Speyside barrels begin new era in Jackson

Darren Whitmer, general manager for the Speyside Bourbon Cooperage plant in Jackson, poses alongside an unfinished version of one of the wooden barrels which will be made at the plant once actual production begins on Monday, May 2. The barrels will be made of Appalachian White Oak and will be used specifically to store bourbon.

Darren Whitmer, general manager for the Speyside Bourbon Cooperage plant in Jackson, poses alongside an unfinished version of one of the wooden barrels which will be made at the plant once actual production begins on Monday, May 2. The barrels will be made of Appalachian White Oak and will be used specifically to store bourbon.

Salt, coal, iron ore, automobile parts, kitchen cabinets, and frozen food have all helped to define Jackson County’s long industrial/manufacturing history. However, within just a few weeks, another product will be added to the list when bourbon barrels start rolling out from a revitalized and reborn Jackson plant.

Speyside Bourbon Cooperage, Inc. expects to begin production of custom-made bourbon barrels Monday, May 2, at 960 East Main Street in Jackson. This is following a year-long period of renovating and converting the plant property and facilities to suit its needs as a cooperage, and training a workforce to produce its specialized product.

Speyside Cooperage Limited, a Scottish-owned company, has been producing bourbon and whiskey barrels made of American Oak since 1947. It was acquired by a French-owned company, the Tonnellerie Francois Freres Group (TFF), in 2008. Speyside has one plant in the United States, which opened in 2010 and is located in Shepherdsville, Kentucky, just south of Louisville.

While Speyside has previously been involved only in the refurbishing of used barrels for Scotch Whiskey and other spirits, the Jackson Plant will be its first to manufacture new barrels made of Appalachia White Oak made specifically for the bourbon industry.

The siting of the plant in Jackson represents a major economic development victory for Jackson and Jackson County as 186 local jobs were lost in that same building when Masco Cabinetry closed its Merillat Plant at the end of 2013 as part of a consolidation and efficiency strategy. This came after the loss of approximately 300 jobs in 2007 when Meridian elected to close its Jackson plant just down the street from the Merillat Plant.

As it turned out, the lights at 960 East Main Street were not out all that long as a series of positive factors came together which resulted in Speyside executives changing their initial plans and opting for the Jackson site over one in Kentucky for a new plant building. The decision was announced last May. Darren Whitmer has been Speyside’s point man for the Jackson project from the very start, is serving as its general manager, and he shed some light on the company’s siting decision when the initial announcement was made.

“Speyside Bourbon Cooperage is very excited to be locating in Jackson, Ohio,” Whitmer stated in the announcement. “The location is perfect for us, close to our raw material suppliers, while also being close enough to serve our customers. Everyone that we have worked with from the State of Ohio has been very helpful and welcoming; we know that we made the right choice locating here. We truly look forward to beginning operations here and meeting more of the community and becoming a part of it.”

In a recent interview with The Telegram, Whitmer revealed Speyside had first committed to build a new plant building at a greenfield site in Kentucky, which would have positioned it near its existing plant and also near the heart of the nation’s bourbon distillery industry in Kentucky.

However, on the other hand, Speyside’s supplier of the staves and heading pieces needed to manufacture the new barrels is Ohio Valley Veneer, which is located in Piketon, just 25 miles (by four-lane highway) away from Jackson. And with the Jackson plant empty and available and with it being designed as a woodworking facility, the scales were further tipped in Jackson’s favor. As it turned out, Ohio Valley Veneer purchased the plant from Masco and will be leasing it to Speyside. While this is a mutually beneficial business relationship for the two companies, it will also serve to create and retain local jobs directly, and also contribute to the timber business in the area.

The area’s past involvement in the woodworking-related industry and the availability of a workforce were also plus factors in Speyside choosing the Jackson location. Whitmer says he has already hired a number of former Merillat employees and considers their familiarity with the facilities and the local area as an advantage.

When the opportunity presented itself, state, regional and local economic development officials helped seal the deal by providing both financial incentives and hands-on support to Speyside and the proposed Jackson project. The Jackson County Economic Development Board (JCEDB), the 29-county Appalachian Partnership for Economic Growth, and the state-level JobsOhio were all involved in this successful effort. Jackson City and Jackson County government leaders also have been supportive of the project.

