Essel Propack, the company that makes tubes for cosmetic and personal care items at Airside Industrial Park, is about to receive up to $660,000 in incentives for an expansion that was announced nearly three years ago.
Danville City Council will vote later this month on whether to approve an ordinance to anticipate a $330,000 loan and a $330,000 grant from the Virginia Tobacco Commission’s Tobacco Region Opportunity Fund for the company.
Loan and grant money will be provided to the company in exchange for its investment and job creation due to the expansion.
In December 2018, Gov. Ralph Northam announced that Essel Propack of America, LLC would invest $31.2 million and create 45 new jobs at the park to expand its manufacturing operations.
“This is just appropriating the funds from their … expansion,” Danville Economic Development Director Corrie T. Bobe said during an interview at her office Tuesday.
The amounts Essel Propack will receive from the loan and the grant will depend on how much investment it has made and how many jobs the company added, Bobe said. Amounts from both the loan and grant will be prorated based on the figures the city receives from the company.
“The amount provided will equal the amount earned,” she said.
Bobe said she did not yet know how many jobs were added or how much money was invested by the company.
“We are working with the company to finalize the numbers,” she said.
Once the city finds out those figures from Essel Propack, Danville officials will then request the appropriate amount of money from the Tobacco Commission, Bobe said.
“We hope to confirm the final numbers with the company in the very near future,” she said.
However, based on preliminary data, it looks like the company exceeded its investment obligation, Bobe added.
Under an agreement, Essel Propack would make its investment and create the additional jobs over three years. The jobs would pay an average of $45,000 to $47,000 annually.
Hair and beauty care products and pharmaceuticals are driving a lot of growth, Parag Chaturvedi, the India-based company’s head of operation in the United States, told the Danville Register & Bee in December 2018.
The expansion was not to include added space to the facility, but entailed addition of more equipment, Chaturvedi said at the time. It will enable the company to increase production in Danville through the introduction of what it calls super-high output tubes (SHOT) technology.
“We’ll be able to turn around orders faster for the customer,” Chaturvedi said.
The new jobs were to be high-skilled positions mostly in printing and graphics.
Founded in 1982, Essel Propack is headquartered in Mumbai, India.
Essel Propack’s Danville facility started up in 2002 and is the first and only manufacturing site in the United States.
The Virginia Economic Development Partnership worked with the city of Danville and the Southern Virginia Regional Alliance to secure the investment opportunity for Virginia.
Around the time of the announcement in 2018, Northam approved a $150,000 grant from the Commonwealth’s Opportunity Fund to help Danville with the project.
The governor also approved a $300,000 performance-based grant from the Virginia Investment Performance Program, an incentive that encourages capital investment by existing Virginia companies.