Why is Tobacco Plant Leaving?

Source from:  By JOHN HALE Register & Bee staff writer December 14, 2005 DANVILLE, Va 12/15/2005

Universal Corp.'s announcement on Tuesday that it will cease processing tobacco in Danville - a task the company and its predecessors have performed here for 125 years - had long been foretold. The seed was sown four years ago when construction started on a 1.2 million square-foot processing plant near Rocky Mount, N.C., in Nash County. While the company also spent millions for an upgrade of its Danville plant, the Nash County factory - completed in 2003 - was hailed as the largest leaf-processing operation in the world and stocked with the latest equipment designed by Universal's engineers. U.S. tobacco production was on the decline then and has continued to fall. The decline led the company in June to tell investors that it was considering whether to continue operating in Danville. On Tuesday, the time had come to close the 32-year-old plant, an 870,000 square-foot facility located at 745 Kentuck Road. "There's no problem with the facility there. There simply isn't enough tobacco," said Karen Whelan, vice president and treasurer. "… We couldn't quite go the other way. Danville wasn't quite big enough to handle all the production." The Danville plant provided jobs for 77 full-time, salaried staffers and 325 seasonal hourly employees. No burley tobacco was processed in the Danville plant this year, which means the seasonal employees, who normally work eight or nine months of the year, only worked four months in 2005 at the plant formerly known as Southern Processors. "It's not good for Danville," Whelan said. "It's very sad." All tobacco processing in Danville effectively ended with the Tuesday morning announcement of the closing. With it goes a 125-year history of the company in Danville, the second longest tenure for tobacco processing here. Dibrell Brothers started in 1873, but that company - after having undergone two mergers, the latest forming Alliance One - moved its production in March from Danville to Wilson, N.C. Whelan said that all of Universal's operations here are expected to be completed before the year's end. "The decision to close the Danville facility was extremely difficult given our long history of operations there and the wrenching personnel issues involved," Universal Leaf president W. Keith Brewer said in a written statement. "… The employees at the Danville plant have served Universal very well for many years, and as a result of their efforts, the plant has had outstanding performance in recent processing seasons." State Sen. Charles R. Hawkins, who serves as chairman of the Virginia Tobacco Indemnification and Community Revitalization Commission, acknowledged that the announcement is another shot at the traditional Southside industry. "There's no good time to lose your job, but right at Christmas has got to be the worst," Hawkins said. "It's another one of those blows that we can't seem to duck under." Soybeans have overtaken tobacco as the top cash receipts agricultural product for the first time in Virginia's history, according to recent reports. Receipts for soybeans totaled $124.3 million, while tobacco lagged by $11.4 million. Enditem