Chattanooga: Chattem plans expansion

Chattanooga: Chattem plans expansion

May 28th, 2009 by Mike Pare in News

Consumer products maker Chattem Inc. is planning the biggest building expansion in its 130-year history with a new $35.5 million facility in Chattanooga.

The company also plans to add up to 70 jobs, which would bring its employee headcount to about 500 in the city, officials said Wednesday. They did not say how much the new jobs will pay.

Zan Guerry, Chattem's chief executive officer, said the company is bringing the manufacture of its Act mouthwash to Chattanooga.

"As a result, we will expand our physical plant by constructing a state-of-the-art facility at our Broad Street location," he said.

Robert Long, Chattem's chief financial officer, said work on the 80,000-square-foot plant will start this summer. The new site, a little larger than an existing facility at the location, is to be up and running by late 2010, he said.

This is the second expansion Chattem has announced in the last six months. Last December, the company said it would spend $7 million on machinery and equipment and add 33 jobs. Mr. Long said 30 people have been hired so far related to that project.

Act is one of five brands Chattem acquired for $410 million from Johnson & Johnson in January 2007. The deal has bolstered Chattem's earnings and, earlier this year, the company announced record revenues and profits for 2008.

Total revenue for the year ending Nov. 30, 2008, was $454.9 million, officials said. Net income for 2008 rose to $66.3 million, according to the company.

"The business is doing well," Mr. Long said. "The product line is performing well in the market. It's good to have manufacturing in Chattanooga."

Chattanooga Mayor Ron Littlefield said the company continues to show its commitment to the city.

"It is an honor to have Chattem as a member of our local business community," he said.

Hamilton County Mayor Claude Ramsey said the project will help the local construction industry.

Trevor Hamilton, the Chattanooga Area Chamber of Commerce's vice president of economic development, said Chattem's growth reflects on the strength of local industry.

"One reason we are weathering the economic downturn is the diversity of our economic base," he said.