More Twinkies means more jobs, development for Emporia

07/08/2014 10:34 AM

07/08/2014 10:36 AM

Emporia could have bragging rights as the Twinkie capital of the world.

Its Hostess Brands plant, reopened last year and expanded this year, has added $30 million worth of improvements, including a $25 million bakery line to churn out more snack cakes.

On Friday, a 9:30 a.m. ribbon cutting will celebrate construction of a new 36,000-square-foot warehouse. On Saturday, the city’s Flinthills Mall will have a Twinkie festival, where from 10 a.m. to 1 p.m. there will be Twinkie-themed costume, recipe, song and eating contests.

Emporia officials are relishing the city’s status as home to the company’s flagship snack cake bakery, which also turns out Hostess Cup Cakes, Donettes, Coffee Cakes and a new product, Greek Yogurt Cakes.

“It’s beneficial to us and to Hostess, too,” said Rob Gilligan, a city commissioner and chairman of the Emporia Regional Development Association of East Central Kansas. “We’re glad they recognize the productivity of our people.”

When the new bakery line is fully operational, it will produce 1.6 million Twinkies a day and is expected to be the top Twinkie producer in the Hostess network.

It’s a bittersweet success, in that about 500 jobs were lost when the plant shut down in 2012 following a wage battle between Hostess Brands Inc. and the Bakery, Confectionery, Tobacco Workers & Grain Millers International Union. The disputes contributed to the demise of the former Hostess company, which was attempting a second bankruptcy reorganization.

The Emporia plant was one of four Hostess bakeries reopened last year after an investor partnership of Metropoulos & Co. and Apollo Global Management LLC paid about $410 million for the bakeries and some other Hostess assets.

With the purchase came rights to make Twinkies, Ding Dongs, Ho Hos, Donettes, Zingers, Suzy Qs, Mini Muffins and the original Hostess Cup Cakes.

The reopened Emporia plant, now non-union, employs 330, and about 50 more jobs are expected. Hiring is underway for bakery and warehouse jobs, a Hostess spokeswoman said.

City officials said some of the current employees were former union members who were rehired.

“These are good jobs with benefits packages that are very competitive,” said Emporia Mayor Jon Geitz. “Once the employees get past their trial period they have full-time jobs with 401(k)s and health care. Hostess is a top employer in our city.”

Hostess received a tax abatement on the addition to the plant. Also, there is no property tax in Kansas on manufacturing equipment, so the company considers that a “substantial benefit,” the company spokeswoman said.

The reborn Hostess Brands LLC, which again has corporate offices in Kansas City, has previously said the company baked 500 million Twinkies a year. What output occurs in Emporia isn’t made public.

The Metropoulos and Apollo investors acquired 11 former Hostess snack cake facilities in all but expected to invest in fewer than half of them. The Emporia improvements are part of that investment.

The three other snack cake bakeries acquired in the bankruptcy deal were in Columbus, Ga., Schiller Park, Ill., and Indianapolis.

Bloomberg News reported in May that the Apollo group – led by billionaire Leon Black, who aided the turnaround of Chef Boyardee and Bumble Bee Tuna – planned to take a $175 million payout from Hostess Brands.

Standard & Poor’s said Hostess’s credit rating of B- was unchanged, and it was left with $40 million in cash and $60 million in available credit. Hostess had a “highly leveraged” financial risk profile, but S&P said its rebirth consumed less cash than forecast and its earnings before interest, depreciation and amortization exceeded estimates.

Hostess Brands was founded as Interstate Bakeries Corp. and was based in Kansas City until 2009. The revamped headquarters on Armour Boulevard had about 75 employees as of last year.

While the Midwest region has led the snack cake resurgence, other regional bread-making facilities of the former Hostess company have not reopened. In the bankruptcy sales, 20 of the former company’s bread and bun-making plants were purchased by a different buyer, Flowers Foods Inc.

Flowers, a publicly owned company based in Thomasville, Ga., has been silent about its intent regarding its plants.

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