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Southern Finishing to create 67 jobs here
Firm consolidating locally
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Southern Finishing Co. President Ed Brown discusses Tuesday’s announcement that his company will consolidate its eastern facilities in Martinsville. At left is Mary Rae Carter, deputy secretary for rural economic development for Gov. Bob McDonnell. (Bulletin photos by Mike Wray)
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Wednesday, December 1, 2010

By MICKEY POWELL - Bulletin Staff Writer

Southern Finishing Co. Inc. will create 67 local jobs as it consolidates its East Coast operations in Martinsville, local and state officials announced Tuesday.

The company aims to invest $1.7 million in the consolidation. It will receive $515,000 in economic incentive funds toward the project, which will include the acquisition of a vacant furniture factory.

During the announcement, company President and Chief Executive Officer Ed Brown noted that Southern's business is improving as the economy improves. He predicted that business will improve more next year.

For that reason, "we hope to bring a lot more jobs ... (to the city) in the next couple of years," Brown said.

A privately owned company, Southern makes prefinished wood components for the furniture industry, mostly kitchen cabinet makers. The company has facilities in Martinsville and Stoneville, N.C., as well as Kingman, Ariz.

The North Carolina and Arizona operations will stay open. However, "I'm sure some" jobs will be eliminated in Stoneville, Brown said.

He did not know exactly how many jobs will be lost. He indicated that some Stoneville employees may be offered jobs in Martinsville.

The consolidation in Martinsville is expected to save 137 existing jobs in the company, which has more than 240 employees, Brown said.

As part of the consolidation, Southern will take over part of the former Hooker Furniture Corp. factory off Commonwealth Boulevard, across from its current location. Hooker closed the factory in March 2007.

The acquisition will mean "the rebirth of a property," said Mark Heath, president and chief executive officer of the Martinsville-Henry County Economic Development Corp. (EDC).

Southern will receive $380,000 from the Virginia Tobacco Indemnification and Community Revitalization Commission as well as $135,000 from the Governor's Opportunity Fund to use toward the acquisition.

Martinsville City Council on Tuesday met in closed session, before state and EDC officials' announcement, to discuss an economic development matter as permitted under state law. Afterward, the council unanimously approved two performance agreements related to Southern's acceptance of state funds.

The city acted as an agent for receipt of the funds.

Under the agreements, Southern will have to pay back part or all of the state funds if it does not meet employment or investment commitments in certain periods of time of up to approximately three years.

Also, Southern is eligible to receive state enterprise zone benefits as well as assistance in employee recruitment and training provided by the Virginia Department of Business Assistance, according to state officials.

"The retention and expansion of Southern Finishing ... is significant," state Secretary of Commerce and Trade Jim Cheng said in a release. He said the company can "benefit from the region's history of success in the furniture sector, and I am confident in the trained labor pool available" to fill jobs.

Brown said the new jobs will pay an average of $26,000 per year. He said anyone interested should contact the Virginia Employment Commission.

State Deputy Secretary of Commerce and Trade for Rural Economic Development Mary Rae Carter, a Henry County native, represented the state at Tuesday's announcement. She said the new jobs should help lower Martinsville's current unemployment rate of 18.6 percent. The city has had Virginia's highest jobless rate for months.

Southern's decision to consolidate in Martinsville was largely due to the area having the right type of building and workers having skills the company needs, according to Carter.

Brown said the company could not find the type of building it needed in North Carolina.

With consolidation, Southern will not have to run trucks between Stoneville and Martinsville as often, said Brown, adding that such runs often are being made three or four times per day.

Fewer runs will save the company "a significant amount of money," he said, although he has not yet figured out how much.

Martinsville Mayor Kim Adkins said Southern's consolidation in Martinsville is "a great example" of the private sector striving to create jobs locally.

Heath said the consolidation was the EDC's seventh economic development announcement this year. He mentioned that those projects have resulted in 605 new jobs and $14.1 million in investment for the community.


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