Glatfelter provides public a view of $90 million investment in Fort Smith plant

by Michael Tilley (mtilley@talkbusiness.net) 1,767 views 

It took a little longer than they expected and cost a little more than planned, but Glatfelter officials publicly opened their new $90 million manufacturing operation in Fort Smith with U.S. Sen. John Boozman, R-Ark., and Gov. Asa Hutchinson among the large crowd of business and political officials.

York, Pa.-based Glatfelter acquired in March 2016 what was then the empty 232,000-square-foot Mitsubishi building at Chaffee Crossing. The company said it planned to invest $80 million to transform the facility into a specialty materials production plant estimated to employ 83 when it opened.

Chris Astley, a senior vice president for Glatfelter, said Friday (June 15) at the formal grand opening  the investment totaled $90 million and 67 are now employed. He said it was a “long and demanding journey” to transform a building from production of multi-ton wind turbines to production of a paper material small and soft enough to be part of a wet wipe and similar products.

Glatfelter’s Fort Smith plant is part of the company’s Advanced Airlaid Materials business, and the largest customers for products made in Fort Smith include Walmart and Rockline Industries.

PART OF GLOBAL GROWTH STRATEGY
Glatfelter Chairman and CEO Dante Parrini said the advanced manufacturing facility is a “foundational element of global growth strategy” for the company.

Glatfelter, a publicly traded company (NYSE: GLT), is a global manufacturer of specialty papers and fiber-based engineered materials used in coffee filters, baby wipes, adult diapers, feminine hygiene products and a wide range of other products. The company employs approximately 4,200 people, with U.S. operations in Arkansas, Pennsylvania and Ohio. International operations include facilities in Canada, Germany, France, the United Kingdom and the Philippines, and sales and distribution offices in China and Russia.

“Our Advanced Airlaid Materials business grew shipments by 6% over the prior year period driven by hygiene, wipes and home care products. This business also achieved a major strategic milestone this quarter – beginning production and commercial shipments from our new facility in Fort Smith, Arkansas,” Parrini noted in the company’s first quarter earnings report posted May 1.

First quarter net income for the company was $5.716 million, down considerably from the $11.603 million in the same quarter of 2017. Net income in 2017 totaled $7.914 million, also well below the $21.554 million in 2016. The company posted a $45.644 million “capacity expansion” cost in its Airlaid business in 2017, and a $30.681 million expansion cost in 2016.

Glatfelter shares closed Friday at $18.86, up 29 cents, with trading volume more than three times the average. During the past 52 weeks the share price ranged between $23.85 and $15.76.

WORKFORCE PRAISE
Parrini told the Fort Smith crowd one of the things that kept him up at night early in the process was being unsure if the company could find workers in the area to operate a plant producing a product made to exacting standards. He said that proved to not be a problem and he is impressed with the work ethic and skills of those working at the plant.

Gov. Hutchinson, who also noted Fort Smith is known for delivering a quality workforce, said one of the best things about the large building is it is just at 50% capacity.

“That gives us plenty of room for expansion and to add new jobs,” the governor said to laughter and applause.

In a brief interview after the grand opening remarks, Parrini was asked if there were any hiccups during the renovation.

“You never go fast enough,” Parrini told Talk Business & Politics, adding that in any project of this size there is “always a battle between managing timelines and managing budgets. … But you do not compromise on quality.”

He said the facility cost more than initially planned and began production a little later than planned, but the company now has a “first class” facility meeting production requirements.

THE MITSUBISHI MISS
Mitsubishi Heavy Industries announced Oct. 16, 2009, plans to build the $100 million, 200,000-square foot wind-turbine manufacturing plant on 90 acres at Fort Chaffee. The plant was expected to employ up to 400 once fully operational, and Mitsubishi officials initially said full production of nacelles for the 2.4MW wind turbine and the 400 jobs could be in place within the first quarter of 2012.

In December 2009 it was learned legal and trade disputes between Mitsubishi and GE would delay the opening of the Chaffee Crossing plant. Mitsubishi announced April 2, 2012 that the company would mothball the Fort Smith plant. At the time, Mitsubishi officials said they would post a fiscal year 2011 loss of about $240 million (20 billion yen) for the “write-down of wind-turbine inventory and related measures.” The unused 200,000-square-foot Mitsubishi facility was put up for sale in early 2015.

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