State government provided direct support when the Tax Credit Authority approved a 40 percent, seven year Job Creation Tax Credit for the project. JCEDB staffers Executive Director Jennifer Jacobs and Assistant Director Sam Brady also worked with and for Speyside to secure a $175,000 grant from the Southern Ohio Agricultural & Community Development Foundation (SOACDF) for the purchase of machinery and equipment and later another $48,000 from the Fluor B&W Opportunity Fund to purchase and install three stave manufacturing lines. Speyside’s projected total investment in the Jackson plant will be $17.5 million.

While the Merillat plant produced cabinets and Speyside will make barrels, the building and facilities were designed for wood-related production. Thus, Speyside will be able to utilize the existing boiler and dust collection systems as well as the kilns. “It lends itself to being a cooperage,” Whitmer remarked, while adding that the 39 year old plant was well maintained and was “in good shape” when Speyside took over, another important factor.

For the most part, however, Whitmer says the plant property is being completely overhauled to function as a “state of the art building for the cooperage industry.” He states the facility will be “very ergonomic and safe” with a primarily new design customized to produce its highly specialized product.

For example, Speyside has completely retrofitted and gutted the office section of the building and appropriately, a White Oak floor has been put in place in this area. The initial office layout plan for a new building in Kentucky was modified to work with the much different existing floor layout in Jackson.

There has been an influx of new equipment being installed in the plant in recent months. As of March 17, Whitmer estimated the plant was “75 percent ready,” but that it will require a “last little push” to finish the remaining 25 percent and meet the target production startup date of May 2.

There have already been some spinoff benefits for local and area companies. Geiger Brothers of Jackson has been an integral contractor in completing construction work in and around the building lot. SO&S Electric of Chillicothe has completed most of the electrical work on the property and Zip Systems was contracted to create the signage for the building. Whitmer commented, “we have used many local businesses during the project and while there are too many to name, everyone has been very professional and supportive.” Speyside has stated it expects to use local transportation companies, machine shops, and other contractors and suppliers as the plant moves forward.

As of March 17, there were already 20 employees (15 hourly and 5 salary) with Whitmer looking to add about 20 more production employees by the planned startup date of May 2. By that time, he foresees having about 35 production workers on board with another 10 to 15 office and maintenance employees for a grand total of 45 to 50 startup employees.

Whitmer says future employment prospects will “depend on the market,” but he is cautiously optimistic and says the Jackson plant is certainly large enough to handle additional production and employment if it needs to do so.

In an earlier letter to JCEDB written in support of one of its funding applications, Whitmer wrote, “as the demand for bourbon production and barrels continues to increase, the industry, as a whole, has not been able to supply the demand.”

In his interview with The Telegram, Whitmer commented, “We are anticipating growing in the next 2 to 3 years, if the market is sustaining.” Initially, production will be limited to one shift and Speyside projects an annual payroll to be around $910,000.

Employment applications are being handled through the Jackson County Department of Job and Family Services.

All in all, to this point, it appears the marriage between Speyside and Jackson County will be a mutually beneficial one.

“We are very happy to be here,” Whitmer concluded. “We are thankful we had a grant partnership and we’ve had great help from both the local and state people. And we’ve been very well received. Everybody has been very welcoming.”

JCEDB Executive Director Jacobs feels very good about the fact that not only are new local jobs being created, but that, in this case, money and jobs from abroad are being imported into this area rather than being exported from here out of the country.

“What’s so cool for Jackson County and Southern Ohio is that it’s foreign investment,” she commented. “I see this as being a premier site. It will bring us notoriety with a unique product which is new to us.”

JCEDB Assistant Director Brady also feels this breakthrough with Speyside and the positive attention that comes with it may help with other local economic development projects and prospects.

“It was the hit we needed,” Brady said with an air of hope. “It doesn’t have to replace all the jobs we lost, but it does start a new era.”

Let the barrels start rolling!

From The Telegram News  |  April 19, 2016