Leisure Products International Inc., or LPI, announced Friday its purchase of the former Cantech Industries building in the Johnson City Industrial Park to be used as an off-site warehouse.
“We’ve got a bottleneck in our process right now, and our problem is getting the products out the door fast enough,” Leisure Products International CEO David Hatley said Friday. “We have the capacity to make the product now, but we have really big products, and we’ve run into space constraints for the last couple of years.”
Moving the tubs and spas currently stored in its Twin Oaks Drive plant will allow LPI to dedicate more floor space to manufacturing.
Hatley said he expects to hire at least 150 to 200 new workers in the next two years because of the added room. There are 275 employees working at the plant now.
LPI moved in 2016 to the former Bosch brake plant in Johnson City from a smaller leased facility in Kingsport that Hatley said was too cramped. Later that year, it bought competitor Catalina Spas and added a high-end swim spa to its product offerings.
Last year, Intertape Polymer Group, parent company of tape manufacturer Cantech, announced the closure of its Eddie Williams Road plant in Johnson City. Seventy employees lost their jobs earlier this year when Cantech’s doors shut.
Will Barrett, chairman of the board of the Northeast Tennessee Regional Economic Development Partnership was pleased by LPI’s announcement.
“It’s a great example of a company that can replace a lost industry and make it even better than it was before if you look at it in terms of the wages and jobs that are potentially on the table,” he said in an emailed release announcing the expansion.
The three-county economic development organization worked with LPI to help it land local and state incentives when it relocated in 2016, and its staff helped the company find the available Cantech property.
LPI bucked the dealership-based product delivery model used by most in its industry by selling directly to its customers. It operates 42 retail sites in the U.S. and hopes to add 100 more in the next few years.
Hatley said the model has helped the company avoid a downturn its competitors are experiencing.
The company also “has a labor pool that is unbelievable right now,” after increasing starting wages by 30 percent last year, Hatley said.
“We couldn’t grow because we couldn’t get good, qualified people,” he said. “We took a slight price increase and raised the wages, and that’s been one of the best decisions we’ve ever made. I would encourage some of our other manufacturers to do the same.”