Seguin Gazette: City OKs tax abatement for Minigrip

Valerie Bustamante
valerie.bustamanete@seguingazette.com

(Seguin) - A local manufacturing plant is going to have the opportunity to expand the equipment in its production process.

The Seguin City Council unanimously approved a property tax abatement application submitted by Minigrip, LLC — allowing the plant to expand and modernize the equipment used in its three-part manufacturing process — during a regular meeting at city hall on Tuesday, May 15.

“We’ve been helping Minigrip to adhere a new capital investment into their facility,” Seguin Economic Development Corporation executive director Josh Schneuker said. “This new capital will come in the form of extrusion and conversion equipment that is to be added to their facility.”

Minigrip specializes in zipper bags for medical, industrial packaging and institutional food service markets. According to the Minigroup Brands website, the company was founded in 1959 in Orangeburg, New York, where the first re-closeable plastic zipper bag was created. In 1988, the Minigrip manufacturing plant opened in Seguin as the company headquarters. A second plant opened in the community in 2004 to accommodate growth.

The Seguin plant currently has 14 extruders and plans to purchase four more, which is expected to produce 500,000 pounds of plastic film per month, Schneuker said.

During the process “spools of film with the re-closable zipper already attached” are produced, a city memo said.

For the conversion process, Minigrip uses 18 converting machines — 17 of which require extra maintenance time and expenses because of worn out parts and output rates, Schneuker said.

Minigroup hopes to purchase eight additional converting machines with modern technology to help minimize the costs and increase output, he said.

During this process, the actual bag is produced “from the spools of film into small bundles of bags.” The extruders are expected to cost $2,197,000 while the converting machines add up to $1,673,000, the memo said.

“This equipment will help increase their manufacturing capacity and also gain back production that we’ve been forced to outsource to other facilities in the past year,” Schneuker said. “It’s about a $3.8 million capital investment for new equipment. We’ve been working on this and wanted to make sure we can land the investment to Seguin. Partnering with them on a tax abatement was how we were able to work with them and try to help secure this investment.”

The property tax abatement is expected to span five years at an average value of 50 percent and would only be applicable to the new equipment, which needs to be installed before Dec. 31, 2018.

While no new jobs are being created, the abatement agreement requires Minigrip to retain its current 180 employees, the memo said.

To view the original article from the Seguin Gazette please click here.