Conwood's New Memphis Facility to Open in January 2012

Source from:  Memphis Business Journal 05/31/2010

Conwood Co. LLC, an operating company of Winston Salem, N.C.-based R.J. Reynolds Tobacco Co., will open a $133 million Memphis facility in January 2012 as part of its parent company's overall plans to maximize cigarette-manufacturing efficiency and expand smokeless tobacco production capacity. Reynolds American Inc. is closing cigarette factories in Winston Salem and Yabucoa, Puerto Rico, and will transfer those operations to its largest facility in Tobaccoville, N.C. Meanwhile, the company is expanding its American Snuff Co. LLC operations in Memphis and Clarksville, Tenn. American Snuff Co. is Conwood's former corporate name. The company started renovation of its Memphis facility at 5106 Tradeport Drive in August. It bought the 787,500-square-foot building on 35.6 acres for $19.2 million from JP Morgan. Conwood, which has multiple brands such as Kodiak and Grizzly, plans to spend $54 million on U.S. Food and Drug Administration requirements and preparing the building for manufacturing and $43 million on production equipment. Another $16.8 million would be spent on engineering and other soft costs. The Memphis and Shelby County Industrial Development Board awarded Conwood a payment-in-lieu-of-taxes award in August 2009 for the then-potential project. At that time, the company said the project would create 25 new jobs, and retain 294. The new jobs' average wage would be $55,797, including benefits. The IDB approved a nine-year tax abatement for the company, which will save the company $6.7 million. Conwood currently has a 377,449-square-foot manufacturing and warehouse facility built in early 1900s on Keel Avenue in Downtown's Uptown neighborhood. It also operates a 48,644-square-foot corporate office on Ridgelake Boulevard and a 174,900-square-foot warehouse on Warford. The plant on Keel will close in early 2012. It is also building a new tobacco receiving and processing plant in Clarksville which will be open by early 2012. "Our operating companies are optimizing their manufacturing operations to increase efficiency, upgrade and expand some operations, and reduce complexity," said Susan Ivey, Reynolds American chairman, president and CEO, in a statement. "These changes make our companies more efficient in light of the declining U.S. cigarette industry and growth in smokeless tobacco. Consolidating production into fewer and newer facilities will also facilitate cost-effective compliance with new federal regulations of the tobacco industry." Enditem