Textile company founders renew pledge for 1,000-employee plant in Pikeville

Textile company founders renew pledge for 1,000-employee plant in Pikeville

October 9th, 2018 by Dave Flessner in Business Around the Region

Karim Sadurrdin, right, the CEO of Textile Corporation of America, and his brother, Rahim, the chief operating officer, talk about the status of their company during an Industrial Development Board meeting in Pikeville. / Staff photo by Dave Flessner

Mowers cut the grass around the Textile Corporation of America plant in Pikeville. Company officials are using the 186,000-square-foot facility for distribution, but they expect to begin at least limited production before the end of the year. / Staff photo by Dave Flessner

Mowers cut the grass around the Textile Corporation...

PIKEVILLE, Tenn. — The co-founders of a new U.S. textile company renewed their pledge to Pikeville officials this week to build Bledsoe County's biggest manufacturing facility over the next three years by capitalizing on the demand from the medical, hospitality, military and other industries for American-made products.

Textile Corporation of America (TCA), which promised more than a year ago to convert an abandoned automotive parts plant here into a 1,000-employee textile mill, has so far hired fewer than two dozen workers and not yet installed any stitching or embellishing equipment in the 186,000-square-foot plant built by Dura Automotive here before its closing in 2005.

But Karim Sadruddin, a third generation textile industry veteran who is chief executive of TCA, told the Industrial Development Board in Pikeville he expects to soon begin hiring more workers and to reach the 1,000-employee staffing level at the Pikeville plant by 2022, if not sooner.

"We continue to progress and to have the support of our partners, customers and supporters as we take the steps to build this business," Sadruddin told Pikeville community leaders Monday night in an update on the delayed startup venture. "We're very committed to Pikeville and we appreciate the support we have been given."

During a meeting with community leaders Monday night, top officials with Bledsoe County government, the Bledsoe County Chamber of Commerce, the Southeast Tennessee Development District and the Tennessee Department of Economic and Community Development all voiced support for the project and urged community members to be positive about the developing business.

"All of us wished it would have progressed faster, but I have always been optimistic and confident about this project," Bledsoe County Executive Greg Ridley said.

Ridley noted that with the new owners, nearly $26,000 in property taxes was paid on the plant this year for the first time since local government took over the abandoned facility in 2005.

Karim and Rahim Sadruddin, the brothers who control Textile Corporation of America, appear with Bledsoe County Executive Gregg Ridgley during an Industrial Development Board meeting in Pikeville. / Staff photo by Dave Flessner

Karim and Rahim Sadruddin, the brothers who control...

Beth Jones, director of the Southeast Tennessee Development District, said Americans have grown to expect immediate results and deliveries to what they want.

"We absolutely have to give this company time to get their business model in place and rolled out effectively," he said. "They are making an investment; they want to create jobs, and we just have to be supportive of that."

Tennessee's Department of Economic and Community Development provided Textile Corporation of America $3 million in a fast-track grant last year, which the company used to buy the abandoned Dura plant from the Industrial Development Board for $850,000 and to make upgrades in the facility to prepare the complex to operate as TCA's headquarters and production facility.

During the announcement of the TCA venture in July 2017, company officials initially said they expected to start hiring workers last summer and to begin production a year ago. TCA pledged to pump at least $27.1 million into the project, in addition to the state's $3 million grant.

But the company has been mired in legal and financial disputes among its original partners, resulting in lawsuits and counterclaims with charges of fraud and misappropriation of funds.

The Sadruddins said their family has operated mills in Pakistan with more than 3,000 employees and their family is one of the top textile exporters in Pakistan. But in court filings this summer, lenders to TCA said the founders were unable to come up with enough cash to buy the plant and after acquiring the plant with borrowed money, they used the plant as collateral for other loans. One lender even tried to foreclose on the plant.

Rahim Sadrudin, the chief operating officer for TCA, said the foreclosure action was dismissed and some of the former partners in the business, including Chattanoogan Ed Cagle, are no longer involved in the company. Cagle insists he still owns part of the company, although the Sadruddins are running all of its operations.

"We want to do everything right, and so far we have progressed and continue to progress with honesty and doing it the right way," Sadruddin said. "We're meeting with potential customers now and at the end of the day we're going to do exactly what we said we were going to do."

Sadruddin said the company has more than 20 employees in Pikeville and the Atlanta area and he is "absolutely" convinced the company will grow to three shifts over time.

"We've added a few more people and, as we get our equipment in we'll start more hiring and training," he said.

Sadruddin said initial pay for those hired at the plant will start at $8.50 to $10.50 an hour, but workers will also get medical benefits, bonuses and other benefits that raises the total compensation above $11 or $12 an hour.

Pikeville Mayor Phil Cagle said he wants TCA to succeed, but he questioned if the company could draw enough workers for a major mill at such wage rates in the current economy when the average manufacturing wage in Tennessee in August was $20.10 an hour.

"You can get good people to work here, but you're not going to get them at $8.50 to $10.50 an hour," Cagle said. "People aren't going to quit $13 and $14 an hour jobs to come back to Pikeville with those wages."

Rahim Sadrudin said the company "knows what it takes to have a happy employee and what that means for the company." But he said the economics of textile production in the United States, especially for a startup company, will require initially that wage rates at the new mill be lower than at many factories.

Job listings with the Tennessee Career Centers for TCA jobs starting at $8.50 an hour have already attracted 300 applicants, Sadruddin said, and Ridley said hundreds of Bledsoe County workers leave the county every day to go elsewhere to work and many would prefer to stay at home.

Contact Dave Flessner at dflessner@timesfreepress.com or at 757-6340