Tuesday, July 22, 2014

Workforce wonder: Company prepping for flo of activity at Ottawa plant

By DOUG CARDER, Herald Senior Writer | 2/8/2013

Walk into almost any college dorm room, and you’re likely to see a plastic dairy crate being used for everything from a storage bin to a lamp stand.  

Those cube-shaped crates — and other plastic products — soon should be rolling off the production line at Monoflo International’s new plant in the Ottawa Industrial Park, a company representative said Friday.

Walk into almost any college dorm room, and you’re likely to see a plastic dairy crate being used for everything from a storage bin to a lamp stand.  

Those cube-shaped crates — and other plastic products — soon should be rolling off the production line at Monoflo International’s new plant in the Ottawa Industrial Park, a company representative said Friday.

Monoflo, a maker of plastic products, in August acquired the former Kennel-Aire LLC facility, 1550 N. Davis Ave., Ottawa.

The Winchester, Va.-based company originally targeted early January to open its Ottawa plant, but those plans were delayed, Pete Heaven, Monoflo spokesman, said Friday.

“One of reasons for the delay in the start up is that the company is expecting a lot more production than what was originally planned in Ottawa,” Heaven, a partner in the Overland Park law firm Lathrop & Gage, said. Heaven is representing Monoflo’s interests in Ottawa, and company officials referred questions to him.

“The company is ordering additional equipment and is targeting April 1 to open the plant,” Heaven said.

The company is in the midst of renovating the 100,000-square-foot building and bringing in equipment from its Reno, Nev., plant, Heaven said.

Monoflo officials originally estimated the company would invest about $6 million in its Ottawa plant, but Heaven said that estimate has been upgraded because of the additional equipment.

“I think it will be substantially more than $6 million now, at least a couple of million, if not more,” Heaven said.

Monoflo plans to hire a minimum of 15 workers initially and expand its workforce to 65 over the course of five years, company officials have said. Heaven said Monoflo now is talking about possibly expanding that workforce in the future because of the higher productivity envisioned at the plant, though he said he could not speculate how large the workforce might grow beyond 65 employees.

Jeff Seymour, Franklin County Development Council executive director, said he did not view the delayed start as a sign the company was having difficulty prepping the building for its opening.

“Any time you retrofit an existing building, it’s going to take some time,” Seymour said. “I’m confident they will be up and running soon. We look forward to having Monoflo as a community partner.”

Monoflo, which has production plants in Virginia and Nevada, looked at several locations in the Midwest for its new plant before choosing Ottawa, company officials said. The company selected Ottawa because of its location and available workforce, Heaven said.

“Monoflo was targeting the Midwest because of the transportation considerations,” Heaven said. “Because of the cost of shipping products, you want to be centrally located [in the U.S.].

“[Monoflo executives] fell in love with Ottawa,” Heaven said. “They said the city was friendly, and city officials were receptive to their ideas. They told me they found in Ottawa the ‘hard-working people’ they were looking for in the Midwest — those were Monoflo’s words.”

The former Kennel-Aire building was a “perfect fit” for Monoflo’s operation, Heaven said, and Ottawa was an ideal location to transport their products.

“Monoflo liked Ottawa because of its location for both highways and rail service,” Heaven said. “They ship a lot of their products by rail.”

Ford Motor Company, Home Depot, Lowe’s, CVS and Costco are among Monoflo’s largest customers, according to the company’s website, which says the company is an industry leader in reusable transport packaging and is a supplier for the automotive, distribution, food and retail markets. Some of the plastic products it produces include pallets, storage totes with attachable lids, moving crates and dollies, collapsible containers, pallets, dairy crates and bakery trays.

“Our new 100,000-square-foot facility in Franklin County will provide Monoflo with the space needed to expand our operation and better service our customers,” Henning Rader, Monoflo’s president, said in a news release when the company announced its acquisition of the former Kennel-Aire building.

Christian LeMaster, Monoflo’s chief financial officer, said the company appreciated all the help it received from Franklin County’s economic development team.

“They were very responsive in answering our questions and in assisting us in every step of the process,” he said in the release.

To assist Monoflo in defraying its start-up costs, Ottawa city commissioners voted Dec. 5 to approve an ordinance that grants Monoflo International a 65 percent tax abatement for the first 10 years of operation.

An independent tax abatement cost-benefit analysis, prepared by the Kansas Department of Commerce, showed the city would receive $6.25 in benefits for every $1 of abated taxes over the course of the 10-year abatement period, Scott Bird, the city’s finance director, said in December. The cost-benefit analysis was quite favorable and more than enough to meet the city’s benchmark of a 1.3 to 1 benefit-cost ratio, he said.

As part of the proposed abatement, Monoflo agreed to pay $9,300 per year — 10 percent of the taxes to be abated each year — to Franklin County Development Council, for a total of $93,000 over the course of the next decade, Bird said.

“It will help FCDC build a fund that will allow further recruitment activities,” Bird said of the Monoflo agreement.

The result provides Monoflo with a net abatement of 55 percent, Bird said.

Monoflo was receptive to making the $9,300 annual payment as part of the tax abatement agreement, Heaven said Friday, because it would help promote future economic development in the community and county.

“We want to do all we can to stimulate economic development, because that benefits everyone,” Heaven said. “We want to see Ottawa flourish.”

Doug Carder is senior writer for The Herald. Email him at dcarder@ottawaherald.com

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