Paper bag factory ramping up production
An Irish packaging manufacturer is slowly ramping up production at its Newark-area factory after opening last August.
AB Group Packaging, which makes paper bags, to-go packaging for restaurants, industrial bags and other packaging materials, has four production lines running in an industrial park at 1800 Ogletown Road, next to Lowe’s Home Improvement. That capacity will double by this summer, CEO Dermot Brady said last week during a ceremony celebrating the plant’s opening.
The factory will have the capability to produce a quartermillion bags a day, but Brady declined to say what its current output is.
“It’s not really huge at the moment. This is a long-term game,” Brady said. “Our ramp-up and growth is steady and consistent.”
The Newark plant is the first North American factory for AB Group, which also has locations in Ireland, Spain and the United Kingdom. The company has a global workforce of approximately 350.
AB Group’s interest in the U.S. market peaked last year when one of its largest customers, Primark, began expanding to America. The Irish fashion giant opened a store in King of Prussia, Pa., in late 2015 and has plans for eight more in the U.S. by the end of this year.
Brady said he looked at other states but quickly settled on Delaware.
“We were totally bowled over by the can-do attitude, fast decision making and terrific colleges and technical centers,” he said.
To sweeten the deal, the Delaware Economic Development Office offered nearly $375,000 in incentives. If the company hires 87 full-time employees by the end of 2017, it will receive a $253,365 Strategic Fund Performance Grant. It is also eligible for a $120,000 Capital Expenditure grant if it spends at least $4 million on capital expenditures.
“When banks see an influx of funds from the state, that starts to give everybody confidence,” Brady said. “We may have come here before, but we might have just had one machine here today. Where as, this summer, we’ll have eight machines.”
The 120,000-square-foot Newark factory only has 25 employees right now, but Brady expects to meet the goal of 87 workers prior to the state’s deadline.
“We would love to have like 200 here tomorrow, but it takes time to train people,” he said, noting that running the bag-making machinery requires specific mechanical skills.
The company has partnered with Delaware Technical and Community College to help train future workers, Brady added.
Both Brady and Gov. Jack Markell said the above-and-beyond actions of DEDO official Patty Cannon helped solidify AB’s decision to choose Delaware. Brady had toured the state with DEDO representatives and realized later that night he had left his laptop in a rented van. Cannon drove three hours in the middle of the night to deliver the laptop to Brady in another state.
“It’s so indicative of the economic development effort that we try to provide,” Markell said. “That kind of attitude is critical in a competitive world, and it’s what we aspire to every day.”
Anne Anderson, the Irish ambassador to the United States, traveled to Newark to attend AB Group’s grand opening on April 15.
“They’re known in Ireland as a very smart and innovative company,” Anderson said. “I think there will be a lot of potential for growth here.”
She noted that many American companies choose Ire- land when looking to expand to Europe and said she is pleased that more Irish companies are adding locations in the United States.
“The best relationships are two-way ones,” Anderson said. “We’re big beneficiaries of American investment in Ireland, and it’s very good to see the growth in the other direction as well.”
Brady said the factory operates as a “zero-waste” facility, meaning that all raw materials that come in are either used in products or recycled.
Dermot Brady (right), CEO of AB Group Packaging, gives a tour of his Newark factory to Gov. Jack Markell and Irish ambassador Anne Anderson.
Gov. Jack Markell speaks at a ceremony celebrating AB Group Packaging’s Newark factory.