Gov. Asa Hutchinson and officials with Mars Petcare were in Fort Smith on Friday (Jan. 15) to announce a $145 million expansion of the company’s plant at Chaffee Crossing that will create more than 120 jobs.
“We all know this past year has been filled with challenges. Pets have been one of the silver linings. More people turn to pets and their unique ability to make our life better. Many of us spent more time with our pets than ever before, including the 11 million Americans who welcomed a new pet last year,” said Michael Poffinbarger, Fort Smith site director for Mars Petcare.
Officials with Mars Petcare – based in Brussels, Belgium, with a U.S. headquarters south of Nashville, Tenn. – announced in November 2007 they would build the Fort Smith pet food production and packaging plant, and the $80 million facility opened in September 2009. The average annual salary at the plant was then estimated at $35,300.
In October 2013, the company announced a $50 million expansion that was expected to add 42 jobs. That was followed in early 2015 with an $81.7 million expansion estimated to add 95 jobs paying more than $21 an hour. The company announced in December 2016 a $72 million expansion estimated to create 130 jobs.
“At Mars Petcare, everything we do is in service of our purpose: A BETTER WORLD FOR PETS,” Ikdeep Singh, regional president of Mars Petcare North America, said in a statement. “The investment in our Fort Smith manufacturing facility enables us to continue to serve the ever-growing needs of pets and pet parents and represents our commitment to our Associates and this community.”
The company employs 300 in Fort Smith, with the job increase pushing future employment to more than 420 if all the promised jobs materialize. The company employed 252 in December 2016 when it said expansion would add 130 jobs, but existing employment indicates just under 50 jobs were added.
For this expansion, Mars Petcare qualified for the following incentives:
• Tax back program which provides a refund on the purchase of qualifying materials used in the expansion;
• $1 million from the Governor’s Quick Action Closing Fund;
• $125,000 for workforce training from the Business and Industry Training Program; and
• 5 years of create rebate, which provides qualified businesses a financial incentive equal to 3.9% to 5% of the annual payroll of new full-time permanent employees.
The incentives have clawback provisions in place which will be used if the 120 jobs announced Friday are not created within three years.
MORE EXPANSION POSSIBLE
Friday’s announcement is the first part of a planned future expansion. The 200,000-square-foot expansion will begin this month is scheduled for completion in 2022. The expansion will add two two production lines, increasing production capacity by more than 40%, “with room for growth in the future to continue meeting the growing demands of pet parents,” according to the Mars press release.
“The investment from Mars Petcare in their Fort Smith manufacturing facility will boost the economy at both the local and state level,” Gov. Hutchinson said. “Since the facility opened in 2009, it has become a hub of diverse and quality jobs, and we thank Mars Petcare for continuing to grow and invest in the Fort Smith community.”
Arkansas Commerce Secretary Mike Preston said the company “had several options for this latest expansion, but they knew that Fort Smith has what it takes to help the company continue to prosper.”
“When a company expands operations time and time again because of its positive experience with a community, it’s extraordinary,” said Tim Allen, president and CEO of the Fort Smith Regional Chamber of Commerce.
This is the second significant jobs announcement for Fort Smith in the past two weeks. On Jan. 4, Jonesboro-based Hytrol announced plans to invest more than $20 million to open a manufacturing operation in Fort Smith that will employ up to 250 within five years. The new operation will locate in 300,000 square feet of the former Whirlpool building.
“Mayor, congratulations. It just keeps happening in Fort Smith,” Hutchinson said to Fort Smith Mayor George McGill at the announcement press conference. “(This) really illustrates the importance of jobs. During the pandemic we have lost jobs in the hospitality industry, in tourism and restaurant sector. And those families need places of income. When you can create jobs during a pandemic, it is going to give people more opportunity.”
PET FOOD INDUSTRY GROWTH
Mars’ Fort Smith plant is one of 14 pet food production facilities that in recent years has benefited from a growing pet industry. The American Pet Products Association (APPA) predicts 2020 pet industry sales of $99 billion, up from actual 2019 sales of $95.7 billion, and well ahead of 2018 sales of $90.5 billion. Of the 2020 estimate, $38.4 billion is estimated to be spent on pet food and treats, up from $36.9 billion in 2019. The APPA 2019-2020 survey shows that 67% of U.S. households – 84.9 million homes – have a pet, up from 56% when the survey was first conducted in 1988.
According to Pet Food Processing, pet food accounts for 75% of global pet product sales in 2020, with the global pet product market valued at $125 billion total. The United States representing the largest share of global sales.
Part of the recent rise in pet food sales is from the pandemic-related rise in pet adoptions. For example, the American Society for the Prevention of Cruelty to Animals reported a 70% rise in pet adoptions in New York City and Los Angeles.
“The pet industry stands out as famously recession-resistant, coming through 9/11 and the Great Recession of 2008 relatively unscathed. Moreover, all four of the pet industry product and service sectors – pet food & treats, non-food pet supplies, veterinary services, and non-medical pet services – come into the crisis on a firm footing,” noted an excerpt from an April 2020 report from Research and Markets.
Tina Alvey Dale, Fort Smith metro reporter for Talk Business & Politics, contributed to this report.