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As published in Toledo Business Journal - September 1, 2016

P&G Lima plant begins
$65M expansion

Procter & Gamble's Lima facility

Vertical integration to add materials production

Procter & Gamble Co. (P&G) has begun a $65 million, 18,000 square foot expansion to a laundry detergent plant in Lima, according to company officials.

Fluor Corp., from Texas, is the general contractor for this project, which is expected to take about two years, according to Jeff LeRoy, P&G spokesperson.

“We have been redesigning our entire North American supply chain for about three years, and that supply chain is anything from getting raw materials to our plants, to manufacturing those materials into products, and then distributing those products to our retail customers,” he said. “We have been designing that whole process, making it more effective, and also enabling us to get products to retailers on their shelves 80% of the time within one day of the product being manufactured. As we do this, and we have been doing this for a couple of years, it causes us to look for places where we can be more efficient in our manufacturing, where we can leverage our economies of scale. And one of the things we can do better is manufacture chemicals at the Lima plant that are already used in the products that the plant is manufacturing. The Lima plant is a fabric care plant that makes detergent like Tide, Gain, Tide Pods, and Downy fabric softener. So we are just going to manufacture at the same location some of the chemicals that are already going into those detergents.”

The plant, which also produces Vira and Cheer, is expected to create 51 new jobs as a result of this expansion.

Tide Pods

“We’re going to bring about 51 new P&G jobs to the site, and the site already has over 600 P&G employees, so it’s going to be about an 8 or 9% employment increase,” said LeRoy. “The challenge is that we are going to be working on expanding the plant through the next couple of years, so it’s not like you can just go online now and apply for a job.”

The only other P&G plant in the US which produces the same products is located in Alexandria, Louisiana.

“Lima’s in a great strategic location for us,” said LeRoy. “It’s right by I-75. It’s in a great location as far as infrastructure and access to roads that work. Since the laundry detergent is made in the plant it seemed like a natural fit to put the chemicals in there with it, and some of the chemicals being made will also go to some of our beauty care plant locations.

“Lima’s a manufacturing town, so manufacturing jobs coming home is always a good thing for Lima,” he added.

“We were involved from the very beginning working throughout the Cincinnati leadership team, because we were one of three locations that were being considered,” said Jeff Sprague, Allen County economic development director. “We worked with the corporate staff as well as the Regional Growth Partnership (RGP) to pitch the Lima site, and then, once we narrowed that down, the community offered a 15-year, 60% enterprise agreement to entice the project, so we coordinated all that work and provided that last piece of incentive to bring that project to the Lima, Ohio plant.

“We’re going to be creating 51 new jobs at the facility, the total capital investment will be over $60 million, and then the retention of 600 existing employees over the long-term of the commitment are really great things about this project,” he continued. “This is a great facility, they produce great product, and it really locks them into our community for a long period of time and helps them continue to build their business growth globally.”

In early August, P&G announced the results for the fourth quarter and fiscal year 2016.

“The fourth quarter was another period of progress driving P&G’s results to a balance of strong top-line growth, bottom-line growth, and cash generation,” said chairman, president, and chief executive officer David Taylor. “We grew organic volume and sales in all reporting segments. We increased investments in innovation and advertising, funded by strong productivity improvement. Looking forward, we’re committed to continued productivity improvement and cost savings that provide the fuel for innovation and investments needed to accelerate and sustain faster top-line growth. We expect fiscal 2017 to mark another significant step toward our goal of balanced growth and value creation and total shareholder return in the top third of our competitive peer group.”

 

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