Protomet to bring 200 jobs to Loudon Co.

7/3/2017

Protomet Corp. will remain in East Tennessee, but a $30 million expansion won’t take place at its longtime home in Bethel Valley Industrial Park.

Instead, the Oak Ridge-based company will bring 200 jobs back to the Maremont muffler plant in Loudon County, which closed in 2013, Protomet founder and CEO Jeff Bohanan announced.

Since the Loudon facility is only a half-hour away, Protomet’s Oak Ridge headquarters will remain in operation, keeping those jobs local, he said.

“We’re not talking about moving our employees or our equipment to that (Loudon) facility,” Bohanan said.

The $30 million investment and hiring will take place over five years, Bohanan told a crowd of several dozen blue-shirted Protomet employees in front of the current plant on Larson Drive. A line of state and local officials turned out for the announcement.

Protomet is getting several state and local incentives for the Maremont move, officials said.

The state Department of Economic and Community Development, the Oak Ridge Industrial Development Board and the Loudon County Economic Development Agency worked with Protomet for more than a year to keep the expansion local. Bohanan had looked at sites farther afield, including outside Tennessee.

He said the state is contributing $1.5 million to reimburse some renovation costs. By reusing an old industrial building to provide well-paying high-tech jobs, the project “basically hits every check-box” the state looks for in incentive programs, Bohanan said.

Jamie Stitt, Tennessee deputy assistant commissioner of business development, wouldn’t comment on that or any other state incentive of monetary value.

“Our incentives are not finalized at this point in time,” she said.

But the state will continue to help Protomet in several ways, Stitt said: A state liaison will connect Bohanan with relevant agencies and programs, and the state Department of Labor and Workforce Development will help with hiring for the new plant.

Loudon County officials are providing Protomet with a 10-year payment in lieu of taxes, or PILOT, said Jack Qualls, executive director of the Loudon County Economic Development Agency. That will offer a 100 percent abatement of property taxes for the next five years, and a 50 percent abatement for years five through 10, he said; but Qualls was unsure of the PILOT’s total projected value.

Protomet has consistently exceeded the number of jobs and amount of investment required by previous incentive packages, Bohanan said.

The company announced in January 2016 it would add 100,000 square feet of factory space, and up to 200 new jobs over five years. The company, which Bohanan founded in Oak Ridge 20 years ago, now employs 110. Protomet expanded several times on its current site in the Bethel Valley Industrial Park. The firm expanded several times, but eventually ran out of room. It has grown more than 20 percent annually in recent years, according to the announcement.

“Originally our plan was to make the expansion happen here at the existing (Oak Ridge) facility,” he said.

To that end, the company bought nearly 20 acres of adjacent land. But it was irregular ground, which would have required lots of preparation work and still wouldn’t have been ideal, Bohanan said.

“The property can be used in the future for an expansion, but this specific expansion – the way it needed to fit – just would not work on this site,” he said.

Protomet spent $60,000 on testing the adjacent acreage before deciding it wouldn’t work for the desired expansion, Bohanan said. That led him to look “both inside and outside Tennessee” - and fortunately to find the Maremont plant, which had been empty for several years.

“It needs a lot of TLC,” Bohanan said. He plans to begin renovation work immediately.

“We actually signed a lease on that last night at 5 o’clock,” Bohanan.

The Maremont facility is much bigger than Protomet’s planned expansion. According to commercial real estate listings, the former muffler factory at 2400 Maremont Parkway includes about 350,000 square feet of warehouse space, about 160,000 square feet of factory floor, and about 17,000 square feet of office space. Loading docks and smaller features fill out the total of roughly 605,000 square feet.

“We’re occupying 244,000 square feet of that,” Bohanan said. Another company is using the other side of the building for storage, he said.

The building was built in 1969 on 44.7 acres, and expanded in 1974. About 220,000 square feet of expansion space is available. The site has access to the Norfolk Southern rail line and Interstate 75.

“We’ll be both an owner and a tenant in that building,” Bohanan said. Only Protomet’s occupancy will be visible from the road, he said.

Revival of the Maremont plant will benefit other Loudon County businesses, starting with restaurants when blue shirted Protomet employees arrive to eat, he said.

“It’s exciting to think about the impact we will ultimately make in Loudon,”Bohanan said.

Bohanan said David Bradshaw, former mayor of Oak Ridge and now president of Pinnacle Bank, is the non-employee with the greatest impact on Protomet’s growth.

Bradshaw said Oak Ridge officials did all they could to keep Protomet’s expansion local. But companies’ daily choices can mean success or failure - and Protomet would be an attractive company for any area in the country to entice, he said.

“Thank goodness our friends in Loudon County had a facility that would work,” Bradshaw said. That kept existing Protomet jobs in Oak Ridge, and the new ones still in East Tennessee. Bradshaw said he expects Protomet’s next expansion will be built on its adjacent land in Oak Ridge.

“The expansion that may occur here one day will only occur if this company remains healthy,” he said.

Protomet will take official possession of the building at the beginning of 2018, but renovation will start almost immediately, Bohanan said. Lots of work is needed, including a new roof; about $4 million will go into the building, and $26 million on new equipment, he said.

“Our intention is to be up and running in the spring of 2018 and to be fully operation sometime in the first half of 2018,”Bohanan said.

Startup at the new facility will require hiring 20 to 25 more workers, he said. Some interviewing will start almost immediately, with some hiring possible this year, but most of those new hires won’t be made until 2018, Bohanan said.

Many of the new plant’s capabilities will mirror or complement the existing Oak Ridge plant 30 miles away, but the increased capacity will let Protomet take on bigger projects as well as related, but diversified, tasks, Bohanan said.

For more than 40 years Maremont Exhaust Products provided hundreds of jobs in Loudon County. The plant employed more than 400 as late as 2011, but declined steadily after that.

In mid-September 2013, Maremont managers announced the factory would close in 30 days, eliminating the last 150 jobs. Jim Kozar, Maremont vice president and general manager, said at the time that the muffler plant had lost its largest customer.

Source: Knoxville News Sentinel, by Jim Gaines

The East Tennessee Economic Development Agency markets and recruits business for the 15 counties in the greater Knoxville-Oak Ridge region of East Tennessee. Visit www.eteda.org

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