DHL Supply Chain Partners with Graphic Packaging to Build One of the Largest Plants of its Kind. 

 

DHL Supply Chain (DHL) is a global leader in warehousing and distribution services serving a wide range of industries including automotive, consumer, retail, engineering and manufacturing.  They offer a comprehensive suite of services from initial consultancy and design, to final mile delivery and reverse logistics.  DHL expressed an interest in providing warehousing distribution services to Graphic Packaging.

Graphic Packaging International, Inc., one of the world’s largest manufacturers of folding cartons, unbleached paperboard and coated recycled board has operated a paperboard mill and carton plants in Ouachita Parish for decades.  In an effort to increase their current capacity, improve quality and product performance and reduce their environmental impact, Graphic Packaging desired to upgrade and modernize certain assets at its paperboard mill and to consolidate and modernize its carton plants.

NLEP Assists DHL with Site Selection

In November 2015, NLEP was contacted by a site selector representing DHL to identify approximately 30-35 acres of rail served industrial property in the Monroe, LA area for a distribution/manufacturing project. The project entailed the construction of a distribution warehouse and a separate manufacturing facility for a manufacturing client partner whose identity would not be disclosed until some later date. NLEP responded with eight (8) sites in Ouachita Parish and four (4) in surrounding parishes, including Millhaven Industrial Park and a site at the Monroe Regional Airport.  Over the course of the next several months, additional properties were submitted and evaluated by the site selector.  (Of particular interest, initially, was Millhaven Industrial Park, a Louisiana certified site in Ouachita Parish.  It was ascertained from the owners, however, that the site had been taken off the market for undisclosed reasons.  NLEP continued to facilitate the site search by providing information on additional sites.)
 
After an exhaustive search, the site selector focused on the Monroe Regional Airport site.  When it was discovered that the site was being considered for a solar farm lease, NLEP approached the City of Monroe to carve out approximately 75 acres to accommodate the expanded DHL distribution/manufacturing project. NLEP worked with the Monroe City attorney to reach an agreement with the solar farm prospect, which would allow both projects to locate at the airport.  The Monroe City Council approved a resolution authorizing the Mayor to enter into an extended term lease with DHL, who immediately began various site due diligence at the airport.
 
Around this time, the identity of DHL’s manufacturing partner became public.  Graphic Packaging revealed that it was their intention to partner with DHL, who would build and operate a distribution warehouse along with a carton converting facility which would consolidate the operations of the two carton facilities currently operating in West Monroe.   
 
Simultaneous with the DHL site search, NLEP was asked to assist with the identification of local incentives that might be available to assist both DHL and Graphic Packaging, who propose a combined investment of $274 million in Ouachita Parish.  DHL requested assistance with public infrastructure improvements necessary to support the nearly 1.3 million combined sq. ft. of distribution and manufacturing space to be built.  Graphic Packaging requested assistance with its investment in modernizing the paper machines and updating the wood yard at the existing mill and with the machinery in the new carton converting facility.  
 
To ascertain if there was support for the incentive requests, NLEP along with DHL and Graphic Packaging representatives, began meeting with the Police Jury, the school board, the sheriff’s office, and other local stakeholders.  With the assistance of Police Juror Jack Clampit, they were able to obtain an agreement to participate in a Payment in Lieu of Taxes (PILOT) agreement with each company.
 
To execute the PILOT agreements, the Ouachita Industrial Development Board (IDB) needed to be reactivated.  New members had to be appointed to the Board and familiarized with the IDB’s mission and authority.  NLEP arranged to have David Wolf, an attorney with Adams & Reese, meet with the Board and other stakeholders to discuss the use of PILOT agreements.  Mr. Wolf, along with the Board’s long-time attorney Charles Hamaker, were able to draft PILOT agreements that were agreeable to both of the companies and the local taxing bodies.
 
Andy Johnson, Vice President, Government Affairs & Sustainability for Graphic Packaging, took part in all the discussions with governmental bodies and the IDB about local incentives. 
 
“North Louisiana Economic Partnership’s leadership was instrumental in helping Graphic Packaging and community leaders develop a “win-win” program and ensured that Graphic Packaging will continue to be a member of the Ouachita Parish community,” said Johnson.
 
While conducting the due diligence site work at the Monroe Regional Airport site, DHL discovered that the soil composition would require remediation that was both costly and time consuming.  This discovery led DHL to reconsider sites it had previously evaluated.  Parish attorney, Kevin Crosby of Lazenby & Associates, who also works with the owners of the Millhaven Industrial Park site, brought to the company’s attention that a portion of the Millhaven site was now available.  DHL was connected with the property owners who were able to negotiate a suitable price per acre.  After extensive investigation into both sites, DHL selected the Millhaven Industrial Park site for construction of the distribution and manufacturing warehouses.    
 
DHL’s proposed investment in Ouachita Parish includes the construction of a 790,000 sq. ft. distribution warehouse and an adjacent 460,000 sq. ft. manufacturing facility which will be leased to Graphic Packaging for its carton converting operations.  In addition to the local incentives via the PILOT agreement, which will be realized over a ten-year period, DHL will also receive the benefit of Louisiana’s Enterprise Zone program which includes tax credits for new jobs and a sale tax rebate on capital assets.
 
A portion of Graphic Packaging’s capital investment in Ouachita Parish includes the modernization of the existing West Monroe paperboard mill and will occur between 2017 and 2020. Their investment will support a ten percent capacity increase at the mill, improve quality, performance properties and appearance of the paperboard, and reduce the mill’s environmental impact. The remaining investment will be in machinery for the new carton plant.  The new carton plant will allow for a ten percent increase in its capacity, allow for future growth, and allow Graphic Packaging to repatriate carton manufacturing that was previously moved to facilities outside of Louisiana. In addition to the benefits of the PILOT agreement, Graphic Packaging will also utilize the Louisiana Retention and Modernization tax credit and receive the comprehensive workforce solutions of LED FastStart® – the nation’s No. 1-ranked state workforce development program.
 
Chris McGrath, Senior Director, Real Estate Solutions for DHL Supply Chain worked closely with NLEP and Graphic Packaging to bring the projects to fruition.
 
“NLEP’s hard work and coordination helped make this project a reality!” said McGrath. “Most people do not see all of the behind the scenes effort required to orchestrate major projects. To that point, NLEP's involvement in this project started in November 2015. Without the local knowledge and expertise exhibited by NLEP, this project may not have been possible. Thank you NLEP for a job well done!”

About North Louisiana Economic Partnership

 
North Louisiana Economic Partnership, an Accredited Economic Development Organization, provides professional economic development services to the 14 parish region of North Louisiana, including lead generation and prospect management. The organization also represents the interests of North Louisiana with a unified voice and as a single point of contact. It acts as a catalyst, a convener, and a connector in the region to ensure that North Louisiana’s economic development potential is realized. Its vision is for North Louisiana to be a thriving region-a destination for high quality talent, innovative companies, and global investment.