Economy of Kingdom getting the royal treatment

Economy of Kingdom getting the royal treatment

Hedbor, Eloise Roberts

The new millennium is starting off well in most parts of Vermont’s Northeast Kingdom. “There’s a lot going on there,” said Charles Carter, executive director of the Northeast Vermont Development Association. “It’s very encouraging.”

Arguably Vermont’s most lovely and unspoiled region, the “Kingdom” has for years paid an economic price for its breath-taking beauty. Unemployment has typically run significantly higher than in other parts of the state and wages have been lower. While that remains the case, unemployment rates for the tri-county area – Essex, Orleans and Caledonia have continued to fall over the past year, as manufacturing, with its higher paying jobs, continues to grow here. The latest state figures for June show an unemployment rate of 4.3 percent in Newport, down from 5 percent a year earlier, and St. Johnsbury posted a rate of 3.2 percent, virtually the same as last year.

But because it started with a larger available labor force, the Kingdom employers have not yet encountered quite so severe a problem of not being able to fill jobs. The lack of employees has actually held back business growth in many other parts of the state.

Steve Czik, vice president of Sheftex, a Montreal-based manufacturer of comforters and other bedding, said the availability of labor was one of the most important factors that prompted his company to open a new plant in St Johnsbury. Early last winter, the company was only a glimmer in the eye of local development officials. But an available building – the former Ames store on Hospital Drive in St Johnsbury and a favorable reception on the part of the community, as well as government assistance and, of course, a good labor pool, all helped seal the deal for St Johnsbury.

Sheftex opened its doors in February and began actual production about a month later. By mid-July, Czik said, the company had hired 50 people in St Johnsbury, primarily as stitchers and warehouse workers, and was “actively looking” for more. He projected the company would be employing 100 by the end of its first year.

Sheftex markets throughout Canada and the United States. Production from this plant is destined primarily for the American market, Czik said, and is distributed through outlets like Linens & Things, and Bed, Bath & Beyond. The company also signed an agreement to be the exclusive producer of Umbra bedding.

Another “stitching” business new to the region is Vermont Teddy Bear Co, based in Shelburne. Mary Paull, who works with Carter in the NVDA’s Newport office, said she received a call from a Burlington area real estate agent last October. She said the company, which makes, dresses and delivers custom teddy bears, figured there might be some stitchers available following the closing of Hedma in North Troy. Bear was hoping to find some space in the Kingdom in order to take advantage of that potential labor pool.

Five weeks later, the company moved into about 5,000 square feet in the former Prouty and Miller Building in Newport on the Lake Memphremagog waterfront and had 20 people working there. By this July, Vermont Teddy Bear was occupying all 12,000 square feet available in the building “and bursting at the seams,” said Paull. “They had 75 people working there the last I heard.”

Also growing rapidly is Newport Canvas, which makes imprinted canvas accessories. In the last year the company established its own industrial silk screening facility (Newport Color) and has grown from 9 to 24 employees since December.

The past year has also seen some encouraging expansion of existing businesses. One of those is Lydall Westex, formerly Engineered Thermal Systems Inc, which is just completing construction of the 80,000-square-foot plant off Pierce Road, across the river from the current facility. Their new plant “dwarfs the existing one,” said Carter.

At the groundbreaking ceremonies for the new facility, Aminta Conant, plant operations manager, said the new state

of-the-art manufacturing facility would not only create new employment, but also help the company “become more competitive in the global economy.”

The company currently employs about 150 and could add up to another 100 jobs over the next few years, said Carter. Lydall Westex makes thermal/acoustical barrier and heat shielding for the automotive industry.

Vermont Aerospace in St Johnsbury, which produces sheet metal and does precision machining, has seen its employment go from about 100 to between 130 and 150, said Carter.

Even temporary setbacks seem to be quickly reversed. Gilman Paper, which produced blueprint paper, closed its doors, the victim of declining demand for traditional blueprints. But the plant was bought by the American Tissue Company and is now back in operation and has hired back about 130 of the 150 who had worked at Gilman.

The woodlands that cover much of the countryside in the Kingdom continue to provide a solid foundation and a lot of the raw material for the region’s manufacturing base. Ethan Allen Furniture, which operates plants in Orleans, Island Pond and Beecher Falls, manufactures an expanding line of fine wood furniture from traditional and classic to contemporary styles.

In the past two years, the company has introduced EA Kids, furnishings for youngsters, and has expanded to exterior decorating with its Home & Garden collection. It has about 1,200 employees at the three sites, said Carter.

Columbia Forest Products of Newport, producer of hardwood veneer, has about 350 employees. Newport Furniture/Newport Gliders producers components for several of the region’s furniture makers and also manufactures gliders in a number of different styles. Employment there has continued to climb and now stands at between 90 and 100. The company has recently expanded to a 20,000- square- foot facility in North Troy, said Carter.

The Lyndon Furniture Company, a manufacturer of fine hand crafted furniture, also is continuing to see strong growth, said Carter, and is dding another 45,000 square feet at its facility in the St JohnsburyLyndonville Industrial Park.

