October 22, 2020

Pee Dee factory trading sailboats for swimming pools as part of new business deal | Business

A longstanding factory in Marion County is trading out luxury sailboats for fiberglass swimming pools as part of a business deal that could save much-needed jobs in the small Pee Dee community. 

Groupe Beneteau, a well-known international boat builder, notified state and local officials in early July it planned to permanently close its only factory in South Carolina and lay off 180 workers. 

The loss of that factory, located just outside the city of Marion, was a huge concern for the employees, local governments and other businesses that historically relied on the income and tax revenue generated by Beneteau’s operations. 

The company, which is based in France, said the closure was tied to the coronavirus pandemic, which temporarily shuttered some the boat business’ manufacturing plants and led to a deep decline in sales worldwide.

The company notified the S.C. Department of Employment and Workforce it planned to lay off factory employees on Sept. 16.

But before that date, a new company announced it is stepping in to take over the 225,000-square-foot plant, which has served as an economic backbone for the region for more than three decades. 

Leisure Pools Group, one of the world’s largest manufacturers of composite fiberglass swimming pools, announced its purchase of Beneteau’s factory on Sept. 10. 

Demand for Beneteau’s sailboats may have dropped off amid the global health crisis, but those challenges are apparently not being felt by Leisure Pools, a private company based in Australia. Neither company responded to phone calls seeking comment. 

But in a statement, the executives with Leisure Pools said the addition of the Marion County factory was needed to keep up with the demand for in-ground pools built from fiberglass. 

It’s unclear how much Leisure Pools is set to pay for the factory, located along U.S. Highway 76, but the company suggested the infrastructure at the facility and the skill sets of Beneteau’s workforce will help speed the transition. 

Julie Norman, executive director of the Marion County Economic Development Commission, said Leisure Pools’ interest in the factory was like the sun coming out over the horizon. The pace at which the deal materialized, she said, was unlike anything she’s seen during her 22 years in economic development. 

“This doesn’t happen very often,” said Norman. “I’ve been in this business for a long time, and I don’t think I’ve ever seen a plant closure turn into a new announcement in a couple months. That’s rare.”

“It has just fallen into place beautifully,” she added. “I wish all projects were like this.”

The county was on the receiving end of an additional economic boost last week, when bedroom furniture manufacturer and distributor Maxwood Furniture announced it was investing $5.8 million and adding 30 jobs to expand it existing operations by the end of next year.

‘A flagship institution’

Even so, Beneteau will be missed.

The company started production at its South Carolina site in 1986 and has operated as Marion County’s second-largest employer. State Sen. Kent Williams, a Democrat who has represented the area for 15 years, referred to Beneteau as a “flagship institution” in the region. 

When Williams learned of the factory’s pending closure in July, he was a little surprised. The plant, he said, made it through several economic downturns in its three-decade history, when financial pressures forced other businesses to fold. 

“I’ve been amazed by Beneteau and the factory’s survivability over the years,” Williams said. “But the economic consequence of this global pandemic has really impacted their business.”

Williams added, “People don’t create businesses to employ people; they create businesses to make money. If you are not making a profit, at some point, they are going to make the tough decision and pull the plug.” 

That’s exactly what happened in early July, according to news releases from the company. 

Beneteau said it suffered a 43 percent drop in income from its boat division earlier this year, and the company expected the ongoing contraction in the market to rival the downturn that was experienced during the Great Recession. 

As a result, the company announced it would close, sell, shut down or scale back operations at seven factories in the U.S. and Europe. According to a statement from the company, the employment cuts are necessary to “simplify” the organization and trim its operating costs. 

The biggest hit, however, was delivered to Marion County. The layoffs in South Carolina accounted for more than half of the 300 jobs Beneteau said it needed to eliminate worldwide. 

Williams understands the economic realities facing Beneteau and why it chose to close up shop in South Carolina. But that didn’t make it any easier. 

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Local officials, like Williams, were deeply concerned earlier this month as Beneteau prepared to start laying off its workforce amid a national recession and one of the worst unemployment crises in state history. 

But all of that changed almost overnight. 

Accessing talent

Leisure Pools’ takeover of the factory turned around the economic prospects for the county and many of the factory’s employees. 

The manufacturer, which was founded in Australia 20 years ago and expanded to the U.S. in 2003, said it planned to hire 70 of Beneteau’s workers immediately and would ramp up employment in South Carolina to roughly 200 within the next five years. 

Norman, the county’s economic development director, said she expects most of that employment growth to occur within the first couple of years. But that could leave some of Beneteau’s current employees on the sidelines for now. 

Leisure Pools said it is looking forward to utilizing the experience and skills that Beneteau’s employees learned from producing hundreds of sailboats each year. 

Many of the workers who were set to be terminated by Beneteau have experience in management, accounting, logistics, quality control and industrial maintenance. Others have specialized skills in woodworking, installing hardware and applying fiberglass, which is extremely relevant to Leisure Pools manufacturing techniques. 

“We are most excited about the opportunity to access the talents of many of the current Marion team members,” David Pain, CEO of Leisure Pools, said in a written statement. “Their composite fiberglass experience, when supported by their strong pride of work, is a priceless combination that will serve us, our global dealer network and the thousands of excited families each year that purchase one of our composite fiberglass swimming pools.”

Those skilled laborers, the company said, are needed to meet the growing market demand for fiberglass pools in North America. And Leisure Pools doesn’t plan to waste any time putting them to work. 

‘A perfect match’

Leisure Pools’ executives plan to start transferring equipment and converting the plant this month, and they expect the first batch of fiberglass pools to roll off the factory floor sometime in October. 

That transition is likely to be helped by the factory’s existing layout and infrastructure. 

David Hay, Leisure Pools’ chief operating officer, said Beneteau’s plant matches up well with the needs of his company, just like Beneteau’s workforce. 

“The Marion manufacturing facility is practically built for us with its large, open manufacturing production area, extensive use of overhead cranes, resin storage tanks, and a ventilation system that marries up nicely with our production techniques,” Hay said. 

Jeff McCay, executive director for the Northeast Strategic Alliance, another economic development group that covers Marion County, said the Beneteau factory makes perfect sense for Leisure Pools. 

“The Beneteau facility is a good facility,” McCay said. “In our business, timing is everything, and it seems to be a perfect match.”

It isn’t the first time that Leisure Pools will be retrofitting a plant that was previously building boats. The company said it did the same thing at its factory in Knoxville, Tenn., where its North American headquarters is located.

Altogether, Leisure Pools said it plans to invest $6.1 million at the Marion County facility. Some of those costs, however, could be offset through state tax credits. 

South Carolina’s Coordinating Council for Economic Development, which is led by state Commerce Secretary Bobby Hitt, recently approved the company for what is known as job development credits. 

Those credits require companies to maintain a set number of jobs and invest a promised amount of money. In return, they can keep part of their employees’ withholding taxes for a set number of years. 

Alex Clark, a spokeswoman for the Department of Commerce, confirmed that Leisure Pools was offered the credits, but declined to disclose the details of that proposed tax deal. 

Once the retrofits are complete, the company said the plant will become the second-largest fiberglass pool manufacturing site in the world. The only factory that will top it is Leisure Pools’ plant in Knoxville.

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