Westrock Coffee Co. LLC of Little Rock on Thursday announced a major expansion that will bring new life to the former Kimberly-Clark plant in Conway and grow its global operations.
The company has finalized the purchase of the 524,000-SF plant at 480 Exchange Ave., which it's transforming into the nation's largest ready-to-drink packaging facility. Westrock said it's making a $100 million-plus investment in the project.
The plant will use advanced robotics and other state-of-the-art equipment to manufacture products including canned and bottled cold brew coffees, assorted teas, juice-based products and single-serve coffee cups, and to create and test new beverages.
The first phase of renovations is expected to be completed in the first quarter of 2023. About 50 new jobs will be created. Over time, the number of new positions will grow to 250.
The company is expanding in response to an increase in demand, especially from the retail space, Group President of Operations Will Ford told Arkansas Business after the announcement. According to the National Coffee Association’s Fall 2021 report released in September, national coffee consumption at work has increased by 55%, by 20% at restaurants and cafes, and by 9% while traveling or commuting. That’s a 19% increase in all out-of-the-home consumption, the report states.
CEO Scott Ford, at the announcement, called bottled and canned coffee products “a quickly growing market for us and for everybody in the United States.”
The company has also completed work on a 90,000-SF facility in Johor Bahru, Malaysia, north of the international hub of Singapore on the southern end of the Malay Peninsula. The company said the facility will enhance its coffee roasting capacity and accommodate for increases in manufacturing, packaging and warehousing in the Asia-Pacific and Middle East-North Africa regions.
Finished good production is set to begin in the first quarter of next year.
Additionally, Westrock is expanding its location in Concord, North Carolina, adding two fully automated production lines and modernizing its manufacturing and packaging process for bottled products. The new lines will increase overall capacity of extracts processing at the facility by over 50%. Upgrades to the Concord facility should be complete by the end of 2022.
Westrock acquired the facility in 2019 with its $405 million purchase of S&D Coffee & Tea. At the time, Scott Ford said the combined company would employ 1,700 globally and be able to roast, grind and package more than 220 million pounds of coffee annually.
“Our growth benefits everyone at Westrock Coffee — from our global customers and farmer partners to our current and future employees and the communities where they live," Scott Ford said in a news release. "These facility expansion announcements provide further evidence that we are well on our way to accomplishing our mission of building and efficiently operating the preeminent integrated coffee, tea, and extract supply chain in the world, to enhance the lives of our farmer partners and fuel the success of the customers that we serve.”
Will Ford, asked why the company chose to expand in Conway, said a facility like the former Kimberly-Clark plant wasn’t available elsewhere. Brad Lacy, President and CEO of the Conway Area Chamber of Commerce and Conway Development Corp., brought the building to the company’s attention about six months ago, he said.
“It's the perfect niche, and I think one of Brad’s and the city of Conway’s biggest concerns is how this facility is such a spectacular facility. However, it's really prime for a manufacturing business,” Will Ford said, noting that he doesn’t believe there are many companies that could utilize the space there like Westrock can.
He added that he isn’t concerned about finding talent amid the current labor shortage because Conway has a manufacturing and engineering workforce that includes people who used to work for Kimberly Clark. He is confident that the company can attract the employees it needs with annual salaries around $100,000 and benefits.
Westrock has offices in 10 countries. It sources coffee and tea from 35 origin countries and provides service under both the Westrock Coffee and S&D Coffee & Tea brands.
Scott Ford said the coffee many restaurants sell under their own brand is actually provided by Westrock. “We operate as the brand behind the brands where we give full digital traceability to our customers who then in turn serve the public.” He also said the company is the only one to offer a fully digitally traceable supply chain, meaning their customers can find out who farmed the beans that were used to make their cup of coffee.
The company in September pledged to "responsibly source" all its coffee and tea by 2025, meaning it will purchase and process in a manner that is fair to the people who grow and handle crops, employees, peers and environments.
The company qualified for the following state incentives: the Tax Back program, which provides sales and use tax refunds on the purchase of building materials and taxable machinery; seven years of Create Rebate, an annual cash rebate based on the number of jobs added by a company; and $750,000 from the Governor’s Quick Action Closing Fund.
Westrock's purchase of the former Kimberly-Clark plant is its second expansion in central Arkansas in recent years. The company in 2019 expanded its North Little Rock roasting and packaging plant from 36,000 SF to 52,000 SF to meet growing customer demand. More than 60 full-time positions were added.
“Westrock Coffee and Conway will be an exceptional partnership," Conway Mayor Bart Castleberry said. "I am delighted to welcome them to our community. The city is fortunate to have Westrock Coffee bring its global presence, outlook, and commitment to investing in the lives of their partners throughout the world. I look forward to Westrock continuing their success in Conway and abroad for years to come. I would like to thank not only Westrock Coffee but also the Conway Area Chamber of Commerce for their commitment to Conway.”
Kimberly-Clark announced in 2018 that it was shutting down the Conway facility as part of a global consolidation plan. The plant's fate was tied to a facility in Wisconsin that employed about 400 people. Choosing between the two, the paper products giant kept the Wisconsin plant open after the state promised $28 million in incentives.
About 350 jobs in Conway were eliminated and the facility that had produced brands including Kleenex, Huggies, Pull-Ups and Kotex for more than 50 years went quiet.
In all, the Texas-based paper products giant laid off as many as 5,500 employees, or about 13% of its workforce, as part of the restructuring.
The company's plant in Maumelle remains open.