Lipton announces $96-million expansion

Published 1:47 pm Monday, March 11, 2013

Gov. Bob McDonnell presents Bill Kelly, supply leader for Lipton, with a share of stock in the historical Virginia Company, which McDonnell acknowledged is “completely worthless.”

Gov. Bob McDonnell presents Bill Kelly, supply leader for Lipton, with a share of stock in the historical Virginia Company, which McDonnell acknowledged is “completely worthless.”

The Lipton tea processing plant on West Washington Street will stay in Suffolk and invest more than $96 million in the operation, officials announced Monday.

The company was considering leaving Suffolk, officials readily acknowledged. Sites in Kentucky, North Carolina and South Carolina were competing to get the plant if it moved.

But the company was convinced to stay in Suffolk because of ready access to the port, 300 loyal employees and a promising labor pool, said Bill Kelly, supply leader for the Suffolk site.

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“There were a lot of compelling reasons to stay here in Suffolk,” he said.

The reinvestment, which will include upgrading the building and replacing aged equipment, coincides with a “re-launch” of the Lipton brand and a new product that, like all Lipton teabags, will be packaged in Suffolk.

Gov. Bob McDonnell, who came to Suffolk to announce the project, lauded the company’s decision to keep the United States’ largest tea-processing facility in Suffolk.

“Over the last few years, I think it’s fair to say we have focused on job creation and economic development,” McDonnell said. “This is yet another sign of the confidence businesses have in Suffolk and in Virginia.”

McDonnell approved a $1 million grant to be given to Lipton from the Virginia Investment Partnership program, and the city also gave the company an unspecified amount. City Economic Development Director Kevin Hughes did not know how much the company received, and city spokeswoman Diana Klink was unable to provide the information before the end of the day.

Mayor Linda T. Johnson said Monday she and other city officials traveled to New Jersey last year to sell the city to top officials of Unilever, the parent company of Lipton.

“It was such a successful time we spent together,” she said, adding she knew the company would “have to do a lot of due diligence to decide where to invest $96 million.”

“We thank them so much,” Johnson said. “We’re here to pledge our support.”

The first new equipment will be installed this summer, Kelly said. It will package a new, strong flavor of tea that is intended as a morning time blend, he added.

No new jobs will be created immediately as part of the investment, Kelly added. However, it is possible that future growth in the company because of the new product and marketing initiatives could lead to new employees, Kelly said.

Most of the new equipment installed will replace older equipment that has been there almost since the plant opened and is “well beyond its useful life,” he said.

Officials and guests toasted the deal with glasses of iced tea embellished with lemon slices and strawberries during Monday’s event. Lipton also unveiled a new commercial geared toward younger people, encouraging consumers to “drink positive.”

A number of gifts were traded among dignitaries during the event. McDonnell presented Lipton officials with a share of the Virginia Company, a British moneymaking venture during America’s colonial days. McDonnell acknowledged the stock is “completely worthless,” except as a token of his appreciation for investing in Virginia.

In addition, Lipton presented McDonnell and Johnson with tea chests filled with Lipton products, and Johnson presented Lipton with an engraved tea set.