DEFOREST — American Packaging Corp., maker of flexible packaging for a variety of food, health care, hygiene and household products, plans to build a plant in DeForest and add as many as 300 employees there over the next decade.
Company officials joined Lt. Gov. Rebecca Kleefisch and Village President Judd Blau in announcing a $50 million first phase of the plant at a Wednesday morning press conference in the DeForest Northern Business Park.
The project will be helped by an incentive package that includes up to $750,000 in Wisconsin Economic Development Corp. tax credits and nearly $1.9 million in land subsidies from the village.
American Packaging has more than 600 employees across three plants in Columbus; Rochester, New York, where it has its headquarters; and Story City, Iowa. It manufactures packaging for major consumer product companies such as Unilever, Mars, Nestle and ConAgra Foods.
The privately-held company has seen its annual sales grow from about $100 million to more than $500 million in a little more than a decade as more American companies have switched from rigid packaging to the cheaper and more environmentally friendly alternative.
American Packaging planned to put a new Italian-made rotogravure printing press it ordered into its Columbus plant, but rapid growth would have required the company to order another right away, and executive vice president Jeff Koch said adding two presses at that plant would have been a challenge.
“When we talked about expansion, we could have made this work, but we know that our longer-term strategic goals are not just two machines,” Koch said. “Two machines can produce $70 million. That’s not the end game for American Packaging. We’re going to be much larger.
“Instead of forcing that machine in there, we said, ‘Let’s just start greenfield, let’s bring both of those presses to that greenfield site and we’ll build from there.’”
Construction is already underway on the first, 170,000-square-foot phase, just west of Highway 51 on the village’s northern edge. It is expected to open by February with about 60 employees.
Three subsequent phases are expected to increase the building’s footprint to at least 400,000 square feet by the end of 2026. The additions are expected to accommodate between 250 and 300 jobs.
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Kleefisch and Koch credited WEDC’s “Certified in Wisconsin” sites program for helping meet American Packaging’s tight timeline. State-certified sites have been pre-reviewed, ensuring that all critical stumbling blocks to development have been cleared so that companies can begin building quickly.
“We know this is a program that will continue to attract interest around this country and, frankly, around the globe, especially when we have friends like American Packaging Corp. taking advantage of it. They are on top of global trends,” Kleefisch said.
WEDC also authorized up to $750,000 in tax credits for the project over five years. The total amount of tax credits American Packaging can earn is tied to job creationquotas, wage level requirements and capital investments.
Under the agreement, the company must maintain at least 48 new full-time employees at the site through May 31, 2021. It can earn up to $250,000 in job creation tax credits through May 30, 2019. The credits will be calculated at 10 percent of the wages of employees at the site.
The agreement makes American Packaging eligible for up to $500,000 in capital investment tax credits, calculated at 3 percent for company property and 5 percent for real estate property investments.
American Packaging is building on two parcels in the DeForest Northern Business Park. The company paid $86,249 for a 1.3-acre parcel and the village is subsidizing the adjacent 25-acre parcel for a value of $1.9 million.
Of the $1.9 million loan for the land, the initial $673,002 payment is forgivable if the company completes at least a 165,000-square-foot building by the end of the year, according to a development agreement approved unanimously by the Village Board on May 3.
The company is also eligible for credits against the remainder of the loan balance based on construction quotas to be performed by the end of 2020, 2024 and 2026.
Because of the training involved, some of the roughly 300 employees at the Columbus plant will be tapped to help open the DeForest plant; however, the Columbus plant’s eight presses will remain in operation, Koch said.
The DeForest facility will be the first of two or three satellite plants, Koch said. The company does a different kind of printing at its Iowa plant and is in negotiations to buy land for a second plant in Altoona, a suburb of Des Moines.