JTI Leaf Services is in the midst of a $7 million expansion of its Danville tobacco processing facility and the first step — a new, 110,000-square-foot, $4 million storage facility for both raw and processed tobacco — was unveiled Thursday.

Virginia Secretary of Agriculture Basil Gooden praised the company for its investment in the region — a total of $70 million since it broke ground in Danville in 2009.

The second phase of the expansion will be a new, on-site buying station, according Steve Daniels, president and CEO of JTI Leaf Services.

“We have grown our volume and physical footprint every year since 2009,” Daniels said. “This is the most state-of-the-art tobacco processing plant in the world.”

The initial expansion will not add jobs at the plant, but it will make the facility more efficient and streamlined — which helps secure and retain existing jobs, Daniels said.

“We’re very proud of the 300 full-time and seasonal employees we have on here, some of whom come from places as far away as the Ukraine, Serbia and, of course, Japan,” Ward Anderson, corporate affairs and communications manager for JTI Leaf Services, said.

JTI Leaf Services is a limited liability corporation formed to supply Japan Tobacco International “exclusively with directly contracted U.S. leaf tobacco, renowned globally for its high quality and rich flavor,” according to the company’s website.

There were no state or local financial incentives announced for the company Thursday, but there could be some incentives for the next phase.

“They will qualify for local enterprise zone incentives,” Telly Tucker, Danville’s director of economic development, said.

Those incentives could include waivers of permitting fees and a cut in Danville’s machinery and tools tax, Tucker said, a figure difficult to estimate until it is known what machines the company will add.

“We are also working on an Industrial Enhancement Grant for the project,” Tucker said, adding that a firm figure for that had not yet been set.

At the state level, Tucker said, JTI Leaf Services qualifies for a state Real Property Investment Grant through the state Housing and Community Development department, which also could be sought for the next phase of the project.

Danville Mayor John Gilstrap expressed his appreciation for the investment JTI has already made in the city.

“All of the traditional processors of tobacco had left our city by the time Japan Tobacco announced its intentions of opening this processing plant … Not only does this facility provide employment for a number of our citizens, its purchases of tobacco from farmers who live nearby provides those farmers direct access to a large and growing international cigarette and non-smoking tobacco market,” Gilstrap said.

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Denice Thibodeau is a reporter for the Danville Register & Bee. Contact her at dthibodeau@registerbee.com or (434) 791-7985.

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