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The $11.5 million purchase of the shuttered Danfoss plant and the unveiling of Hostess Brands Inc. signage this year marked a new chapter for the Clark County plant.
Local leaders are hailing the famed Twinkie maker’s arrival as a big step towards restoring the fortunes of an industrial property where hundreds of people have been hired and fired over its 40-year history.
Economic promoters hope the promise of 150 new jobs over the next three years will be just the first batch served up by the cake maker. Hostess is investing more than $120 million to transform the former compression plant into what company officials describe as the bakery of the future.
The Little Rock design-build team of Baldwin & Shell Construction Co. and Cromwell Architects Engineers are working to complete the conversion in the second half of 2023.
“We are on time and on budget,” Hostess CEO Andrew Callahan said at the September 15 corporate sign celebration at Clark County Industrial Park. “It’s always good.”
Arkansas’ initial production will be Donettes, the mini-cake donut with main varieties of powdered, double chocolate, glazed, frosted and crunchy chocolate. Touted as the #1 mini donut brand in America, Donettes is also produced in seasonal Strawberry Cheesecake, Caramel Crunch and Strawberry offerings.
With over 330,000 square feet under the roof, the facility 4 miles south of Arkadelphia will be the largest of six Hostess bakeries. Located on 41 acres, the current factory layout provides enough space to accommodate four production lines. But the company is only building one so far.
Based in Lenexa, Kansas, Hostess operates four U.S. bakeries: in Columbus, Georgia (313,700 square feet); Emporia, Kansas (278,500 square feet); Indianapolis (195,000 square feet); and Chicago (137,000 square feet). The company also operates a 250,000 square foot bakery/distribution center in Burlington, Ontario as part of the acquisition of Voortman Cookies Ltd. in 2020 for $320 million.
Earlier this year, Dan O’Leary, chief growth officer at Hostess, told investors that the factory renovation in Arkansas follows a design focused on sustainability.
“Freed from pre-existing constraints, this facility will leverage all the best practices accumulated across our network of bakeries to become our most efficient and flexible operation,” he said of the company’s commitment. to make the greenest bakery.
To add some financial sugar to the deal, the economic development group is giving Hostess $2 million conditional on creating at least 150 jobs.
The hiring of bakery workers for the 2023 reopening will mark the second time the plant has undergone a manufacturing makeover.
The factory opened as the headquarters of Fafnir Bearings in the early 1980s and employed up to 500 people. In 1987 the factory was closed following the acquisition of Fafnir two years earlier by Torrington Co.
The property remained inactive until 1990, when Carrier Corp. bought it for $6.2 million and invested $100 million to shift production from bearings to residential air conditioning compressors.
In 1995, Carrier’s joint venture with Johnson Controls led to a name change: Scroll Technologies. Employment stood at 575 in 1999 when the factory was named one of the top 10 factories in the country by industry week magazine.
Scroll Technologies was a pride for the Arkadelphia region. The factory was an innovative industrial workshop where employees held 80 product design and manufacturing process patents for next-generation air conditioners.
“It was a fantastic employer with world-class engineers who gave us wonderful jobs for years,” said Bill Wright, an active participant in the Clark County economic development scene for more than 35 years. Over time, the product line expanded to include commercial air conditioning components. At its peak, Scroll Technologies employed over 700 people before overseas manufacturing took its toll.
The company was sold to an international manufacturer of compressors and other refrigeration components in 2006: Danfoss Group of Nordborg, Denmark. From the 2000s, overall employment declined amid waves of layoffs and hiring.
Under Danfoss ownership, the plant employed up to 500 people in 2009. The workforce stood at 170 when its closure at the end of the year was announced in January 2020. Eight months later, Danfoss has sold the property for $5 million to a New York investment firm.
“The plan was to lease it,” said J. Holmes Davis IV, senior vice president and partner in the Dallas office of commercial real estate firm Binswanger.
“We had it on the market for about a year, then Hostess contacted us to buy it late last year.”
Hostess executives cited a streak of year-over-year quarterly sales growth of 9% or more as the fiscal incentive for the company to seek a new bakery location, leading to good news for Clark County.
“A lot of people who walked away from Scroll are interested in coming back,” said Wright, CEO of the West Region of Southern Bancorp Bank of Arkadelphia.