Local and company officials were excited Monday to share news of significant investment planned at Walmart Distribution Center in Seymour.
During a Seymour City Council meeting that night, Jim Plump, executive director of Jackson County Industrial Development Corp., spoke on behalf of the company in announcing a $107 million investment in the facility at 2100 E. Tipton St. on the city’s far east side.
The council unanimously approved the statement of benefits for one qualified personal property tax abatement ($101 million for supply chain material handling equipment — logistics distribution — and $2 million in information technology equipment) and one real estate improvement tax abatement ($5 million for construction-related costs associated with supply chain enhancements).
The council also unanimously approved resolutions for the two tax abatements, which are for 10 years apiece. A tax abatement is a 10-year period where companies pay 10% more on taxes each consecutive year. They do not pay any taxes on the first year.
Plump was joined at the meeting by Kevin Porter, senior manager for the Walmart tax department at the company’s home office in Bentonville, Arkansas, and Mike Baecke, general manager for Regional Distribution Center 6017 in Seymour.
“As normal when requesting abatement, we have confirmed that this is just not software, this is hardware, so there is a 10-year life expectancy with IT equipment,” Plump said in introducing the personal property investment.
After he followed with the real property investment information, Plump said he was pleased to say this will be a multi-year project.
“So very good possibility that in the coming years, maybe ‘25, ‘26, you’ll be seeing Walmart again in front of you with additional investments as they work to modernize the distribution center here,” he said.
The project is estimated to begin Jan. 1, 2024.
“Although the reason for them coming here tonight is that there may be some preliminary work that is done the second half of ‘23, and we had talked with them about going ahead and getting abatements approved, seeing maybe so that they would not have to worry about any expenditures occurring before abatement was granted,” Plump said.
Although no new jobs are promised as a result of the investment, Plump said it will allow the distribution center to retain its 914 employees, who have an average salary of $50,722. That doesn’t include the 200-plus employees in the transportation portion of the Seymour site.
Councilman Bret Cunningham asked about no jobs being added with this investment and if automation was involved.
“There is some automation,” Porter said. “It’s going to really enhance the facility. There is some improvement that needs to be made, a lot of new equipment to kind of get up to speed on the technology piece of equipment to make it more efficient. Automation would be a piece of it but not the whole piece.”
Councilman Drew Storey asked if sticking with 914 employees was planned over the 10-year abatement, and Porter said yes, for this first abatement request.
“Plus or minus, we don’t know exactly. We don’t know what the future holds, obviously, and a lot of that is going to be dictated on macrofactors and volume at the site,” Porter said. “It’s our intention plus or minus.”
While no square footage is being added with this project, Porter said the intent with retrofitting the existing equipment is to increase volume.
“A lot of it’s going to be related to really enhancing the site,” he said. “It’s relatively older, but we wanted to invest here … really just making a significant investment so that the efficiency of the site will be better.”
Seymour Mayor Matt Nicholson confirmed with Baecke that if any of the council members want a tour of the facility to see the current equipment, they could reach out to him to set it up.
“Your current system was absolutely amazing when it was put in,” Nicholson said of the center, which opened in the summer of 1990. “I can’t imagine what the next generation is going to look like.”
According to a news release issued Monday night, Walmart said the investment is the company’s broader initiative to renovate all of its 42 regional distribution centers as the retailer continues to modernize its vast supply chain network to provide customers with better reliability, service and speed.
Currently, product arrives at a regional distribution center and is either cross-docked or warehoused until it’s needed, and the products are moved or stored manually, according to corporate.walmart.com. When it’s time for the product to go to a store, someone is tasked with packing a 53-foot trailer in a human game of Tetris for transit. When the truck arrives at a store, associates unload it manually and get the items where they need to be.
The brand-new technology system works to sort, store, retrieve and pack freight onto pallets. The company will use automation to revolutionize intake, increase accuracy and change how freight is handled at the regional distribution centers.
The new way of unloading store-friendly palletized trucks will make the process faster and simpler for associates, allowing them to spend more time with customers, the company says.
Once complete, the center will be able to ship nearly double the number of cases while evolving strenuous, manual jobs into those offering new skills in robotics and technology.
“Walmart’s Seymour distribution center has been a pillar in our community for over 30 years. Adding robotics, automation and AI-powered software systems to this facility will revolutionize an already impressive operation, fundamentally changing the way we distribute products to stores,” Baecke said in the news release. “This isn’t just an investment in our facility but also in our associates, our community and our future.”
Regional distribution centers are a strategic part of Walmart’s supply chain network and exist to keep its more than 4,700 stores stocked with ambient merchandise, such as food items, home goods and tech gadgets, according to the news release.
“The improvements we’re making in our Seymour, Indiana, distribution center will be felt by store associates and customers in the surrounding region,” James Valenti, regional general manager for Walmart’s North Operations, said in the news release. “For our store associates, these investments will make it significantly easier and faster to stock shelves, which results in our customers having the items they want when they want them.”
The retailer employs more than 43,000 associates in Indiana and supports local business across the state, spending $1.1 billion with Hoosier suppliers in fiscal year 2023 and supporting 33,300 Hoosier supplier jobs, according to the news release.
With fiscal year 2022 revenue of $573 billion, Walmart employs 2.3 million associates worldwide.