Apache breaks ground for expansion

Apache Inc. in Cedar Rapids broke ground Wednesday for a $7.3 million, 90,000-square-foot addition that will nearly double its manufacturing and warehousing capacity.

The employee-owned company at 4805 Bowling St. SW fabricates and distributes hose, belting, cut and molded rubber, and industrial consumer products for domestic and international customers.

Tom Pientok, Apache president and CEO, said the additional manufacturing and warehouse space is needed for existing business as well as anticipated growth.

'We are bursting at the seams over here,” Pientok said.

'We're investing heavily in some equipment with better capabilities and better technology.”

Pientok said Apache has grown over the years without adding space.

'We've just gotten to the point where we're so tight on space that it's impacting productivity.” he said. 'It's forcing our guys to move material twice and that's expensive.”

Kyle Gingrich, Apache vice president of operations, said the new addition will allow the company to rearrange material and work flow to improve manufacturing efficiency.

'We contracted with a third-party industrial engineering firm,” Gingrich said. 'They looked at what we do today in our various work cells and helped us lay out our entire floor plan using the 90,000-square-foot addition to maximize productivity efficiencies.”

Gingrich said 2,000 dump truckloads or 250,000 cubic yards of dirt will be needed to bring the construction site up to the level of Apache's existing building.

'It will need to be compacted so we can make sure we have a good foundation,” he said.

Point Builders of Cedar Rapids is general contractor for the project. Pientok said the addition should be ready for full production in March 2016.

The project will require moving a stormwater retention pond. It also will include 43,000 square feet of covered outside storage on the north side of the building as well as additional dock doors and more than 70 parking spaces.

The Cedar Rapids City Council approved a property tax break for the project, which will allow Apache to forego 64 percent of the property taxes on the company's investment over 10 years. That will equate to an estimated savings of $683,702. During the 10 years after the incentive expires, Apache's expansion is expected to generate $1 million in new property tax revenue.

In return, Pientok said Apache will retain 27 jobs and create 15 new positions primarily in manufacturing.

The Iowa Economic Development Authority Board also approved a $75,000 forgivable loan and tax credits from Iowa's High Quality Jobs Program for the Apache project.

Kirsty Sanchez, a planner with the city, said Apache received and turned down a 'competitive incentive” to expand its business to a location outside of Cedar Rapids and Iowa.

Apache, which employs about 170, is owned by its employees through an Employee Stock Ownership Plan. Apache's founder, Bob South, sold the company to its employees in 1985.