Major PGI deal in works

State officials and a North Carolina textiles maker are working on a deal that could result in a major expansion of the company’s Waynesboro plant, Lt. Gov. Bill Bolling said Friday.

Polymer Group Inc. officials and state leaders have been discussing a potential addition at the company’s 180,000-square-foot facility on Shenandoah Village Drive, Bolling said. He declined to elaborate.

“We have been working with PGI and local officials to explore the possibility of expanding their current operations in Waynesboro,” the lieutenant governor said. “However, we can make no further comment on the status of those discussions at this time.”

The Charlotte (N.C.) Business Journal, located less than 20 minutes from PGI’s headquarters north of downtown, described the project as a $70-million expansion that would add 150,000 square feet of space housing an expensive non-woven textiles machine.

The publication said PGI officials also are considering the company’s Mooresville, N.C., site for the addition, but Waynesboro had gained the edge because of a “lucrative” state and local government incentives package.

PGI spokesman Cliff Bridges said the company had “something in consideration” but declined to comment further. Four Waynesboro council officials declined to comment.

Bridges told the Charlotte Business Journal that the company’s board of directors would decide on the project as soon as this week. The journal said the move would add about 20 jobs, citing unnamed sources. The story broke online Friday.

The low number of jobs such an expansion might generate is emblematic of manufacturing’s mounting reliance on technology over labor, said Robin Sullenberger, CEO of the Shenandoah Valley Partnership, a Harrisonburg-based group that promotes economic development in the region.

“These expansions are different,” Sullenberger said. “They are high-impact and high-capital and not typically with a lot of jobs.”

Waynesboro Economic Development Authority Chairman Tom Reider said an expansion would provide a boost to the city’s industrial base, which has bled hundreds of jobs in the last two years, pushing the local unemployment rate to 7.6 percent.

Discussions about an expansion have been ongoing among PGI officials for several years, with sites internally competing for the project, Sullenberger said. The decision about where to go hinges on plant productivity and overhead costs, he said. The Waynesboro plant is highly regarded, Sullenberger said.

At that facility, about 170 employees produce disposable non-woven fabrics used in products such as medical bandages and gauze, wipes, diapers, feminine products, flooring and flame-retardant materials. The plant sits on 15 acres of land, according to city property records.

PGI is Waynesboro’s seventh largest employer, according to data released by the Virginia Employment Commission this month.

Waynesboro development officials recently considered a study of more than 300 acres along the city’s southern border, which includes the PGI property. Officials have identified the area as needing better integration into the city and as a candidate for a cohesive corridor branding effort.

PGI acquired the plant in 1999, according to Bridges.

The company’s common stock price steadily has risen over the past year, hitting $16.20 at the close of trading Friday.

PGI reported gross profits of $47.2 million in the third quarter of last year and $139.2 million in the first nine months of 2009 and margins of more than 20 percent in both periods. Annual revenues top $1 billion.