A Singapore-based food supplier says it will reopen the former De Francesco dehydrating plant in Firebaugh as soon as this summer, despite the challenge of a drought in the central San Joaquin Valley.
Olam International bought the plant in December and is scheduled to begin dehydrating its first crop of onions on a limited basis by late June or early July, said David Watkins, general manager of the new Key Foods Ingredients plant, a division of the Olam Group.
The prospect of little to no federal water for growers on the west side of the Valley altered Olam's plans, but it did not stop them, Watkins said.
"We definitely had to make a few changes," he said. "The water issue has forced us to contract with growers outside the areas that rely on federal water."
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The company shifted its grower base to areas with more access to irrigation water, including Tulare, Kern and Madera counties.
"And so far, the plantings are looking good," Watkins said.
Key Foods Ingredients will ramp up to full production next year as it increases the sale of its product. Much of what it produces in Firebaugh will be sold to food manufacturers, and a smaller portion sold to the food-service industry.
Watkins said he expects to hire about 300 to 400 workers, of whom 120 are expected to be full time. A job fair is scheduled for May.
Olam is one of the world’s leading suppliers of agricultural products and food ingredients, sourcing 14 products from more than 52 countries.
In 2007, the global trader expanded its presence in the spice category by acquiring Pasadena-based Key Foods Ingredients, one of the largest processors of dehydrated garlic from China.
Firebaugh City Manager Jose Antonio Ramirez is grateful that the weak economy and the drought did not change the company’s plans to expand.
"They are committed and moving forward," Ramirez said. "And that is a good thing."
Firebaugh, like much of the west side, is struggling economically as farmers in the region expect to fallow thousands of acres and lay off hundreds.
This year, west Valley farmers will get no federal water unless drought conditions improve dramatically. Growers normally receive their irrigation supply from Northern California rivers, but three consecutive dry winters have dried up supplies.
Ramirez said the company will add much-needed jobs and a revenue boost to city coffers.The city's sales tax plummeted 43% in the last quarter of 2008 compared with the same period a year earlier.
Firebaugh plans to provide Key Foods Ingredients with tax credits through its state enterprise zone designation.
"This is a very big company, and I don't think they would have come to Firebaugh if they did not think they could make this work," Ramirez said.