SPRINGDALE - South Coast Baking Co. will invest $8.7 million in Northwest Arkansas and hire 150 people who will earn an average of $25 an hour to make its frozen cookie dough, the company announced Wednesday.
When South Coast Baking began looking last year at expanding its California-based cookie-dough operation, Arkansas’ location made the state an attractive option.
South Coast, whose client list includes Sam’s Club, Mrs. Fields and Panera Bread, wanted somewhere that would allow for low shipping costs to customers east of the Rocky Mountains. Ultimately, South Coast chose Springdale because of the mix of economic incentives offered by the state. Texas, Kentucky and North Carolina also were in the mix for consideration by South Coast.
“This location is perfect for us, and the economic incentives are what really made the deal come together,” South Coast President and CEO Kent Hayden said after the announcement. “Nowhere came close to the welcome we got in Springdale, Ark. For a small business to expand like this, you’re putting everything on the line. We truly feel we have a partner in the state of Arkansas and Springdale.”
State incentives provided to South Coast include $700,000 from the Governor’s Quick Action Closing Fund to be used for renovation of floors, drainage, and shipping and receiving doors at a 104,000-square-foot facility on 40th Street in Springdale.
Through Advantage Arkansas, the company will receive an income-tax credit for five years based on 1 percent of South Coast’s Springdale payroll.
Plus, the company will be eligible for tax refunds on purchases of machinery and equipment involved in the project, and the Arkansas Economic Development Commission and the Arkansas Development Finance Authority are splitting a $4.51 million bond guarantee.
Springdale Mayor Doug Sprouse and the Springdale Chamber of Commerce were involved in the initial recruiting efforts. City leaders approached the Economic Development Commission for help in landing South Coast, which employs 180 in its Irvine, Calif., operation. The commission then went to work finding the right mix of incentives to secure South Coast’s commitment to Springdale. South Coast distributes its products in 38 countries.
“These are the kind of jobs we want to create,” Economic Development Commission spokesman Scott Hardin said.
Preliminary data from the Bureau of Labor Statistics put the August unemployment rate in the Northwest Arkansas Metropolitan Statistical Area - which consists of Washington, Benton and Madison counties in Arkansas and McDonald County in Missouri - at 5.4 percent. That is the lowest for any of the state’s metropolitan statistical areas and compares with a 7.2 percent unemployment rate statewide.
South Coast is the latest company to announce intentions this month to add jobs in Northwest Arkansas.Toymaker Redman & Associates announced Oct. 7 that it plans to add 74 jobs as it moves it operations from China to Rogers. Serco Inc. said Tuesday that it is looking for 1,100 employees in addition to the 700 already working at its Patient Protection and Affordable Care Act processing center in Rogers.
The Springdale cookie dough plant is to employ 80 in the first year and expects to hire 150 by 2017. Renovations at the plant are to begin in November, and July 2014 is the target date for opening the plant.
“This flows over and over,” said Gov. Mike Beebe, who attended the announcement. “This helps gas stations, restaurants, clothing stores, automobile dealerships. This turns over so fast that 150 jobs ultimately can impact thousands. So that’s what we celebrate here today.”
South Coast also plans to use suppliers in the area, Hayden said. Pallets, eggs and cardboard are among the supplies used in manufacturing and shipping the dough that South Coast can purchase locally.
Suppliers for the headquarters are based primarily in Oregon and California.
Reduced freight costs will be put toward the Springdale expansion, Hayden said. By producing dough in Arkansas, South Coast is projecting that it can trim 2.5 million miles and 400,000 gallons of diesel fuel annually in its operation. Once production begins in Springdale, Hayden said, South Coast is expecting $85 million in annual revenue.
“Initially, reduced freight will help to fund the build out and the operations of this facility,” Hayden said. “Then we’ll be more competitive and sell to the East Coast. At the same time, it will increase available capacity.”
Front Section, Pages 1 on 10/24/2013