Chelsea Milling Plans Expansion

BY JIM NORMAN Business-Labor Reporter
Chelsea Milling Co., the maker of "Jiffy" baking mixes, plans a $2 million expansion to increase its production of mixes 50 per cent.
Howard Holmes, company president, says tentative plans are to build a six or seven story addition to the firm's downtown Chelsea flour works.
Work would begin next spring and be completed in a year, he says. Financing arrangements have yet to be finalized with Chelsea Million Co.'s bank lenders.
Chelsea Milling pioneered the idea of packaged baking mix for home use in 1930 with its Jiffy biscuit mix.
Now it ranks first, second or third in sales of each of its 19 varieties of packaged mixes marketed nationally against competitors like General Mills, Pillsbury and General Foods.
Holmes says the planned expansion will increase its 10 mix packaging lines to 15 and many allow addition of new mix products.
He expects there may be some net gain in employment from the project. Chelsea Milling currently employs about 225 workers.
The expansion could also give the firm needed capacity for entering the wholesale mix market. So far all its mix sales have been for retail use in the home..
The high-rise addition, expected to cover 30,000 square feet, will house mixing chambers in which mix ingredients are poured in from the top and allowed to mix as they fall.
Chelsea Milling grinds its own flour from about 1.5 million bushels of wheat a year. The grain is stored in a battery of elevators along the conrail tracks - a landmark in the village.
The flour-making operations would not be affected by the proposed expansion, says Holmes.
Officials of the family-operated firm plan to seek property tax relief on the improvements from the Chelsea village council Nov. 2 under Michigan's Industrial Development Act.
Under Michigan's Public Act 198 or 1974, eligible industrial improvement projects can get Significant property tax breaks for up to 12 years.
Improvements to old facilities can be taxed at the unimproved rate. Nev! industrial facilities can be taxed at half their normal rate.
If granted by Chelsea officials, the hoped for tax break could save Chelsea Milling about $60,000 a year, Homes, estimates.
The planned expansion would be the first major enlargement for the firm since 1970 when it added a 36,000 square-foot warehouse.
Holmes and his twin brother Dudley, vice president are grandsons of Harmon S. Holmes, who bought the former milling business of E.K. White 75 years ago. The elder Holmes was White's son-in-law. The company has thus been in the family since 1802.