Pergo May Add New Production Line

Garner, NC, Apr. 28--Pergo is considering a $25 million expansion that would add 60 to 70 jobs at its Garner plant, but the Swedish laminate flooring maker wants commitments of state and local incentives before signing a deal. The Triangle Business Journal reported that the project--which would be in addition to the $16 million Garner expansion Pergo announced in September--would involve a new molding press and production line. Pergo has 300 Wake County employees between its U.S. headquarters in Raleigh and its Garner facility, the company's only manufacturing plant in the U.S. But sources say that state officials in Virginia and Kentucky also are bidding with economic incentives to lure the new production line. Pergo is seeking more than $1 million in incentives from the North Carolina Department of Commerce and other local economic development groups. Real estate sources say that Pergo wants to lease between 60,000 square feet and 80,000 square feet of existing warehouse space and that Craig Davis Properties' new warehouse in its Greenfield North industrial park ranks high on the list of choices. The vacant 122,000-square-foot building is adjacent to Pergo's manufacturing plant. The space would be used to house the new molding production line, which would produce moldings used as a transitional material between the company's laminated floors and other floorcoverings such as vinyl and carpet. Tony Sturrus, Pergo's North America chief executive, and factory manager Bengt Lundgren did not return calls for comment. There is precedent for Pergo receiving state incentives. According to state records, Pergo's parent company in Sweden was awarded $300,000 in 1995 from North Carolina's Industrial Recruitment Competitive Fund after announcing that it would build a $25 million manufacturing plant in Garner. The competitive fund was the precursor to the governor's One North Carolina Fund, a grant program used to attract new corporate investments and jobs to the state. Money is awarded only after the jobs are created. "We have been working with Pergo since the very beginning when they were looking to come here," says Ken Atkins, executive director of Wake County Economic Development. "We have worked with them on projects since that time." Atkins would not confirm recent talks with Pergo regarding incentives for the new production line. In March, Pergo competitor Unilin Flooring, the maker of Quick-Step laminate flooring, was awarded a $2 million grant over ten years from the state's Job Development Investment Grant program. Unilin plans to build an $80 million, 600,000-square-foot manufacturing plant in Thomasville. Sources say Unilin is eligible for almost $12 million in grants, tax credits and site infrastructure improvements from the state, Davidson County and the city of Thomasville. JDIG grants are awarded only to projects whose benefits exceed their costs to the state and that would not locate in North Carolina without the grant, according to the Commerce Department. In September 2003, Pergo announced it would invest $16 million in its Garner operations to add a direct lamination press. The project was scheduled to be operational in January 2005, but the company has yet to begin construction and has provided no further details to contractors. Pergo did not apply for local economic incentives for the project, but it still would be eligible for tax credits under the William S. Lee Act when and if it creates the additional jobs and invests in additional equipment and infrastructure.

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