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Procter & Gamble ’Squeezes’ Into New Facility in Northeastern Pennsylvania

Wed January 03, 2001 - Northeast Edition
Mary Reed

In early April 2000, Pennsylvania Governor Tom Ridge climbed into the cab of a bulldozer and ceremonially moved a pile of dirt a few feet, thus inaugurating an ambitious $350-million expansion plan for Procter & Gamble’s Mehoopany, PA, plant.

Situated on the Susquehanna River, at more than l,000 acres P&G’s Mehoopany complex is the company’s largest manufacturing plant of its 60 or so worldwide. Currently employing more than 2,500 workers, it opened in l966 and includes facilities for shipping, raw material handling and storage, a pulp mill and various supporting services for the manufacture of paper products.

Although few details of the expansion project have been made public due to contractual confidentiality clauses, press reports indicate that the job will provide approximately 500 construction jobs during its two-year time frame. The expansion was necessary to house new Bounty and Charmin paper machines and associated converting, drying, waste recycling and disposal system equipment. The first machine, which will produce 75,000 tons of paper goods annually, should be in production by mid-year, with the second expected to start up in December 200l.

As part of the expansion, two huge paper drying machines have been imported from Sweden, where they were manufactured by Valmet Corporation. At the time of writing, the machines are being delivered to Mehoopany from Philadelphia’s Novolog Shipyard. The machines are being sent one at a time because of their enormous size, which also means that they will not be able to take a straight line route.

In order to minimize traffic delays due to the slow movement of the vehicle involved — it is more than 245-ft. long and each load will be l8-ft. wide, about 20-ft. high and weigh more than 300 tons — the journey will take them through several counties and since the truck can travel only l0 to 20 mi. daily, each machine will take about three weeks to reach its destination.

Planning the necessary circuitous route involved the Pennsylvania Department of Transportation as well as state police, who provided an escort for the vehicle. Utility and telephone companies were also consulted since telephone cables had to be moved and traffic lights and overhead utility lines raised above the 20-ft. level so that the huge truck could pass safely beneath them. Line crews traveled with the vehicle in order to be on hand to prevent disruption of services.

Of particular interest to construction industry management is the financing of this massive project, which involves a complex mix of Commonwealth monies as well as P&G’s investment of approximately $350 million. Commonwealth funding includes $50 million in tax-exempt bond financing issued through the Pennsylvania Economic Development Financing Authority (PEDFA), a $l-million Opportunity Grant, $1.05 million in job creation tax credits, $500,000 in Customized Job Training (CJT) funds, and a $1.25-million loan from the Pennsylvania Industrial Development Authority (PIDA) program.

Concerning this funding, Kim Kauffman, executive director of the Pennsylvania Economic Development Financing Authority, explained that the authority “serves as an issuer of tax-exempt and taxable bonds, both in pooled transactions and stand-alone transactions. Bond funds are loaned to businesses and can be used to finance land, building, equipment, working capital and refinancing. These bonds are not guaranteed by the Commonwealth and do not represent Commonwealth funds. They’re typically sold to institutional investors and the proceeds lent to the individual company.

“PIDA,” he continued, “offers low-interest loan financing through Industrial Development Corporations for land and building acquisition, construction or renovation resulting in the creation or retention of jobs.”

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