Kimball Hospitality planning $4.4 million update to Jasper facility

Kimball Hospitality officials are hoping that an overhaul of its Jasper manufacturing facility will prepare it for the present demand from its customers as well as future changes in the hospitality furniture market.

The Jasper-based company revealed its plans during a special Jasper Economic Development Commission meeting Monday morning. The meeting was requested to consider Kimball Hospitality’s application for tax abatement on the estimated $4.4 million investment the company plans on making into its 16th Street facility under the project titled Kimball Hospitality 16th Street Realignment Project.

In response to the company’s application, the economic development commission recommended a six-year property tax abatement on the renovations at the facility as well as the real property the company will be purchasing. According to John Kaufman, vice president of global operations, roughly $3.75 million will go into the new manufacturing equipment designed to streamline production whereas the rest will go into renovations and manufacturing processes.

In addition to new equipment that is more easily retooled for manufacturing, the company plans on updating the way parts travel throughout the manufacturing process. Currently, parts are handled as batches and moved from station to station manually as they are completed. Under the new configuration, operators will simply concentrate on the manufacturing process and the parts will automatically flow through the facility.

Kaufman told the commission that the company which manufactures much of their product line in Asia is being driven to bring their manufacturing to North American. He explained this is due to the shorter lead times that customers are requesting as well as their demand to have more products produced domestically.

Although the company would prefer to expand in Jasper, Kaufman told the commission they were also considering a move to Mexico.

“We want to be in a position where we have a manufacturing footprint that we can react to whatever is coming our way,” he explained.

Low unemployment in the county and high turnover at the company are also driving the changes to a more automated and technical process. “Our turnover rate is very high and finding skilled labor is extremely difficult,” Kaufman said. “This has been a challenge for us over the past couple years and is one of the factors that drove us to a project that is highly technical and highly automated so we can improve our productivity.”

In the project proposal submitted to the commission, the changes will lower the company’s employee count from 220 to 210. However, with the more adaptive technology and better customer experience, Kimball Hospitality hopes it will continue to grow in the market which could lead to more local jobs down the road.

Once completed, the new manufacturing processes will likely create higher skilled positions with better pay.

“For us to maintain and grow our market share, we have to have a global footprint,” Kaufman said. “We have operations in Asia, but we need to have a domestic footprint. We have it right now with 16th Street, but it is not in a position to see us into the future which is what drove this discussion about the investment.”

Under the tax abatement scoring system, the economic development commission recommended a six-year tax abatement. The first three years will be 100 percent abated, 75 percent in year four, 50 percent in year five and 25 percent in year six.

During a special meeting Tuesday morning, the Jasper Common Council approved the tax abatement request as recommended by the economic development commission.

When questioned by Councilman John Bell about the impetus on moving forward with the abatement that required two special meetings, Kaufman said a machinery supplier has pushed for the purchase order or will sell the equipment to a Chinese manufacturer. He explained the loss would slow the company’s plans down by six months as they wait for the machinery supplier to build the equipment for them.

Kimball Hospitality offers product and service packages for the hospitality furniture industry.