UPDATED: PGI to expand in Waynesboro

Updated at 11:05 a.m.

Gov. Robert F. McDonnell announced today that Polymer Group, Inc. would expand its existing Waynesboro facility at least $65 million and add 41 new jobs.

McDonnell said the expansion would include the purchase of high-technology equipment to establish a new manufacturing line and increase production, and expand the current building to accommodate the new line.

"An investment of this magnitude and the creation of 41 new jobs is important for Waynesboro and important for the manufacturing sector in Virginia,'' McDonnell said. "PGI has experienced success in the commonwealth and this planned expansion enables the company to increase both production and production capabilities with state-of-the-art equipment. The project ensures that PGI will continue to build on its progress in Waynesboro."

Veronica "Ronee'' Hagen, chief executive officer of PGI, lauded the work of Virginia and Waynesboro officials, saying "the effort of the Virginia Economic Development Partnership and local Waynesboro officials to address and meet our unique needs through their combined incentive package have allowed us to make this planned expansion possible in Waynesboro."

McDonnell approved a $750,000 grant from the Governor's Opportunity Fund to assist Waynesboro with the project. The governor also approved $750,000 in a performance-based grant from the Virginia Investment Partnership program. The Virginia Department of Business Assistant will provide new job training assistant through the Virginia Jobs Investment Program.

:: :: :: From Wednesday's print edition :: :: ::

Gov. Robert F. McDonnell is expected this morning to issue a news release announcing that a North Carolina textiles maker will launch a $65-million expansion at the company’s Waynesboro plant, a state government official said Tuesday.

The Polymer Group Inc. project will provide more than 40 jobs and a payroll of about $1.5 million, officials said. The move was brokered based on what officials described as an “incredible” state and local incentive package.

State and PGI officials have been working for months to craft the deal, which Mayor Tim Williams said is the most aggressive he’s seen the city or state put together.

“The deal from the governor’s office is extremely gracious and a strong indication of what Virginia means when we say we’re going to promote economic development and bring industry to commonwealth,” Councilwoman Lorie Smith said Tuesday. “This helps guarantee PGI’s presence in Waynesboro for the long haul.”

The incentives include land donated by the city, cash and tax breaks, Williams said.

“The land was a big issue,” he said.

So was former Vice Mayor Reo Hatfield’s role in negotiations, Williams said.

“It appeared that an expansion in the industry was happening,” Hatfield said. “However, it looked like it was going to move to another location when I got involved. The governor was coming to my office, so I asked some gentlemen with PGI if I could set up a meeting between them.”

Hatfield, president and founder of Reo Distribution based in Waynesboro, hosted McDonnell, Lt. Gov. Bill Bolling and Attorney General Ken Cuccinelli before a pre-election rally in Waynesboro last fall.

“It’s been a grueling process,” Vice Mayor Frank Lucente said. “We’ve been in competition with North Carolina and were not even on map when we started the process. Thanks to city staff, especially [Assistant City Manager] Jim Shaw, and his hard work and council’s willingness to be aggressive in seeking this expansion, we were fortunate enough to have it come about. It’s a great psychological lift for the town and shows we’re a force to be dealt with.”

Bolling told The News Virginian in mid-March that PGI officials and state leaders had been discussing a potential addition at the company’s 180,000-square-foot facility on Shenandoah Village Drive.

But Bolling said at the time that negotiations were at a sensitive stage.

“We have been working with PGI and local officials to explore the possibility of expanding their current operations in Waynesboro,” the lieutenant governor said.

The Charlotte (N.C.) Business Journal, located less than 20 minutes from PGI’s headquarters north of downtown, on March 12 described the project as one that would add 150,000 square feet of space housing an expensive non-woven textiles machine.

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

PGI spokesman Cliff Bridges said the company had “something in consideration,” but he declined to comment further.

Based on a payroll of $1.5 million for the roughly 40 jobs the expansion would create, the average annual wage would be $37,500, almost a fourth higher than the city’s overall average wage of $30,300, according to Virginia Employment Commission statistics.

The projected jobs are about twice the number cited in the Business Journal story.

The city’s industrial base has bled hundreds of jobs in the last two years, pushing the local unemployment rate to 9.2 percent in January, up from from 7.6 a month earlier.

Along with additional jobs at PGI, officials expect the expansion to register an economic impact of about $4 million because of feeder jobs and increased business for area merchants. That does not include construction-related jobs for work on the expansion.

PGI’s Waynesboro plant currently employs about 170 people, who 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 Employment Commission data.

PGI acquired the plant in 1999, Bridges said.

A publicly held company, PGI reported a gross profit last fiscal year of $183.7 million, an increase of 4.5 percent over the previous year.

Sales from continuing operations were $882.7 million, compared to $1.1 billion in fiscal year 2008.

This story was updated to correct the attribution of Councilwoman Lorie Smith's quote.