Dannon plant improvements on Fort Worth Council agenda

By Scott Nishimura snishimura@bizpress.net

The Dannon Co., a 35-year denizen of the near South Side, plans a plant upgrade to enable it to increase yogurt production and is asking the city of Fort Worth for up to $320,625 in incentives over five years. Michael Neuwirth, a spokesman for the White Plains, N.Y., company, and plant director Pere Costa Torrent said in interviews March 17 that Dannon plans changes in equipment in two phases beginning this year and ending in 2016.

The improvements will enable the plant at 1300 W. Peter Smith St. to handle new products and varieties, they said. “It’s just about having efficient equipment in our factory,” Neuwirth said.

To receive the full incentive, Dannon committed to retaining 140 full-time-equivalent employees – about the number it employs today at the plant – and hiring 15 more by the end of 2014 and an additional 20 by the end of 2016. The company also committed to investing $21 million in equipment and other business property by the end of 2017. The incentive would amount to up to half of the additional business property value that Dannon adds to the tax rolls. The City Council will vote on the incentive March 25. The first phase of the upgrade will be done this year, Costa Torrent said. The Fort Worth plant, one of several Dannon has in the United States, produces the Light & Fit, Dannon, Activia and Danimals brands. Neuwirth and Costa Torrent declined to say what new products Dannon might bring to the plant.

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“For competitive reasons, we’re not confirming what specific products or innovations are going to be made there,” Neuwirth said. Dannon’s market has dramatically changed in recent years. Greek yogurt products make up 50 percent of Dannon’s market today, compared with less than 5 percent five years ago, Neuwirth said. Greek yogurt requires three times the milk of traditional yogurt, he said. The Fort Worth plant doesn’t make any Greek varieties. Dannon bought the 200,000-square-foot plant in 1979. Hemmed in by surrounding properties, Dannon has never expanded the footprint and the new upgrades won’t include an expansion either, Neuwirth said. “We continually update and modernize it,” he said. “We are almost always in a state of construction.” Dannon isn’t considering other plants for the upgrades it plans in Fort Worth, Neuwirth said. “I wouldn’t characterize this as competitive,” he said.

To get the full incentive, Dannon would have to comply with several terms. Other terms of the incentive agreement are as follows: * Of the $21 million in investment, $9 million must be done by Jan. 1, 2015, and the rest by Jan. 1, 2017. * Of the new employees added, 30 percent must be Fort Worth residents, and 25 percent of those from inside Loop 820. The central city number can overlap with the total. * Thirty percent, or at least $150,000, in spending for supplies and services must be with Fort Worth companies, and 25 percent, or at least $125,000, with local minority and women-owned businesses. Those numbers can overlap.