017 began to see consistent growth. Sector employment fell below 160,000 in May 2011, but in October 2017 again rose above the mark to 160,800.

Silgan PFC — who counts Nestlé, ConAgra, General Mills, and Campbell Soup among its clientele — is considered one of the major players in the global food container market that was estimated at $231.91 billion in 2015 by Grand View Research. The market is expected to hit $346.99 billion by 2025.