Glove factory planned near Gallup

By Kathy Helms
Diné Bureau

CHURCHROCK — A rubber glove manufacturing facility to be built in Churchrock has received a $3.4 million boost to help finance construction in the form of a Public Works Grant from the U.S. Department of Commerce’s Economic Development Administration.

Sharlene Begay-Platero, Industrial Development representative with the Navajo Nation Division of Economic Development who has been working on the project for the last two years, made the announcement Wednesday at the close of an Economic Development Committee meeting.

Begay-Platero said afterward that the division received the award letter during Christmas. Since then, she has been working to get it through the SAS process.

Churchrock/Breadsprings Delegate Charles Damon is expected to sponsor the legislation.

The EDA investment is a five-year grant for construction of a manufacturing, training and Small Business incubator building in the industrial park, one lot away from Cabinets Southwest.

The Navajo Nation Council appropriated $700,000 for the project, the New Mexico Legislature’s Capital Outlay kicked in $150,000, and the Nation’s Business Industrial Development Fund contributed $200,000. Total cost of the project, as presented to Council in 2006, was estimated at $3.45 million.

After Council appropriated $700,000 from the Unreserved, Undesignated Fund Balance to serve as matching funds for the project, “the bids came out very high,” Begay-Platero said. “That’s when we went out and told EDA our story and the concept of this being a manufacturing facility to go after federal contracting.

“They came out to visit the division and this is one of the projects they visited. Raytheon was one of them, too.

They really liked the rubber glove part, so we put in our application and followed the Public Works RFP and put in all of the paper work and all of the documentation ... to show that we’re construction-ready with this project,” she said.

The glove facility is to be leased by Navajo Safety Products Inc., a tribally chartered corporation under the auspices of Diné Development Corp., a Navajo holding company, and will manufacture disposable synthetic latex gloves to the U.S. Department of Defense and other federal agencies.

The plan is for the corporation to become a Section 8(A)-certified company to go after federal contracting, Begay-Platero said. “We have our tribal enterprises, but we don’t really have enterprises that go after federal contracting as a tribal corporation, so we are partnering with two gentlemen who are in the business now.

“Our goal is trying to create more economic-based jobs for our Navajo people. You’re making the product but you’re selling it to someone else outside your economy to help boost your economy,” she said.

Ed Buccellato and John Feusner of ISA Corp., partners in the Navajo project, have two facilities already in existence — one in Salem, Ore., and one in Tecate, Mexico. The Oregon business services a significant portion of the military while the plant in Mexico manufactures a synthetic exam glove designed to protect users from allergic reactions to natural rubber.

“We think this is an absolutely wonderful opportunity for the Navajo Nation. Given the fact that they have a preference in terms of providing products to the federal government, this would be a wonderful niche product for them,” Buccellato said Wednesday afternoon in a telephone interview.

He commended Begay-Platero for almost single-handedly putting together financing for the project. “I have never seen anyone work this hard and this diligent.”

Though he has had limited involvement with the Navajo Nation, reiterating words he spoke to Council, Buccellato said, “What’s most important to me is that the people in that area will benefit from this in terms of employment.

“We know that’s been a problem for many, many years and we think this will be a wonderful opportunity, not only in terms of creating economic benefit for the Nation as a whole, but also to help individuals become employed.

We’re hopeful that we will be able to help in that effort.”
Begay-Platero said, “Part of the agreement is that they’re going to teach us how to be managers, so once our agreement is done with them, then we’ll have Navajo management. They want to hire Navajo people to start running the business – like a Navajo chemist. They really want to educate and mentor once their contract is done.”

The next step is to put all of the pieces of financing together, Buccellato said. “It’s taken a number of years to get to this point, but we’re rather excited about it.”

Begay-Platero said the division also is working with BIA and a commercial bank on a loan guarantee, “so that we can have the proper equipment for this facility. BIA would do the loan guarantee,” she said.

The 2006 cost breakdown showed $500,000 for infrastructure and site development, $2,250,000 for equipment and working capital, and $700,000 for a 20,000-square-foot manufacturing facility, with Navajo having a 20 percent equity contribution.

Revenue for the Navajo Nation is projected at $12,000 a year in lease payments and $58,000 in tax revenue. The U.S. market for disposable examination gloves is estimated to be $30 billion annually.

Though the original legislation cited the project as initially providing 70 jobs and increasing to 80 in the second and third year, Buccalleto said they have been in the process of revising those numbers. “I think we’re projecting on a long-term basis, something in the neighborhood of 30 to 50 people,” along with about 30 temporary construction jobs.

Once the Church Rock facility is in place they will make their pitch for contracts to the federal government. “You can’t place contracts unless they know that there is a facility in place and products can be provided,” Buccalleto said.