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Monogram Foods gets stimulus loans
Company to refinance other funds
U.S. Rep. Tom Perriello, D-Albemarle County, stopped Tuesday to talk with Mark Conway of Ridgeway (at right in photo), an employee of Monogram Snack Foods in Henry County, during a loan presentation there.
Wednesday, June 2, 2010
By MICKEY POWELL - Bulletin Staff Writer
Businesses continue to have trouble getting private loans even though the economy is improving, according to 5th District U.S. Rep. Tom Perriello.
While visiting Monogram Snack Foods in Henry County on Tuesday, Perriello announced that the company is receiving a $5.75 million guaranteed loan of stimulus funds through the U.S. Department of Agriculture's Rural Development program.
Amid recent economic troubles, loans are needed by "businesses that make a difference in the community," said Perriello, D-Albemarle County.
Until private lenders are more willing to help businesses, the government must step in to help them when it is able to do so, he indicated.
George Roden, Monogram's vice president of operations, said the company will use the federal loan to refinance other loans it has received "at unfavorable (interest) rates."�
Roden said that will free up working capital that Monogram can invest in its plant in the Patriot Centre industrial park and use to pursue new customers.
New customers mean increased business, and the local plant would need to hire more employees to handle that business, he said.
Roden is optimistic that new customers will be recruited, he added, noting that Monogram now has the capital it needs to buy more equipment for the plant, which also will enable it to take on extra business.
Monogram employs about 250 people locally. Roden said the company plans to expand its local work force as its business grows.
The number of new jobs created will depend on how much new business is achieved, but it is possible that more than 100 new jobs could be created in the coming months, he said.
Most of those jobs probably would pay $8.50 to $12 per hour, but jobs that require a higher degree of skill could pay more, he added.
The federal loan is backed by Tennessee-based Community South Bank. It is "a great example" of how stimulus funds are being used to create and retain jobs, said Ellen Davis, Rural Development's state director.
Monogram, which makes beef jerky products, acquired its local plant from Knauss Snack Food Co. last summer.
Knauss "did a lot of work" at the plant before Monogram took it over "to make it a best-in-class facility," Roden said. That has enabled the plant to "attract the top-tier customers in the country," he said.
Since then, Monogram has invested more than $10 million in the plant and nearly doubled the size of the plant and its work force, officials have said.
Having accomplished that and with plans to expand further, Monogram is a good example of a business that has made a difference locally, Perriello said.
The Patriot Centre factory has "been able to do quite well" despite "tough economic challenges" the community faced in recent years, said Ray Stitle, the company's "chief people officer" - human resources director.
Speaking to Monogram employees, Perriello said that when businesses are able to succeed in a tough economy, he wants to find ways in which he can support them, such as helping them get loans.
Two out of every three new jobs are created by small- to medium-sized businesses, he said, indicating they need to be supported.
He added that finding "one large company to save the day" economically - such as DuPont or Tultex, which once employed thousands but shut down their plants in Henry County and Martinsville - is not going to happen in the modern economy.
The loan announced Tuesday is the second large loan that Monogram has received for the Patriot Centre plant during the past five weeks.
In late April, Gov. Bob McDonnell visited the plant and presented Monogram a check for $2 million. That money represented a loan from the Virginia Small Business Financing Authority to help the company pay for new smokehouses and packaging equipment that will help the plant expand its product lines.