In addition to its standard line, Lyndon Furniture builds’ custom pieces to meet customers’ unique requirements. But this year its greatest point of pride is the fact that founder and president David Allard was named Vermont Small Business Person of the Year for 2000. This caps a decade of stunning success and growth. Since 1993, employment at Lyndon Furniture has grown from 26 to more than 100 today, and last year it was named the state’s fastest growing company over the last five years, with sales up more than 500 percent for the period.

Last year the company added 35,000 square feet to its facility in the St Johnsbury/Lyndon Industrial Park, and this year, the company completed expansion of its Concord plant. The company now has about 115,000 square feet of production space. Allard started the company in 1979 in the basement of his father’s home.

Newport Furniture, which supplies hardwood furniture components to a number of the region’s major furniture makers, like Lyndon Furniture, and also manufactures its famous Newport Gliders, has spun off a new company, Newport Paneling. It’s located in the former Hedma facility in North Troy. The new company produces solid wood panels. In the last year the company had 82 employees. Today the payroll is around 100.

The wooded hillsides of the Kingdom also supply the raw material for other businesses, including Maple Grove Farms. When the sale of Maple Grove to B & G Foods, a New Jersey-based company, was announced two years ago, many feared it might mean the landmark business would leave the area. But B&G has made good on its pledge that Maple Grove would stay in St Johnsbury, its home since 1915, and continue to grow.

Steve Jones, vice president of Maple Grove, said the parent company has invested more than $1 million into facilities in St Johnsbury. Those improvements include a new state-of-the-art kitchen and high-speed bottling operation. At last year’s ribbon cutting for the expansion project, Dave Wenner, the president of B&G Foods, said his company had been very pleased with its acquisition of Maple Grove.

“We’re delighted with St Johnsbury, we’re delighted with Maple Grove and we’re delighted with the magic of Vermont. It’s the No. 1 selling maple syrup in the country.”

The improvements have increased production capacity and provided

Maple Grove with the resources it needed to develop new products,

said Jones. The kitchen is now AIB (American Institute of Bakers)

certified, said Jones, and “that has moved us into the 21st century and

expanded our ability to sell to certain (upscale) accounts.”

In addition to the infusion of much-needed capital, B&G has brought to Maple Grove “a wealth of knowledge of market information, sales history – we really have learned a whole new way to look at things,” said Jones. In the first two years that B&G has owned Maple Grove, the St Johnsbury company has seen sales increase by 15 percent each year.

So far the changes have not made a big impact on employment, said Jones, with the number of workers here currently between 100 and 110.

“The increased efficiency somewhat offsets the need to increase jobs,” he said. But when the time comes to add a second shift, employment here could really jump. And that, Jones predicted, may happen “sooner rather than later.” This facility is just introducing a new product line and “we look to keep increasing sales pretty dramatically. Like many Northeast Kingdom companies, Maple Grove is expanding its presence on the Internet,” said Jones. In just one year, Internet sales have gone from nothing to 10 percent of the company’s entire sales.

Maple Grove is a big tourist attraction for this region’s rather low-key tourism industry. Skiing in the winter, a wide range of summertime activities and stunning fall foliage all bring visitors to the Kingdom.

But tourism has not been that bright a spot for the region, said Darcie McCann of the Northeast Kingdom Chamber of Commerce. A bank recently called the loan it had made to Burke Mountain and the skiing facility is up for sale.

“They did so many things right,” she said, and saw their visitor numbers double in four years, but were unable to make the finances work. The weather of the last two winters was a big factor in Burke Mountain’s problems, she said.

And now this cool and wet summer has also not helped tourism either. Advertising and promotion have been successful in generating increased tourist interest in the Kingdom.

“Our inquiries here at the Chamber have never been stronger,” said McCann. “Even gas prices have not been any sort of problem. It’s really been the weather.”

McCann said she went by the public beach at Joe’s Pond recently and, “There were three people there. Usually that beach is full on a Sunday in July.”

But with the exception of the tourism industry, business and industry in the Northeast Kingdom is looking very good indeed.

“I think people are a lot more positive about Newport,” said John Ward, Newport City manager.

Downtown revitalization really started here about five years ago and is continuing to accelerate. Some projects are large and expensive like updating infrastructure, like sewer lines and streets. Other projects are small but may strongly influence resident and visitor perception of a community. For instance, said Ward, he’s been spending a small amount of money to hire people to trim and mow along the roads leading into the city, and to generally keep areas like city rights-ofway looking tidy.

The Community College also has helped the city and we’re working on getting a regional technical center. If that comes through, that is really going to make a difference in Newport,” said Ward. A technical center, providing education to both secondary students and adults, would help provide area industries with the skilled workers they need to grow and thrive.

“One thing feeds on the other,” he said. “There are a lot of people working to help Newport, from Governor Dean on down. I think we’re starting to break through – it’s wonderful!”

“I think we’re in the catbird seat,” said Paull. “There is a pulse in the community that I’ve never seen. There’s a new pride in the community… People seem more willing to step out on the diving board and take a chance.”

Copyright Boutin-McQuiston, Inc. Aug 01, 2000

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