One of the best parts of my job as Associate Administrator for International Trade at the U. S. Small Business Administration SBA is hearing real life stories of our programs making a positive difference for businesses and communities. I came across one recently that was particularly inspiring.
Ultimately, this is a story of perseverance--about how the marshalling of the proper resources, timing, and determination can create opportunities and spur optimism, even if the odds seem to be stacked against it.
For some time now, the Delta Region of Louisiana, Arkansas, and Mississippi has struggled. High unemployment, seasonal flooding, and foreign competition have adversely impacted the region’s agricultural industries.
In the early 2000s, Fruit of the Loom built a 900,000 square foot facility in the delta town of Vidalia, Louisiana as a planned major manufacturing and distribution facility for the southern United States. They provided extensive job training to hundreds of residents in the region as the facility was being built, and a promise of hundreds of new well-paying jobs for a region in desperate need of them.
Shortly after completion of construction, Fruit of the Loom decided to relocate this operation in Mexico to take advantage of the lower wage labor market. Without ever opening the massive building for production, Fruit of the Loom handed the keys of the building over to the town of Vidalia and departed.
The empty structure sat vacant, a reminder of hard times, until a few years ago when Dan Feibus, a veteran of the textile business and former CEO of textile manufacturer, Zagis USA, began developing a denim manufacturing project to take advantage of the resources available for textile production in the region. The vacant building in Vidalia was the centerpiece of his plan.
Vidalia is in the heart of the U.S. cotton producing region, so the primary resource for denim production could be 100% sourced within 200 miles of the Vidalia site. The indigo needed to dye blue jeans could also be locally sourced. Further, there was already a trained workforce in the surrounding parishes and counties thanks to Fruit of the Loom.
Mr. Feibus launched the start-up, Vidalia Industrial Facilities VIF. He worked with the United States Department of Agriculture USDA for a Business and Industry Loan Guarantee. These loans encourage commercial enterprise development in rural cities of less than 50,000 people. This $25 million building and equipment loan with a 60% guaranty was made through Greater Nevada Credit Union.
This was supplemented by a $5 million SBA International Trade Loan ITL, also through the Credit Union, for working capital. The SBA ITL program provides small business owners with capital to finance their fixed assets and working capital needs, offering private lenders a 90% guaranty on loans as an incentive to increase access to capital for growing small businesses.
VIF is also using an $8 million job payment grant from the city of Vidalia to support the project. All told, with the $15 million equity injected by the borrower, this $53 million project is projected to immediately provide over 300 jobs.
Once operating at full capacity, VIF expects to add another 250 jobs. These jobs will pay an average wage of over $13 per hour. VIF will become the single largest employer and only textile mill in Concordia Parish.
VIF will spin cotton into yarn which, with the addition of LYCRA® to add elasticity, will be woven into stretch denim for jeans sold to Wrangler and some higher end jean companies.
Currently only 2% of jeans sold in the United States are made in the United States, with most jeans being made in Mexico, Tunisia, China, Turkey, and Vietnam. The prospect of increased domestic jean production is exciting news, but equally exciting is the expectation that more than 20% of the products made by VIF will be sold internationally.
Thanks to an effective combination of federal and local resources, private investment, ingenuity, and entrepreneurial spirit, the small town of Vidalia, Louisiana is poised to become one of the largest manufacturers of blue jeans in the United States.
SBA is proud to be part of such a great story of the American Dream in action.
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