Mars Petcare is planning an $81.7 million expansion of its facility at Chaffee Crossing that will add an estimated 95 good-paying jobs, according to information with a “Tax Back” resolution on the Tuesday (Feb. 17) agenda of the Fort Smith Board of Directors.
It’s the second significant expansion of the plant in the past two years. Mars Petcare – based in Brussels, Belgium, with a U.S. headquarters located south of Nashville, Tenn. – opened the Chaffee Crossing site in September 2009. In October 2013 the company announced a $50 million expansion that was expected to add 42 jobs.
Mars Petcare announced November 2007 it would build an $80 million pet food plant at Chaffee Crossing and employ 200 full-time workers when the plant was fully operational. At the time of the announcement, the city of Fort Smith estimated the plant would result in an annual payroll of $7.07 million, with the average annual salary around $35,300. The company received $2.2 million from Gov. Mike Beebe’s quick-action closing fund, and other state incentives that totaled more than $19 million — with many of the incentives rewarded only when Mars begins hiring. The city of Fort Smith agreed to drainage upgrades near the plant site that, according to estimates in late 2007, could cost up to $1 million.
The “Tax Back Endorsement” the Board will consider Tuesday is a formality as part of an incentive program administered by the Arkansas Department of Economic Development. The program allows businesses to seek refunds of sales taxes on construction materials, new equipment and other qualifying expenses of investments that result in new jobs.
“The current request is on behalf of Mars Petcare US, Inc., who plans to expand its current pet food production facility located in Fort Smith at 10000 Roberts Boulevard by investing $81,700,000 in new equipment and renovations to existing buildings. This expansion will add 95 new jobs to the region with an average wage of $21.17/hour, increasing Mars Petcare’s local employment by 90%,” noted a Feb. 12 memo from Deputy City Administrator Jeff Dingman to City Administrator Ray Gosack.
The new manufacturing jobs will certainly help. The Fort Smith area manufacturing sector employed an estimated 17,900 in December, up from 17,800 in November, and below the 18,400 in December 2013. Sector employment is down almost 37% from a decade ago when December 2004 manufacturing employment in the metro area stood at 28,400. Annual average monthly employment in manufacturing has fallen from 28,900 in 2005, 19,200 in 2012, and to 18,300 in 2013.
The Mars Petcare division employs an estimated 35,000 people with operations in 50 countries. Well known brands include Whiskas, Pedigree and IAMS.
PETCARE INDUSTRY GROWTH
The U.S. petcare industry continues to grow, and saw growth through much of the recent recession. Estimated 2014 pet industry sales in the U.S. were $58.51 billion, according to the American Pet Products Association, up over the $55.72 billion in sales during 2013. The 2014 estimate is up more than 21% compared to 2010 sales.
Of the estimated $58.51 billion in 2014 sales, $22.62 billion is for pet food.
A report from animal and pet expert Clarice Brough indicates the industry will grow at an annual rate of 4% beyond 2014.
“Going forward, growth in the pet industry is projected to be 4 percent annually through 2018. In the next five years, pet operations are projected to maintain strong growth. The number of households owning pets is expected to continue to increase along with an increase in discretionary income as the economic recovery takes hold. These two factors combined will continue to bolster the demand for premium products, foods and pet services,” Brough wrote.