Business expansion a good sign for Merced

Investments in Merced’s economy through expansion, marketing and new construction continue to improve the business climate in town, according to city leaders.

For example, Scholle Packaging Corp. recently celebrated finishing the first of four phases of expansion of its Merced plant. John Villareal, the plant manager, said the company is putting “a few million dollars” into the expansion.

“This is a fairly large investment for this company,” he said.

The company manufactures the packaging that preserves food inside a box, like the bags inside of boxed wine or boxed pasta sauce. The first phase changed about 100,000 square feet of storage into a manufacturing floor, he said, which will expand the production of boxed wine bags.

He estimated the expansion will improve efficiency 20 percent, which will help the company meet increasing demand.

The Merced plant, which is the largest of the corporation’s 12 sites, also added enough solar panels over its employee parking lot to generate 150,000 kilowatt-hours a year. The solar panels and a recycling effort could help the company reach goals to improve sustainability, Villareal said.

Food processing and related industries, like that at Scholle, have a large presence in Merced. They go hand in hand with the agriculturally driven economy.

About 9,900 nonfarm employees work in manufacturing in Merced County, according to the most recent numbers from the Employment Development Department. That’s 16 percent of the employed.

Scholle is not alone in adding jobs to the county as the jobless rate is at 10.4 percent, the lowest it’s been in seven years. However, the rate remains above the state’s 6.9 percent average and the nation’s 5.7 percent.

Heading into the new year, the loss of farm labor is expected to push the jobless rate back up. A few new retail stores will put a small dent in the rate when they open up late this year or early next year.

Frank Quintero, director of economic development for Merced, said national retailers are also setting up shop in town. Merced strip malls and downtown locations that have been empty are also beginning to fill up with small businesses.

“The economy is turning around, and we’re seeing the first tier of businesses opening up,” he said.

The city of Merced this month also approved a marketing agreement with Merced County and the other cities in the county. Quintero said it establishes a protocol for leads on new businesses, as well as sets guidelines on how the separate governing bodies can market the region as a whole.

“We’re going to get broader exposure,” he said.

New construction on a few new retailers in Merced is also nearing completion, what Quintero pointed to as an improvement in interest from national corporations.

The Family Dollar outlet at 1715 Yosemite Parkway is set to open for business Dec. 4, according to Bryn Winburn, media relations manager for the North Carolina-based corporation. The other site going up at 398 W. 16th St. will likely open after the beginning of the new year, she said, though an official date is not set.

Each store will employ eight to 10 people, she said, and job seekers can apply online at www.familydollar.com. She said the company aims to employ people who live in the area.

Retail jobs make up a considerable portion of the employment market in Merced County.

About 12 percent of the people working at a nonfarm job in the county are employed in the retail industry. The retail sector provides about 7,300 nonfarm jobs in the county, according to the most recent numbers from the EDD.

This story was originally published November 12, 2014 at 7:53 PM with the headline "Business expansion a good sign for Merced."