One of Mexico's largest canned-food companies landed in Tucson on Wednesday to establish its first U.S. manu-facturing plant at the former Slim-Fast building on the Southeast Side.
Tucson economic leaders hailed the arrival of La Costeña Foods as a milestone event for the area. The company plans to employ about 100 people initially when manufacturing begins next June.
If manufacturing companies are the gold standard for economic development, La Costeña, operating here as Arizona Canning Co. LLC, represents "platinum wrapped in diamonds" because it is a headquarters office for a foreign manufacturer, proclaimed Joe Snell, president and CEO of Tucson Regional Economic Opportunities Inc.
La Costeña produces an array of products from mayonnaise to canned tomatoes and fruits. In Tucson, the company plans to start processing canned, refried and whole black, charro and pinto bean products in about a year.
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First, the company must make some renovations to the $100 million Slim-Fast plant, which had a short life as a manufacturer of diet drinks.
Initially, La Costeña plans to produce nearly 3 million cases a year of canned bean products for the U.S. market. It could employ up to 175 in three years.
Jobs will include managers, maintenance technicians and equipment operators. Hourly wages will likely range between $10 and $20 an hour, said plant manager Shane Gesbeck. Most workers will be recruited locally, the company said.
The company plans to buy raw materials from U.S. suppliers.
Tucson is an "ideal location for them" because it has good transportation links to the growing Hispanic markets from California to Texas, said Raul Gamez, TREO's business development specialist.
La Costeña, in business in Mexico for more than 80 years, is "as good as you can get" in the field of foreign investment, he added.
"This really is good stuff," said UA economic forecaster Marshall Vest. "It's a real feather in our cap to bring in a foreign company to establish U.S. headquarters."
Manufacturing products here for sale elsewhere brings "fresh dollars to the community," he added.
"This could be a watershed event for Tucson," said Mike Hammond, president of Picor Commercial Real Estate Services, which represented Slim-Fast in the sale.
"Most important, this puts Tucson on the map for entry to the U.S. market by Mexican and Latin American manufacturers."
Documents in the Pima County Recorder's Office show that Arizona Canning Co. LLC, the company formed for the venture, paid $27.5 million for the 85-acre property at 8755 S. Rita Road. No incentives were offered to land the company in Tucson, Snell said.
Some controversy surrounded a $7 million package of incentives that helped bring Slim-Fast here in 2000. But the incentive package was cancelled after Slim-Fast closed its plant at the end of 2004.
Landing a tenant for the Slim-Fast plant is "huge" for the University of Arizona Science and Technology Park directly west across Rita Road, said Bruce Wright, UA associate vice president for economic development. Together with the recent addition of the Citibank call-center operations and the arrival of aerospace supplier Glass Fiber Inc. at the tech park, La Costeña's presence "redefines this part of town as an important industrial center," Wright said.
La Costeña's move here — coming after Glass Fiber's arrival, Citibank's expansion and Pella Corp.'s recent move to the former Weiser Lock building on the Southwest Side — just about exhausts the Tucson area's supply of large, vacant industrial space, both Snell and Hammond noted.
Santiago Castro, director general of Conservas La Costeña and CEO of Arizona Canning, acknowledged the "very valuable assistance of TREO" in the company's decision to locate in Tucson, which he called "a breakthrough in the history of our organization."
He pledged the company would act in all respects as "a good corporate citizen" and hire "as much as we can locally."
Mayor Bob Walkup made a commitment of his own at the 11 a.m. announcement at the plant. Looking at a table arrayed with La Costeña products, he declared, "We're going to eat this brand from now on — eat it and promote it."
Name: Conservas La Costeña
Founded: 1923
Headquarters: Tulpetlac, state of Mexico (near Mexico City)
Employees: 2,000
Other plants: Guasave, Sinaloa and San Luis Potosí.
Products: Beans, tomato purées, ketchup, vegetables and others.
Markets: Mexico, Latin America, the United States, Europe, Asia
Sources: Conservas La Costeña, TREO