Staff Photo by Dan Henry
Robert Long, CEO of Chattem, left, and Greg Lewis, director of engineering, speak about a $35 million expansion project at Chattem of Chattanooga.

A multimillion-dollar expansion at Chattem will bring ACT mouthwash production in-house with more brands to follow.

Chairman and Chief Executive Officer Zan Guerry said the move is a return to the company's emphasis on local manufacturing.

"We have a long history of manufacturing in Chattanooga, and this just continues that tradition of efficient manufacturing here," Mr. Guerry said.

Construction is under way on the initial phase of the project, an $18 million investment on an 85,000-square-foot facility that will house the ACT manufacturing line, but Chief Financial Officer Robert Long said the total project is expected to cost around $35 million.

"We'll be at about 50 percent capacity after we get ACT in," Mr. Long said. "There will be a lot of room to bring in other products."

Chattem markets and manufactures a variety of over-the-counter health care products, toiletries and dietary supplements including Aspercreme, Gold Bond, Cortizone-10, Dexatrim, Selsun Blue, Bull Frog, and Icy Hot.

Currently, the company manufactures Gold Bond lotions at its 3550 Broad St. location as well as Selsun Blue and much of its Bull Frog products and Icy Hot creams. Chattem also packages its tablets in its local facilities.

Mr. Long declined to say which of its products may be added later.

Construction is expected to be complete next year, and the equipment should be installed, tested and ready for operation by October or November of next year.

Continued phasing in other products could take place in 2011 or 2012, he said.

But the company's focus now is on bringing ACT production in-house, which Mr. Guerry said is Chattem's fastest growing brand.

"To be able to manufacture ACT in-house and continue to build on the ACT franchise and to produce it all locally is an outstanding benefit to Chattem and the community," Mr. Guerry said.

The company will begin hiring 60 to 70 workers in early summer to operate the ACT production line, Mr. Long said.

This expansion is in addition to a previous round of hirings that added more than 30 employees to Chattem's local work force.

There currently are about 480 Chattem employees in the Chattanooga area, company officials said.

Mr. Guerry said the new facility, being called Plant 3, will produce about 5 million gallons of mouthwash a year and should double sales from about $40 million when Chattem acquired ACT in 2006 to about $80 million.

"This is clearly the most significant investment in terms of dollars of manufacturing capacity that Chattem has ever made in its history," he said. "We are very excited."