By Katie Byard
Beacon Journal business writer
Massillon expects to gain about 250 food-processing jobs as ketchup maker H.J. Heinz plans to close three American plants and shift jobs to other facilities.
The approximately 250 jobs will be on top of 450 existing jobs at Heinz’s frozen food facility at 1301 Oberlin Road SW.
The Pittsburgh-headquartered company is in line to get a Massillon city income tax credit as well as state financial incentives for the $28 million expansion.
Steve Paquette, president and CEO of the Stark Development Board, said Tuesday the incentives are pending local and state approvals.
The new jobs are expected to generate an additional annual payroll of $5.69 million, or about $23,000 per worker.
The jobs are expected to be added to the facility over a three-year period, beginning next year.
Paquette said about three months ago, county, city and state economic development officials teamed up and began developing a package of proposed financial incentives in hopes of winning a Heinz expansion.
The officials did this, Paquette said, after learning from a consultant that Heinz was considering expanding in Massillon and other areas. The consultant didn’t initially reveal the name of the company but local officials assumed it was Heinz, Paquette said.
Last week, Heinz said it planned to shut down three plants in North America in the next six to eight months, cutting 1,350 jobs at the facilities — in South Carolina, Idaho and Ontario, Canada.
Heinz said at the time that it would shift production to five existing plants in Ohio, Iowa, California and Canada, adding a total of 470 positions at those sites.
Heinz, in making the announcement, did not specify which one of its two Ohio plants would expand. The company also has a plant in Fremont.
Heinz declined to comment on the issue last week.
Plans revealed Monday
The news that the Massillon plant would get the expansion came Monday night at the Massillon City Council meeting when city officials discussed a proposed nine-year city income tax credit for the company.
City Council members are expected to consider the job creation tax credit at their regular meeting Dec. 2.
The credit would allow Heinz to save about $513,000 in income taxes paid to the city over the nine years, Community Development Director Ted Herncane said Tuesday. Over the same period, Herncane noted, Heinz would pay $410,000 in income taxes on top of what it is currently paying.
Herncane said the state also is considering a job creation tax credit. Officials with JobsOhio, the state’s private economic development arm, could not be reached for comment. JobsOhio officials typically do not discuss state tax credits until they are approved by the Ohio Tax Credit Authority.
Heinz spokesman Michael Mullen said Tuesday that the Massillon facility “will be a flagship of our North American business, becoming our Frozen Food Center of Excellence.” He said the company is “committed to Ohio and excited for the growth that will come to Massillon as part of this significant investment.”
Mullen said the company looks forward to “continued collaboration” with Gov. John Kasich and the state “as we further our leadership in the frozen food category of our business.
Heinz will employ about 6,800 hourly and salaried workers at plants in Canada and the United States, following the plant shutdowns and the expansions in Massillon and elsewhere.
The two U.S. plants to be closed are in Florence, S.C., which employs 200 and makes Smart Ones frozen foods, and in Pocatello, Idaho, which employs 410 and makes frozen entrees and snacks.
A 104-year-old plant in Leamington, Ontario, set to close employs 740 and makes ketchup.
The shutdowns are the latest in a series of cuts made after the company was acquired in June for more than $28 billion by a joint venture of Warren Buffett’s Berkshire Hathaway Inc. conglomerate and investment company 3G Capital. In October 2010, 3G Capital completed the acquisition of Burger King.
The Pittsburgh Post- Gazette reported this summer that Heinz trimmed 600 office positions in its North American operations, including 350 jobs in the Pittsburgh area.
The newspaper reported last week that layoffs also have come in other parts of the global company’s operations.
In September, Heinz said in a regulatory filing that as of Sept. 11 about 1,200 employees had been affected by its restructuring.
Katie Byard can be reached at 330-996-3781 or email@example.com.