Brick and tile manufacturing is set to resume by the end of the year at the dormant Tri-State Brick and Tile plant under new owners who see Jackson as a gateway to reaching an additional 30 percent of the U.S. market.
Cherokee Brick & Tile, a Macon, Ga., family-owned maker of brick and tile and distributor of the products to well over half the country, closed on the purchase last Friday. Trustmark Bank foreclosed on the nearly 70-year-old brickyard and associated properties in the summer of 2012. Tri-State Brick and Tile, owned by Jerry Robinson, widow of Robert H. Robinson, owed the bank more than $10 million at foreclosure.
The foreclosure came seven years after Tri-State, through loans from Trustmark, put about $5 million into modernizing its operation, including installing an automated kiln. Tri-State sold masonry materials for residential construction but specialized in brick for the commercial and industrial markets, distributing in 16 states.
Cherokee, headed by third-generation Sams family co-owner Kenneth Sams, says it is making a significant investment in purchasing and retooling the brick and tile plant. City officials put the investment at $13 million – a sum Cherokee President Michael Peavy says is way too high.
He said he suspects city officials used a figure from the Hinds County tax rolls.
He declined to say the amount paid for the foreclosed plant, but noted the sale price left Cherokee with sufficient money to put into the plant’s retooling. “We can put money into it and have a fine running plant,” Peavy said, adding the equipment in place will be returned to working order and used as part of the brick and tile making.
Adding to what’s there
Timing of the additional improvements will depend on future demand for masonry products, he added. “Now we’re kind of watching the market.”
Cherokee began looking at Tri-State three years ago but continued jitters from the recession caused it to back off an acquisition, according to Peavy. It bought an option on the plant at 2050 Forest Ave. in February of this year.
On the shipping side, the company is optimistic it can persuade CN Railroad to restore a 25-foot section of track and an inter-connector it removed after the plant shut down. That would allow rail loading and shipping from the Tri-State site, Peavy said. “We’ve been begging them since March to put that line back in.”
CN has been more responsive of late, he added. “We’re optimistic.”
At one point, frustration over the lost rail capacity nearly caused Cherokee to drop the acquisition, Peavy noted.
Absent restored rail access, Cherokee plans to buy property at Jackson’s Hawkins Field with rail access. It would have to truck the brick and tile there and have it loaded onto rail cars, Peavy said.
Pate Rowell, a Cherokee commercial sales representative, said the plan is to nationally distribute the products made at the Jackson plant.
“We’re excited about Jackson being within 600 miles of 30 percent of the country’s population,” he said in a presentation last Thursday to the Jackson City Council.
Most immediately, the purchase gives Cherokee easier and less costly access to markets in Texas and Oklahoma, Rowell noted. Cherokee is already well established in Louisiana and Arkansas, the company says.
The cost of transporting from Macon has limited Cherokee’s sales in markets west of Jackson, including the thriving Dallas area, he said.
“Transportation is such a huge cost for brick,” Peavy said.
Cutting that costs makes Cherokee more competitive in “Memphis, St. Louis… all those markets,” he added.
Sales will be through a network of distributors in 36 states, Peavy noted.
Some brick and tile will be shipped into Jackson from the three plants the company has in Macon, but those products will be limited to resell and distribution to buyers in Central Mississippi looking for masonry products with shades different from those produced in Mississippi, according o Rowell.
Cherokee plans to hire 25 to 50 workers to start and employ more than 100 at capacity, the company says. Tri-State Brick and Tile employed about 130 workers at its peak during the mid part of the last decade’s construction boom.
The plant should be retooled and making bricks by February, according to Peavy, who said Cherokee has done several months of testing masonry products made from clay taken from the Tri-State site. “We have 24 different runs of brick from that clay,” he added.
Testing shows Cherokee can produce a “tumbled” line of high-end brick from the Mississippi clay. “They will be very excited,” he said of residential developers.
Clay reserves sufficient
Cherokee’s operation in Macon covers 1,200 acres used for both production and mining of clay. It employs about 300 workers there.
Cherokee will mine the Tri-State site, which Peavy said produces a red clay that is a deeper red than its Central Georgia counterpart. Though Tri-State site has been mined for decades, ample supplies of clay remain, according to Peavy.
“From what we’ve seen, there are a lot of reserves left,” he said, citing tests borings and drillings done ahead of the acquisition.
Cherokee will get an assist from the City of Jackson as well as Hinds County and the Mississippi Development Authority.
City Council members tentatively agreed last week to abate about $73,000 a year in property taxes over five years in exchange for the company meeting yet-to-be established participation in Jackson’s minority contracting program and the city’s Jobs for Jacksonians project.
Hinds County and the MDA have agreed to share costs for improving Hilda Road, according to Jason Goree of the city’s economic development department. Hilda Road is behind the main entrance to the plant and will get heavy use from trucks delivering materials and others taking brick and tile to market.
Where it all began
R.H. Robinson founded Tri-State Brick & Tile in 1946. After his death, control of the company went to son Robert D. Robinson, and later the son’s widow, Jerry Robinson.
R.H. Robinson’s daughter, Martha Henne, and her children received preferred shares in the company in the settlement of R.H. Robinson’s estate.
Martha Henne died in the middle of the last decade. Before the end of the decade, her children began worrying that Tri-State’s covering of non-business related business expenses incurred by the late Robert D. Robinson and later Jerry Robinson, including $595,000 in forgiven personal loans, threatened the company’s fiscal health. Court documents detail spending of company money on such luxuries a yacht and a $1.7 million horse farm, as well as nearly $147,000 on credit card expenses.
However, by the time Martha Henne’s children won a court fight to review Tri-State’s finances, foreclosure was imminent. Trustmark foreclosed on July 10, 2012, leaving the children of Martha Henne with nothing from the family business.
Busier times ahead
Meanwhile, revival of brick and tile making at the former Tri-State site comes as a relief to Jackson economic development officials. “This takes a facility that we didn’t know what we were going to do with,” said Duane O’Neill, president & CEO of the Greater Jackson Chamber Partnership.
The sustained slump in construction throughout the South in recent years dropped the number of brickyards operating in Mississippi from eight to a single plant, the 122-year-old Columbus Brick Co.
The closings of plants from Holly Springs to Jackson to Corinth occurred as the $5 billion industry nationally sustained sales losses of 4.5 percent from 2007 through 2012, according to the Clay Brick & Product Manufacturing Market Research Report.
In the nine-state Southeast region of the Brick Industry Association, the volume of brick shipped mid way through 2012 dropped by two-thirds, said Pete Cieslak, president of the association’s Southeast region, in an August 2012 interview.
In the same interview, Cieslak made a prediction that has come true two years later: Buying Tri-State is “the kind of move that could get an outsider a foothold in the region.
“I would not be surprised at all to see a large company or medium-size company come in.”