Leaf Plant May grow Hiring

Source from:  By BILL WOLFE The Courier-Journal  06/17/2004

National Tobacco could add 22 more jobs in consolidation plan With growing business and new products, National Tobacco Co. could add 22 jobs to the 36 hires originally planned for the company's expansion and upgrade of its Louisville plant. The loose-tobacco maker, a subsidiary of North Atlantic Trading Co., is consolidating its operations in Louisville, investing up to $24.6million over the next three years. The company will close most of its Dresden, Tenn., operation, which it bought along with Stoker Inc., a maker of lower-priced, roll-your-own brands. [img border=0 hspace="4" vspace="4" align="left" src=http://www.tobaccochina.com/english/picture/06-16-2004_F1_BIZ_0616Tobac3_mag.jpg] Louisville offers "the best overall economic environment" for the company, said David Brunson, North Atlantic Trading's president and chief financial officer. In the next three to six months, National Tobacco will invest about $8million in the Louisville distribution hub and will add up to 36 jobs, mostly hourly positions, at a plant, which already employs 155. National Tobacco, maker of Beech-Nut, is the third-largest maker and marketer of loose-leaf chewing tobacco. Its purchase of Stoker expanded its holdings in the homemade cigarette business. More jobs are expected in the next three years. "We think we will continue to grow," he said, and possible product-line expansions will create more opportunities for growth. Homemade cigarettes represent a small part of the U.S. market, but rising taxes on manufactured cigarettes have driven strong growth in the roll-your-own and make-your-own segment, said Ron Tully, vice president of new projects for North Atlantic Trading. In 1989, homemade smokes represented half of 1 percent of the market. Today, they account for 2 percent. With the higher employment and investment goals, National Tobacco will receive more incentives than the $1million originally approved by the Kentucky Economic Development Finance Authority in December. If National Tobacco meets its hiring targets, state and city incentives will total $3.8million, including another $1million from the authority and $1.56 million in industrial revenue bonds. Brunson said the additional investment and resulting jobs could be affected by proposed federal legislation to bring tobacco production under the authority of the Food and Drug Administration. "We're not encouraging that. We're not recommending that," he said, but the company believes such a law could pass in one or two years. If one does, it could require millions of dollars to be invested in the plant to meet FDA requirements. Planned upgrades to the plant, at 3029 W. Muhammad Ali Blvd., include floor expansion and structural improvements, along with new machinery that will raise output of tobacco for chewing and cigarettes to around 10million pounds per year from about 6.5million pounds annually. The 600,000-square-foot plant has been used by tobacco companies such as Lorillard since the 1890s. With the planned closings of Brown & Williamson's Louisville headquarters and a Philip Morris USA plant on Miller Lane, National Tobacco will represent the last tobacco operation in the city, said Steve Bittenbender, spokesman for Greater Louisville Inc., which helped secure the company's expansion. Efforts to land the expansion represented a team effort for Greater Louisville Inc. and local and state officials, Mayor Jerry Abramson said. "It wasn't that long ago when I was here to cut the ribbon on the opening of this facility," Abramson said, recalling National Tobacco's entry into Louisville in 1988. "It seems just yesterday. And then all of a sudden we were in a situation where we were either going to lose 150 jobs or we were going to gain 70 plus jobs. We were either going to lose the investment in this community, or we were going to gain" millions of dollars in investment. "That's when we really got aggressive" with efforts to retain the business, the mayor said. Brunson said the company's decision to expand in Louisville wasn't based solely on the financial lures dangled by the city and state. "Economic incentives are nice," he said, but the company also needed "work-force stability" and was concerned that it faced several union contracts soon to expire. Brunson said he had previously overseen four contract negotiations. "This was the most complex, but it was also one of the most cooperative ventures that I've seen," he said, and the successful talks helped pave the way for the expansion. Louisville's gain was Dresden's loss. The northwestern Tennessee community will lose about 90 manufacturing jobs, but North Atlantic Trading will retain 10 to 12 employees in catalog and fulfillment operations. Stoker makes and markets loose-leaf chewing tobacco and roll-your-own and make-your-own tobaccos. Its brands include Our Pride, Tennessee Chew, Fred's Choice, Number 2 and Old Hillside. Brand names will not be affected by the consolidation, and Stoker will operate as a trading division under National Tobacco, Tully said. Roll-your-own cigarettes don't have filters and are rolled by hand. Make-your-own cigarettes are made by injecting tobacco into a paper tube that includes a filter. Enditem