Amway continues massive manufacturing expansion with $81 million facility

By Hank Schultz

- Last updated on GMT

Related tags Amway

Amway continues massive manufacturing expansion with $81 million facility
MLM giant Amway has broken ground on an $81 million manufacturing and warehouse facility at its headquarters in Ada, MI.  The 317,000 sq-ft. facility will manufacture some of the Nutrilite lines of vitamins and dietary supplements.

The new plant will add 200 manufacturing jobs to the area during the next three years.  The facility is scheduled to being operations in 2015, and will have an annual capapcity of 3 billion tablets and 1.3 billion softgels.

“Increased demand is the driver for our $375 million global manufacturing expansion at seven sites around the globe. Four of the sites are located in the U.S.,”  said Steve Van Andel, chairman of Amway.

Among the other sites are a $38 million, 48,000-sq.ft. herbal extraction facility in Quincy, MA, a a $24 million nutrition powder products plant also in Ada, and a $42 million project in Buena Park, CA, which includes a new granulation facility to support tablet manufacturing; new research and development facilities and pilot laboratories.

The Michigan Economic Development Corporation approved a $1.6 million incentive from the Michigan Strategic Fund to support construction of the facility. Ada Township approved an industrial facilities exemption for the facility as well. The Ada Township tax abatement is for 12 years, the maximum length allowed by the State of Michigan. The Right Place, a western Michigan economic development organization, provided Amway with support in securing those incentives.

Direct selling

While retailers dominate the sales market for nutrition products in the US, the direct-to-consumers route was still worth $16 billion in 2010, according to the Nutrition Business Journal​.

There are four main channels for direct-to-consumer sales: multi-level marketers (MLM), direct media (TV, radio, print), practitioners, and the internet. MLMs accounted for 46% of the market, with direct media, practitioners, and the internet accounting for 17, 19, and 18%, respectively, said NBJ.

Nutritional product sales accounted for 46 percent of Amway sales last year. Alticor, parent company to Amway, reported 2012 sales of $11.3 billion.

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