Snack food maker McKee Foods Corp. is seeking the state's OK to begin work this month on a $225 million expansion to a Collegedale plant that will grow its headcount in the city by 480 jobs.
"Business is good," said Mike Gloekler, McKee's communications manager. "Interestingly enough, we got a little boost from COVID-19. People are having more meals at home."
Site work is planned to begin on a 307,550-square-foot expansion to boost capacity and add new product lines. Completion is slated for late 2022 or early 2023, Gloekler said.
McKee, which is seeking a state permit to alter several streams on the Apison Pike parcel holding Plant 5, said in a document that the company had also looked at acquiring a 60-acre tract at Enterprise South industrial park for the expansion.
But company officials decided against the idea of building about 12 miles away from its existing Collegedale facilities, citing high costs and an inability to share manufacturing delivery systems. The company said the Enterprise South tract also is controlled by Volkswagen, which has a nearby auto assembly plant.
Privately held McKee, the maker of Little Debbie products, Drake's snacks and Sunbelt cereal, already employs about 3,400 workers in Chattanooga and has 6,400 employees across the entire company.
In March, the company announced it was spending $495 million through a series of expansions in Collegedale over the next 15 years. That's the largest dollar expansion in McKee's 92-year history. The additions to the Apison plant, already enlarged three times over its 23-year life, were the biggest part of an initial $225 million investment projected to add 125 jobs over the next seven years, according to McKee.
Work is to take place between Apison Pike and the existing building, a big chunk of which is occupied by parking, Gloekler said.
"A big part of the first phase is relocating parking," he said.
The $495 million investment planned by McKee is the biggest new business expansion in the Chattanooga area since Volkswagen announced plans for an $800 million addition in January 2019. VW plans to build an electric SUV in its expanded factory by 2022.
Mike McKee, president and CEO of McKee Foods, said in a statement he's pleased that the company is bringing more jobs and bakery capacity to its Hamilton County operations.
"Our family business is blessed to have such deep roots in Southeast Tennessee - a region where thoughtful infrastructure investment is being made while maintaining a keen eye on livability and workability for our employees and surrounding communities," he said.
McKee Foods said in the permit application that the expansion site supports a long-term strategic operational plan as it was built to be expanded.
In addition, the location is adjacent to the O.D. McKee Research Center, close to McKee's corporate engineering shop, and in proximity to ingredient mixing operations.
"The final key component of the selected site involves the automated distribution system already in place between Plants 2 and 5," the permit document said. "Products made and packaged at Plant 5 are taken by truck to Plant 2 where an automated conveyor system handles storage and retrieval of products and product lot packing."
To aid the expansions in Collegedale, the state is widening Apison Pike from two lanes to four lanes and will provide job training and fast track grants, officials said. The Tennessee Valley Authority is also aiding the project through its energy incentive programs.
Contact Mike Pare at mpare@timesfreepress.com. Follow him on Twitter @MikePareTFP.