An Omaha manufacturer of butter tubs and ice cream pails is investing more into its hometown of 66 years.
Airlite Plastics Co., which makes and decorates plastic food containers, drink cups and Styrofoam coolers, is building a $57.8 million expansion at its location just north of Eppley Airfield. The addition over the next five years will add 117 jobs with on-the-job-training in an area of the city with high unemployment.
Site work already has begun on the 43,000-square-foot project that will join to the company's more than 500,000 square feet of production floor and storage when completed in late July or August 2013.
Of the project's nearly $58 million price tag, about $7.8 million is for the building itself and site improvement. Airlite CFO Pat Kenealy said the remainder will go toward setting up 20 additional production lines.
The Omaha Planning Board this month unanimously endorsed a request for $1.6 million in tax-increment financing, which uses part of the future property taxes from a development to help pay for improvements. The plan still needs City Council approval.
For many years, Airlite made sporting goods and, with another Omaha plastics company, manufactured most of the fishing bobbers used in the United States. Today, the company produces about 1.5 billion molded containers, decorates more than 1 billion molded containers and processes about 60 million pounds of plastic each year. Most of the tubs and lids are for the dairy, salad and margarine industries.
Airlite was founded in 1946 and moved to 18th and Cuming Streets in the late 1960s. In 1988, the manufacturer bought land at 14th and California Streets and later built a warehouse and opened its printing operations there.
In 1999, the company began a transition to the Riverfront Industrial Park, buying land and finishing a facility to house an office, production floor, warehouse and distribution center. It grew twice in 2002 at the industrial park by purchasing and expanding another production facility and a three-building project for more warehouse and manufacturing space.
Earlier this year, Airlite acquired a plastic injection and extrusion business in Nazareth, Pa., the company's first venture outside of Nebraska. City planner Bridget Hadley told the Planning Board that Airlite had a cheaper option to expand at an existing building near its Pennsylvania operations, but “they want to do it here.”
In recommending approval of TIF for the project, she noted that Airlite is located in one of most distressed areas of the city.
One of the census tracts in the neighborhood surrounding Airlite, for example, had 31.7 percent unemployment and 47.6 percent poverty in 2010. Another nearby tract had 19.3 percent unemployment and 49.5 percent poverty.
Kenealy said the manufacturer's proximity to people who need jobs is an important factor. A majority of Airlite's 850 current Omaha employees — the company employs 57 additional people in Pennsylvania — live within 15 to 20 miles of the plant.
In addition to the estimated 200 to 250 construction jobs that will be created by the project, the expansion is scheduled add 23 jobs in its first year and 27, 21, 23 and 23 each year after, adding about $3.6 million in annual wages by its fifth year.
The jobs added will be packer and material handler positions, mold specialist, mold lead, shift supervisor, floor supervisor and a number of support positions. Pay for these jobs will range from about $11.55 to $25 per hour.
Finding and retaining employees is a challenge for the company because “we compete with other entry-level positions like fast-food joints,” Kenealy told the Planning Board.
Airlite offers an extensive on-the-job training program with three weeks in a classroom setting, about two months on the floor and a review about a month after that if the employee needs more help. The work is repetitive, and Kenealy said the average tenure of an employee is about 10 years, but the company is working to reduce turnover.
“It's an expensive proposition to take someone through training and then they leave shortly after or during,” he said.
Hadley said the project will be a win-win for people looking for employment, for Airlite and for a city seeking to bolster economic development. “(The project) is a great opportunity for Omaha,” she said.
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