MCP expands in Somerville
Economy fuels demand
In an era of high jobless rates, consumer spending nationwide has slowed, but grooming-products maker Memphis Contract Packaging Inc. keeps expand- ing.
MCP revealed on Monday it has bought a 70,400-square-foot industrial building at Somerville in Fayette County to handle expected sales growth.
Empty industrial space has become scarce in parts of metropolitan Memphis, particularly in outlying areas like Somerville, so Memphis Contract Packaging bought the plant when it went on the mar- ket even though it may be five years before it is fully used.
“A lot of this is just opportunity. There’s not a lot of large commercial space available in Fayette County,” MCP founder Billy Hoard said.
Rather than slump with sluggish consumer spending, Memphis Contract Packaging has gained ground within a lucrative niche — supplying brand- name companies.
Although the recession ended two years ago, the U. S. unemployment rate remained 8.3 percent in July. Layoffs and wage cuts in turn have forced Americans to spend less on grooming products — from $616 per person in 2008 to $582 in 2010, according to the latest survey by the U.S. Bureau of Labor Statistics. That’s tended to aid MCP.
Major corporations looking for lower-priced manufacturing have sent production of high-profile personal care products to the 200-employee company. And MCP’s own Softee line is gaining sales among consumers shopping for value. Major chains including Family Dollar Stores Inc., Walgreen Co. and Wal-Mart Stores Inc.
carry the hair care product.
“If a large manufacturer wants to manufacture a product or introduce a new product they’ll come to us to make the product rather than make large capital investments in their own plant,” Hoard said.
Hoard expects the trend will continue. The familyowned company decided to acquire the building just vacated by Precision Coils, a 90-employee unit of Unison Comfort Technologies, which relocated to a larger plant at Brownsville, Tenn.
Hoard figures spending could surpass $2 million in several years including buying and equipping the building.
“We’ll be making the investment over the next two to five years,” Hoard said. “We really need this space to grow and expand.”
MCP, now among the five largest private employers in Fayette County, intends to continue operations in its present Somerville buildings, which include 130,000 square feet of production space and 60,000 square feet of warehousing.
MCP’s expansion reflects a slow but steady i mprovement in t he Memphis-area industrial economy. Overall, the vacancy rate has edged down to 14.8 percent from about 19 percent early in 2009, said Patrick Burke, a senior vice president at CB Richard Ellis Memphis, a real estate firm which represented Wind Eagle Partners on the sale of its Somerville property to MCP. The building is located at 13745 Highway 59.
Hoard opened t he business in 1988 on the south edge of Downtown Memphis. By then, he had worked more than 20 years as a manufacturing official for Memphis chemical and grooming products companies, including Maybelline and ScheringPlough. He moved MCP to Somerville in 2000 when a vacancy opened in an industrial plant there.