Hostess to open plant in Henderson

Jennifer Robison

Monday, Feb. 18, 2002 | 10:38 a.m.

Interstate Brands Corp., the parent company of Hostess Bakery and the nation's largest wholesale baker, will open its first bakery in Nevada by the end of the year.

The company purchased the vacant Levi Strauss building at 501 Conestoga Way in Henderson for $6.3 million, and plans to convert the 251,000-square-foot, 23-acre distribution center to a bakery for the production of Wonder Bread and several other bread lines, said Dean Willmore of brokerage firm GVA Industrial Property Group, who represented Interstate in the deal.

The bakery will employ about 200 workers, said an Interstate spokesman.

Mark Dirkes, senior vice president of marketing for Kansas City, Mo.-based Interstate Brands, said the company is still working out the details of the various bread lines it will produce in Henderson.

He said, however, the company would close a crouton bakery in Montebello, Calif., next year and move its production to the Henderson bakery.

Interstate currently ships Wonder Bread, Weber's Bread, Millbrook Bread and Home Pride Bread into the valley from bakeries in Los Angeles and Salt Lake City.

Dirkes said Interstate would maintain current production levels at those two bakeries.

"This Henderson facility will allow us to (increase) our capacity in the region," Dirkes said. "We're pretty much operating at capacity, so this will give us additional capacity and additional flexibility in California and the Mountain states.

"We're shipping product from Southern California into Las Vegas, and now we'll have an opportunity to do it the other way around. We expect we'll be shipping some of the bread product back, as well as hot dog buns and hamburger rolls, since we're tightest in capacity with (buns and rolls)."

Dirkes couldn't give a firm opening date for the Henderson bakery, but Willmore said he expected the bakery to be "up and running by the end of the year."

Dirkes said the center, which was a distribution building, will require "a lot of work on the inside" to convert it to a bakery, but he was uncertain of the scope and cost of the work involved, and was unable to give a start date for the upgrades.

Perry Muscelli, senior director of brokerage firm Cushman & Wakefield, represented Levi Strauss in the sale.

Muscelli said the conversion of the building from blue jeans distribution center to bread bakery will require "a major investment in dollars -- more than $10 million, maybe close to $20 million."

Levi Strauss left the building in spring 1999 to move into a bigger distribution building nearby in Henderson.

The Conestoga Way property languished on the market until Interstate closed on it on Jan. 31.

Muscelli said the building had few takers because of its sheer size and unusual configuration -- it has a second-floor storage area that would interfere with distributors looking to stack products on racks.

"This is certainly an important deal for us," said Jeff Leake, an economic development officer for the city of Henderson. "That building has been vacant for some time. When a company brings in new equipment, it adds to the tax rolls, and there are payroll impacts, as well as the diversification of bringing in a new industry."

Leake said Interstate Brands has not applied to the state for any economic or tax incentives to locate in Henderson, and Henderson hasn't tendered any similar assistance.

However, as they do for other businesses moving into Henderson, city officials are offering Interstate Brands help in understanding the local business climate and assistance in coordinating development entitlements, Leake said.

Dirkes said the company didn't consider other markets when it began looking for a new bakery last August.

"We were pretty much focused on the Las Vegas area. Las Vegas is a growing market. It's an opportunity for us, and it has proximity to Southern California."

Dirkes declined to disclose the average hourly wage of Interstate's workers, but he said its sales employees and drivers are members of the Teamsters union, and its production workers belong to the Bakers, Confectioners and Tobacco Workers International union.

Muscelli said Interstate would give a much-needed boost to the local economy.

"At a time when the city would like to see some diversification of our employer base, there's nothing better than a manufacturer. (Interstate) operates very technical equipment that takes fairly skilled labor. If it were a big distribution company, the labor skill would be much lower. It's a more technical use for the building, which means it would pay more wages."

Interstate Brands is the nation's largest wholesale baking company, with 34,000 employees, 1,400 bakery thrift stores and 65 bakeries across the United States. In addition to Hostess and Wonder, the company's other brands include Dolly Madison, Drake's and Butternut.

The company, which trades on the New York Stock Exchange under the symbol IBC, posted net income of $61 million in fiscal 2001 on net sales of $3.5 billion.