Rheinfelden Americas LLC of Clinton wants to grow and thrive, but tariffs and a competitive market threaten to curb that success — prompting an ambitious plan by the company to invest in themselves, while urging a little help from local government officials in the process.
Rheinfelden Americas has proposed making a taxable investment of $8 million into the aluminum slug production facility located at 520 E. Railroad St. in Clinton.
Gari Gordon, Rheinfelden America’s general manager, said that for Rheinfelden to achieve its medium-to-long term strategy, it must upgrade equipment and utilize cutting-edge technology, while investing heavily in the workforce to improve their skills and knowledge.
That would require an $8 million investment, starting in 2019, to increase production capacity and provide the capability to enhance product specifications that will meet ever-increasing requirements of customers, said Gordon.
“Your assistance, including financial incentives, will be critical in our success,” Gordon stated.
On Tuesday, the Clinton City Council unanimously approved incentives in the amount of $49,160, which will amount to 50 percent of the company’s annual property tax over a five-year span, from 2020 to 2024. The Sampson County Board of Commissioners will consider a similar incentive package next week, that one proposed as $101,393 in grant backs over the same five-year period.
The company purchased the former Aludisc building and equipment at the end of 2014 with the intention to run a renovated and expanded aluminum disc production facility that would tap an American market, notably providing aluminum slugs for aerosol cans.
Local incentives were provided in 2015 for the creation of jobs and tax base.
Gordon, in a letter to John Swope, executive director of the Sampson County Economic Development Commission, urged support of Rheinfelden’s strategy “to become the premier supplier to the global aluminum packaging market.”
There are obstacles in that quest, he noted.
“There are significant competitive pressures on our industry from substitutions and the recent imposed tariffs driving increased costs,” said Gordon. “For all of those reason, we recognize we must become a center of excellence in our industry if we are to survive and thrive as a company.”
Rheinfelden Americas is jointly owned by CCL Industries Inc., based in Ontario with U.S. headquarters in Pennsylvania, and Rheinfelden Semis, a leading European producer of aluminum slugs based in Germany. They are two global industries involved in aluminum container production.
Rheinfelden’s Clinton facility was the site of fire back in January, but it wasn’t major. The need for repairs was the catalyst for a move to renovate, rebuild and grow operations.
“It only impacted a portion of the plant,” Swope said of the fire, “but they have taken that time not only to repair the damage from the fire, but also to start upgrading equipment to make the plant more productive in numbers, and also improve quality.”
Rheinfelden would not create additional jobs as part of the proposed $8 million investment in production equipment. It is currently committed to creating a total of 69 jobs by 2021 within its current grant-back incentive agreement approved in 2015. Those incentives are still ongoing under the previous plan.
Under those initial grant-back incentives, the company proposed to create 69 total jobs with an average wage of $35,577 and bring $12 million in taxable investment to Sampson. Of the 69 total jobs, the company was to create 32 in 2015 and another 25 in 2016, with the rest coming in later years.
Now with its Clinton footprint established, Rheinfelden is seeking more grant-back incentives to grow that footprint.
“What we are requesting a second group of grant-back incentives for an $8 million investment they are proposing to make to further improve the quality of the plant,” Swope noted. “So they would be replacing or adding to some of the production equipment that would make it a ‘center of excellence,’ as it’s been called.”