Chapin expanding operations into Kentucky

Mark Gutman/Daily News

Chapin Manufacturing Inc., a longtime Batavia-based manufacturer of compressed sprayers, is planning to expand operations into Kentucky by investing nearly $5.5 million into a new production facility.

The facility is expected to bring up to 100 full-time jobs to Mount Vernon, Kentucky, in the coming years, Kentucky Gov. Andy Beshear said in announcing the project this week.

No jobs will be lost at Chapin’s existing facilities, but some equipment will relocate, Chapin International President and CEO Jim Campbell told The Daily News.

“We needed space. We’re maxed out in Batavia,” said Campbell.

Campbell said Chapin’s business has been growing, even with the COVID-19 virus disrupting other businesses. As an essential business Chapin was able to continue operating during periods when other businesses were closed, he said, and saw an increased demand for its sprayers.

“We build sprayers that can be used for sanitizing. We saw an increase in demand for the sprayers, and are keeping up as best we can,” Campbell said.

There was no room to expand at its 700,000-square-foot facility on Ellicott Street in Batavia, where the company designs, fabricates and produce sprayers, and building a new facility in New York was cost prohibitive for the company.

“Kentucky, overall, has a business environment that is more friendly than New York,” Campbell said.

A location in Kentucky, which is developing into a manufacturing center and logistics hub, will also position Chapin to better serve a strong existing customer base in the Midwest and West coast, which will now be several hundred miles closer.

In Kentucky, Chapin has issued a letter of intent to buy a 175,000-square-foot former Eagle Manufacturing facility in Rockcastle Business Park in Mount Vernon, Rockcastle County, which is about 55 miles south of Lexington, Kentucky.

The plant will produce and distribute metal compressed air sprayers for a variety of uses, including industrial concrete sprayers, professional landscaper/contractor backpack sprayers, ATV sprayers and specialty hose-end and handheld sprayers, according to the governor’s office.

Campbell said the facility will use do custom molding, an area of production that Chapin expanded into after purchasing in 2018 real estate and equipment from Quality Blowing Molding in Ohio. That led to the creation of a new subsidiary, Chapin Custom Moldings Inc., which – in addition to work for its own company – does work for a range of clients such as toy manufacturers, including Little Tikes, outdoor power equipment maker Husquvarna, safety equipment and bigger tanks that cannot be produced in Batavia.

“The expansion is part of an aggressive growth plan,” Campbell said. “We expect, with the plan, to in the next five years double our business.”

The deal for the Kentucky facility came together quickly. The company’s first contact with the Kentucky Cabinet for Economic Development was Sept. 9, when a representative from Chapin’s reached out. A site visit was arranged for Sept. 18 and “we were notified of their intent to locate a the facility a short time later,” Brandon Mattingly, a communications special from the Cabinet, wrote in an email to The Daily News.

Campbell said a lot of people were working on the project and since the building was owned by Rockcastle County, Chapin had to only negotiate with the county.

“There were many moving parts that included purchasing this 175,000-square-foot facility. The town, county and the state of Kentucky did an amazing job in bringing the project to conclusion in just under 10 days,” Campbell said.

Chapin must still close on the real estate transaction, but Campbell said the company expects to begin moving equipment into the facility as soon as next week.

“The warehouse space will be used right away,” he said. “And in the coming months the production lines will be up and running.”

As part of Chapin’s incentive package, the company has committed to creating 100 full-time jobs in the next 10 years. Campbell said the company would likely begin with around 10 jobs for the warehouse operations and begin hiring more employees as production begins. He expects the company to reach and surpass its job commitment faster than 10 years.

Chapin and the state of Kentucky agreed on 10-year incentive agreement under the Kentucky Business Investment program. The agreement has received preliminary approval from the Kentucky Economic Development Finance Authority.

The performance-based agreement can provide up to $1 million in tax incentives based on the company’s investment of $5.494 million and annual targets that include the creation and maintenance of 100 Kentucky-resident, full-time jobs across 10 years; and paying an average hourly wage of $22.40, including benefits across those jobs, according to the governor’s office.

By meetings its annual targets over the agreement term, Chapin can be eligible to keep a portion of the new tax revenue it generates. The company may claim eligible incentives against its income tax liability and/or wage assessments.

Additionally, the Finance Authority approved Chapin for up to $100,000 in tax incentives through the Kentucky Enterprise Initiative Act, which allows approved companies to recoup Kentucky sales and use tax on construction costs, building fixtures, equipment used in research and development and electronic processing.

The Kentucky Business Investment Program and Kentucky Enterprise Initiative Act are two of the state’s most commonly used programs for companies to receive performance-based tax incentives, said Mattingly, of the Kentucky Cabinet for Economic Development.

Chapin also can receive resources from the Kentucky Skills Network, which may include no-cost recruitment and job placement services, reduced-cost customized training and job training incentives.

Chapin International, a subsidiary of Chapin Manufacturing, traces its routes to 1884 when Ralph E. Chapin saw a need for improving containers for kerosene storage while working at a hardware store he operated with his brother-in-law, Frank Harris, in Oakfield. Many of the cans customers brought in to be filled with kerosene were so poorly made that they often leaked. So Chapin began making his own cans and selling them to his customers.

The demand for this product was so great that Chapin soon sold the hardware store and set up a manufacturing business in Batavia. The company quickly expanded and began making 55-gallon storage tanks and pumps. In 1903, Chapin began making compressed air sprayers and hand sprayers.

The company continues to maintain its corporate headquarters in Batavia, which is also where Chapin sprayers are designed, fabricated, formed, assembled, coated, tested, packaged, stored and shipped to customers around the world. Additional facilities are located in Clarence, Erie County; Michigan and Ohio.

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