Leclerc Foods helping people 'eat their way through recession'

Rick Wagner • Dec 31, 2008 at 12:00 AM

KINGSPORT — Canada-based Leclerc Foods Inc. is making more than granola bars at its new facility, which began operation in the Northeast Tennessee Business Park on Dec. 8.

It’s making a strategic investment in the United States, producing some of its snack food and helping support the local and regional economies.

As the world economy continues into uncertain times of layoffs, closures, bankruptcy and a credit crisis, the family-owned business has created 15 jobs with a total of 80 to 100 projected to come.

The company also projects a $30 million to $35 million investment in Kingsport over three years, including a building project that will almost double the size of the existing 88,500-square-foot building, once home to card maker Cartamundi Inc.

“Right now, we’re close to 20 (million dollars). Once we’re done, we’re going to be 30 (million dollars) plus,” said Jean-Marc Lemoine, executive vice president of Leclerc Foods Tennessee LLC.

Leclerc traces its roots back to 1905 and has survived two world wars, the 1930s fire destroying its plant, the Great Depression and various recessions.

“People eat their way through a recession,” quipped Lemoine, who has lived in the United States for five years and recently moved to Gray.

Looking to the future, two great-great grandsons of the company’s founder are in college but work at the Kingsport facility.

Jean-Sebastien Leclerc is to graduate soon from Bucknell University in Pennsylvania with a business finance degree and come to work full time at the Kingsport plant, while his brother, Alex Alexander Leclerc, has two more years of college to go.

The Kingsport Economic Development Board in July approved a moratorium on the personal property tax on the equipment Leclerc is installing.

Leclerc bought the building and land for $2.7 million, according to property transfer records. The tax break does not include property taxes on the building or the planned expansion.

KEDB officials said that when personal property taxes resume on year six, or 2014, taxes due would be about $150,000 based on a projected depreciated value of $11 million.

The plan is for $15 million of new equipment to go in the first year, $10 million the second year, and the rest the ensuing years. A cracker oven to be installed in 2009 will allow a second production area, with each one eventually to run two shifts a day compared to the one shift a day working now.

Leclerc has four plants in Canada and two in the United States, one in Montgomery, Pa., that opened more than six years ago, and the Kingsport plant at 10444 Wallace Alley St. It also is the home of Leclerc’s U.S. headquarters, research and development.

Lemoine said Leclerc was ready to put a second location in the United States, important because of increasing transportation costs.

He cited the specific need for a U.S. location in the Southeast since its other plants cover Canada and the Northeast well.

“The (Kingsport) Mayor Mr. (Dennis) Phillips, (is) top notch. Everything he’s promised we received,” Lemoine said, adding that Tennessee’s training incentive, the tax incentive and the help of Tommy Olterman, a project manager for the Tennessee Valley Authority, in finding the building also was crucial. Leclerc zeroed in on the old Cartamundi building and the Magnetic Marelli building on nearby Airport Parkway, the latter of which was a finalist for the operation.

He said what helped cinch the deal was the decision of Steve Smith, head of the Food City grocery chain based in Abingdon, to start carrying Leclerc-branded products, those made in Kingsport and elsewhere.

Six of the cookies in Leclerc’s Distinction line will be on Food City shelves in early 2009, as well as four products from the Vital line, two bars and two cookies.

Leclerc also makes about 40 products for Target sold locally.

Richard Venable, chief executive officer of the NETWORKS — Sullivan Partnership economic development group, said the local work force, training opportunities at Northeast State Technical Community College and the ready expandability of the building helped sell Leclerc on the Kingsport location near Interstate 81 and Tri-Cities Regional Airport..

The plant includes state-of-the-art, computer-controlled equipment and robots that prepare the ingredients, make and package the product and prepare it for shipping.

“What we try to achieve is a highly automated facility so we have absolute control over quality. We use our people not to work hard but to work smart,” Lemoine said. “People don’t touch anything. They control equipment.”

Automation also includes a soon-to-start robot that automatically will place and secure cases of the granola bars on wood pallets for shipment, three metal detectors along the production line and a cutting knife that vibrates at 60,000 cycles per minute, keeping it from sticking to the granola bar stock.

The machinery automatically kicks out any product that is, misshapen, mispackaged or too light.

Not in operation yet is an enrobing or coating machine that will apply things like chocolate and yogurt to the bars.

However, it will not apply peanut butter since the facility is certified as a peanut-free operation. In fact, the facility is free of any nuts.

To prevent any contamination, the company supplies all employees with garments, shoes, socks, hair shields and beard shields. In addition, those entering the facility must go through a hand-washing station and 30-second forced-air hallway, all designed to keep things as clean as possible.

The granola bar line can produce 500 bars a minute.

Of the 83,000-square-foot expansion planned for 2009, Lemoine said about 50,000 square feet will be for warehouse space and the rest for production of crackers and cookies.

Leclerc corporate offices are located in Quebec City, Canada. The company manufactures cookies, granola bars, crackers and breakfast cereals for a multitude of customers. The products are sold in more than 20 countries worldwide, although the cereal is not sold in the United States.

For more information about Leclerc, go to www.leclerc.ca.

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