Another company founded in Germany will grow in Central Texas, Knauf Insulation announcing it will place a 600,000-square-foot manufacturing plant in McGregor’s industrial park, home to a SpaceX rocket testing site.
Knauf will break ground this year and hopes to become fully operational by late 2023. It will employ 161 people while creating an additional 300 jobs in the area via vendors, contractors and suppliers, Knauf said in a press release. It will be the fifth German company to set up shop in the Waco area, said Kris Collins, senior vice president for economic development at the Greater Waco Chamber of Commerce. Among them are Uzin Utz, which started work in January on a Waco plant to produce flooring-related products, and Zinkpower, which has a new Waco hot-dip galvanizing plant up and running.
“The relationships we’ve built with our German and international clients certainly helped build a strong bond with the company,” Collins said.
Discussions with Knauf started in 2018 and were spearheaded by the Office of the Governor, Collins said. The state is giving Knauf an almost $820,000 Texas Enterprise Fund grant for its McGregor facility, according to a press release Tuesday from Gov. Greg Abbott.
The company will invest $20 million in infrastructure, including extending a rail line, which should make the 9,800-acre industrial park more attractive to would-be developers, Knauf announced.
The park already has SpaceX’s attention, the aerospace company owned by Elon Musk leasing about 4,300 acres there. It employs almost 580 people who test rocket engines, and recently announced a $150 million expansion and the hiring of about 400 people to build rockets.
“Knauf’s geographic footprint will be about 160 acres, give or take,” said Andrew Smith, McGregor Economic Development’s executive director.
He said landing Knauf took a team effort, including contributions “from just about everybody in the region because these projects don’t happen overnight.”
Smith said Knauf will receive incentives, though he did not discuss specifics.
“For McGregor, every kind of incentive deal is tailored to the project,” Smith said. “It has to make sense for the prospect but also for the stakeholders, the taxing entities, the community. We want companies that want to be good partners, with no pollution and a willingness to hire people in the area.”
He said Knauf built its reputation in the construction industry, “and Texas and Central Texas are kind of booming in that area. Residents are moving in, houses are being constructed. The plant has a strong market right here.”
Knauf has other plants in Albion, Michigan; Inwood, West Virginia; Lanett, Alabama; and Shasta Lake, California, meaning the country’s midsection lacks the representation McGregor will provide, Knauf Vice President for Strategy and Innovation Kevin McHugh said by phone.
McHugh said McGregor makes sense for geographic reasons. Asked about finding employees, McHugh said they are hard to come by everywhere.
“Something that put McGregor over the line was its workforce development capabilities, with Texas State Technical College, McLennan Community College and even the Transition Assistance Program at Fort Hood,” McHugh said. “All three of those are opportunities for us to overcome the labor challenge.”
He laughed and said he doubts Knauf would provide insulation to SpaceX for its rockets, but its facilities might prove fertile ground.
Knauf Insulation North America is a subsidiary of Knauf Group AG, a family-owned company with 250 production facilities in 86 countries that generate $12 billion in annual revenue, according to a company fact sheet.
The fact sheet says the McGregor plant will produce 500 million square feet of insulation annually, enough for 125,000 homes.
Knauf predicts its McGregor facility will directly benefit the Texas economy $1 billion over 10 years, and $1.1 billion indirectly over that period.