Palm Plastics announces expansion 10.8

Written by David Green.

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By DAVID GREEN

Palm Plastics president Jeffrey Owen has what could be described as a good problem.

Too much work; not enough space to get the job done.

More manufacturing space is needed and Owen wants to see the company’s growth stay in Morenci. The Michigan Economic Development Corporation (MEDC) couldn’t agree more.

Owen’s plan is expected to become a reality with the announcement this week of a $12.3 million project designed to create 132 new jobs in addition to the existing 252 positions. Palm Plastics will expand operations into a new $5 million building.

The company will buy about 20 acres of land in Morenci’s industrial park—property east of its present location—for the construction of a 75,000 square foot building.

“We are in the process of finalizing the developer for the project,” Owen said, “and we anticipate the facility will be completed and in full production by the end of the second quarter of 2009.”

Palm Plastics intends to invest $6.75 million in new equipment to keep up with existing demands and meet expected growth.

The state development agency faced competing offers from Ohio and worked with city and county officials to create an economic development package with a value of $5.5 million. The package of tax incentives and grants includes funds for the city to upgrade the industrial park.

MEDC announced the availability of a Community Development Block Grant (CDBG) to the city of $2.9 million, with $2 million described as an Economic Development Job Creation Direct Grant that will allow Palm to be reimbursed for some equipment purchases.

The remaining $900,000 will be used to develop Hammontree Industrial Drive in the industrial park to allow access from Main Street. The grant will help pay for road, water and sewer improvements and will require matching funds from the city totaling about $270,000.

A public hearing is scheduled at 7:30 p.m. Monday to consider the city’s application for the CDBG grant.

Growth

Owen spoke about the success of the company’s plastic pallet manufacturing process that began in late 2006. Seventy percent of the company’s manufacturing capacity was devoted to pallets last year when 1 million were produced.

Palm is on line to double that mark this year, and through the expansion project, production is expected to reach 3.25 million in 2009.

Palm has also experienced tremendous growth in consumer products.

“We anticipate that it will continue to grow and support our commitment to the new facility,” Owen said.

In August, the Palm Plastics Recycling LLC subsidiary was formed and set up operations in the former Fayette Tubular Products building on the north side of Fayette. The facility serves as the recycling center for the plastic pallets as they return from the retailing marketplace.

The pallets have a useful life that far exceeds wood pallets, Owen said, and they’re completely recyclable.

In order to meet the current demand for products, the Fayette building is also handling some manufacturing until the new facility is ready for use next year.

Owen speaks highly of what he calls his “outstanding workforce” and he’s confident they’ll get the job done as the company grows.

Cooperative effort

Owen praises the efforts of local and state officials for their assistance, along with the help of David Munson of Munson Development Company. Munson, the former head of the Lenawee Economic Development Corporation, is enthusiastic about Owen’s leadership.

“As recently as three years ago Palm Plastics was a struggling automotive parts supplier,” Munson said. “Jeffrey Owen, his management team and workforce transformed Palm into a very successful manufacturer of consumer goods and other non-automotive products.”

“This is a great model for other Michigan companies facing similar issues. MEDC and the community are to be commended for supporting Palm’s success and growth.”

Morenci mayor Doug Erskin recalls the lengthy process that led up to the final resolution. Owen first met with city officials in March and subsequent meetings showed a slow progress.

“After many weeks, long hours and many phone conferences with many different agencies in the state, Palm Plastics and the City of Morenci began to see some light at the end of the tunnel as many obstacles were being overcome,” Erskin said.

The interest shown by Ohio representatives only intensified the efforts north of the border, he said.

“Some may say that it is only 132 more jobs, but the State of Michigan recognized the great benefit of keeping Palm Plastics with those 132 jobs located in Michigan,” Erskin said. “They saw that it would not only add jobs but open many more areas for economic growth in Lenawee County and Michigan.”

Erskin has kind words for the county and state officials who worked hard to make the project a reality.

“You have shown us that your desire is to put this great state of Michigan back on its feet,” the mayor said about the efforts coming out of Lansing.

Keith Pennington, chair of city council’s finance and legal committee, spoke of Palm Plastic’s move away from the automotive industry—the direction taken by other local companies.

“The foresight of Palm moving their production to non-automotive applications is indicative of a trend within the leading industries located in Morenci,” he said. “Roth Fabricating has done a tremendous job pursuing defense related work and General Broach is becoming a leader within the aerospace industry. All these industries have been adding jobs and increasing investment in recent years. These local employment options will improve the housing market, commercial businesses and quality of life in Morenci.”

Without Owen’s commitment to growth in Morenci, Pennington believes the expansion project would have gone elsewhere, and maybe the entire operation would have left town eventually.

“That kind of loyalty does not happen overnight. The City of Morenci benefits greatly from the working relationships developed over the years through the mayor’s office, the city council and specifically the work of administrator Renée Schroeder and David Munson of Munson Development Company,” Pennington said. “These relationships reach into every level of government, public utilities and the private sector. This project would have failed if any one of those individuals or agencies had not gone to bat for Palm Plastics and the City of Morenci.”

Schroeder is delighted to move forward with the work required by city hall to complete the grant process.

“By getting the road completed and related infrastructure in, who knows? Another company may be waiting in the wings to build in the industrial park,” she said.

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