Perfetti van Melle receives $500k tax incentives from Kentucky for facility expansion

By Douglas Yu

- Last updated on GMT

The Kentucky facility is Perfetti van Melle's only manufacturing site in the US.  Photo: Perfetti van Melle
The Kentucky facility is Perfetti van Melle's only manufacturing site in the US. Photo: Perfetti van Melle

Related tags Perfetti van melle Tax

The Mentos maker Perfetti van Melle (PVM) USA will expand its manufacturing plant near Erlanger, Kentucky, with an $11m investment, adding 70 new full-time jobs to the state. 

The announcement came only a week after another major European confectioner Haribo decided to build its first US operation facility in Wisconsin, this site recently reported.

Improving production capacity by 50%

The Northern Kentucky facility, opened in 1984, is PVM North America’s headquarters and is the company’s sole manufacturing arm in the US. It currently employs about 300 people.

The expansion, which is expected to grow the facility’s manufacturing and packaging capacity by nearly 50%, includes facility improvement, purchase of new equipment, and assembly of the production lines, according to PVM.

The company's spokesperson pointed out, "we're not increasing the physical footprint of the plant. We're reconfiguring the space we currently have to allow for new equipment."

Receiving support from state government

The Kentucky Economic Development Finance Authority (KEDFA) in March approved PVM for tax incentives up to $500,000 through the Kentucky Business Investment program, according to a release.

“The performance-based incentive allows a company to keep a portion of its investment over the agreement term through corporate income tax credits and wage assessments by meeting job and investment targets,”​ the state governor’s office said.

But it is unclear at this point how much the tax incentives PVM receives will cost local taxpayers. ConfectioneryNews is waiting for a comment from Kentucky’s committee of economic development.

In addition, PVM will also receive resources from the Kentucky Skills Network, such as no-cost recruitment and job replacement services, reduced-cost customized training and job training incentives, the state governor’s office added.

Launching first Airheads-branded gum

PVM recently confirmed with ConfectioneryNews the first gum product under its Airheads brand will hit the US stores in May this year during the State of the Industry Conference in Miami, Florida.

Airheads is PVM’s non-chocolate chewy candy brand, and it posted total dollar sales of around $114m, an 8.25% increase compared to the previous period, according to IRI data that includes total US multi-outlets with c-stores for the latest 52 weeks ending August 7, 2016.

IRI data also shows that PVM’s sugarless gum sales have grown 19.67% year-over-year, outpacing the growth rate of the US overall sugarless gum category, which declined by 1.27%. 

PVM generated nearly $3bn in sales annually worldwide, and it has experienced double-digit increases in the past four years, the company said.

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