Gränges, a Swedish company that specializes in the production of rolled aluminum products for heat exchanger applications and other niche products, will spend $26 million to expand its facility in Newport.
The move is part of the company’s decision to restart the plant, with production expected to begin in the first quarter of 2019, the company said in its statement. The facility, acquired by Gränges in 2016, “has subsequently been idle with very limited business in surface treatment,” the company said.
“This is a good opportunity for us to upgrade and use the assets we already own, and address an attractive market niche which has been mainly served through imports. We expect the investment to make a positive contribution to earnings in 2019 and beyond,” Gränges CEO Johan Menckel noted in the company statement.
According to the Arkansas Economic Development Commission, the expansion will create 100 new jobs. The facility now employs 21 workers, Newport Economic Development Commission Director Jon Chadwell told Talk Business & Politics.
How much those jobs will pay has not been released, Chadwell said. Manufacturing jobs pay on average $20 per hour in the area, and all other jobs pay on average $14 per hour, he said. Chadwell expects the jobs to pay on the upper end of the average manufacturing jobs in the region. Chadwell said he was pleased the company chose Newport to create these new jobs.
“We stayed engaged with them. … When the expansion opportunity came we threw our hat in the ring,” he said.
The expansion won’t require an enlargement of the facility, with most of the money spent on equipment, Chadwell said. The expansion will take up to two years, but Chadwell said most of the jobs will be in place during the next year to 16 months. Light gauge aluminum foil products, such as those used in food packaging, are made at the Newport facility.
“This investment builds on our foil strategy as we invest to once again serve our light gauge foil customers and their growth plans. It is great news not only for our future customers but also for the local community in the Newport area,” Gränges Americas President Patrick Lawlor said.
Gov. Asa Hutchinson was also pleased with the announcement.
“Gränges is a great example of the momentum we’re seeing in foreign direct investment in Arkansas,” Hutchinson said. “This expansion shows that Gränges has the confidence that the talent here in Arkansas will move the company forward and continue to help them succeed in the global marketplace.”
Gränges purchased Noranda Aluminum in 2016 and acquired the Newport facility along with those in Tennessee and North Carolina. The company’s Arkansas facility has one of the widest aluminum rolling mills in the United States and utilizes a proprietary coating process, according to the company. At one time the former Noranda Aluminum company had hundreds of workers in Newport, Chadwell added.
“Gränges’ investment in this facility, one of the longest operating manufacturing plants in Jackson County, is a tremendous boost for our local economy,” Chadwell said. “We are thrilled to have 100 jobs returning to Jackson County. These jobs pay significantly higher than our average wage and will give local citizens a chance to improve their family income right here at home.”
In addition to food packaging, the company manufactures products for HVAC, transformers, and the automobile industry. About half of the cars produced in the world today contain materials produced by Gränges, company officials said. The company has production facilities in China, Sweden and the United States, and employs around 1,600.
Talk Business & Politics Executive Editor Michael Tilley contributed to this report.