Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, January 20, 1995 TAG: 9501200089
SECTION: BUSINESS PAGE: A-7 EDITION: METRO
SOURCE: KIMBERLY N. MARTIN STAFF WRITER
DATELINE: LENGTH: Medium
Although the Hauppauge, N.Y.-based Arkay started in 1922 as a printing company with clients like AT&T, the company's co-owner, Mitchell Kaneff, described it as "the Rolls Royce" of the cosmetics packaging industry.
About 10 percent of the company's $32 million annual sales are with Elizabeth Arden Co., which manufacturers cosmetics in Roanoke.
Arkay makes the boxes in which cosmetics are packaged. Its customers also include Avon and Estee Lauder.
The company said Thursday it will build a 30,000-square-foot plant that would create about 40 jobs in its $7 million first phase. And in about two years, Kaneff said, he hopes to invest another $10 million in the Botetourt plant by expanding the plant to 140,000 square feet and its work force to about 175. Workers will earn from $7 to $15 an hour, he said.
Kaneff said he's been considering expansion for some time. The company has a sales office in California.
Virginia caught his eye in 1989.
Arkay was ready to expand into the Southern market then and bought 15 acres in Botetourt's Jack C. Smith Industrial Park. A declining economy caused the company to postpone its plans.
"We'd just invested $12 million in our New York plant. The last thing you do is spend another $4 million on a plant when you're facing losses. ... I'm glad to be standing here having made money for the last four years," Kaneff said.
Since then, Hanover Direct Inc. bought that parcel for its expansion, a warehouse and distribution center due to open next month.
Kaneff looked elsewhere. He scouted areas marked for industrial development in North Carolina, South Carolina, Florida and Mexico before being lured back to Virginia.
Other states "didn't show that they were as interested in getting us there. Gov. Allen showed us that he wanted us here," Kaneff said.
That desire was evidenced in the form of a $122,000 Governor's Opportunity Fund grant to Arkay to offset land costs and pay to train workers.
Southwest Virginia's location helped, he said. It is just eight hours from New Jersey, and near Ohio, Atlanta and Carolina printers. And its right-to-work status - although some of the company's New York workers are unionized - made it a plum place to expand, Kaneff said.
Botetourt's comparatively low taxes were an added bonus, Botetourt Board of Supervisors Chairman Robert Layman said. He said Botetourt's real estate taxes are the lowest in the valley, and the board lowered the county's machinery and tools' taxes just last month. That package attracted Connex Pipe Systems in 1993, with an estimated 190 jobs.
Arkay settled on the 9.6 acres in EastPark, where it will be the first tenant in the expanded park, Layman said. The city invested about $500,000 into making the area attractive to industry like Arkay.
Ground will be broken on the plant this fall. The company did not say when it will begin operation.
Kaneff called the operation "environmentally friendly," adding that it will recycle all of the paper and foil that it uses and will print with water-based, nontoxic inks.
Kaneff hopes this move will help the company to double its sales in the upcoming years and move into the liquor and food labeling business.
by CNB