Nirvana to boost production, add equipment and workers

BOONVILLE — A $4.3 million Small Business Administration (SBA)-backed loan for new equipment will help Nirvana, Inc. increase its production by 67 percent and boost employment by nearly 50 percent.

The loan through the New York Business Development Corporation (NYBDC) will allow the company to purchase and install a new injection line to make its plastic water bottles as well as a new bottling line. Bringing the bottle production back in-house should save the company millions in annual costs and boost Nirvana’s work force from the current 125 employees to about 185 employees, says Mozafar Rafizadeh, president and CEO of Nirvana.

“We were buying the pre-forms and we were buying our caps,” he says of Nirvana’s current bottle-production system. The company would then finish the pre-forms into bottles, but once the new equipment is installed, it will be able to handle the entire process in-house, he says.

Nirvana will install the new equipment and begin production on it by mid-June, Rafizadeh says. The company will also begin hiring in the near future to add machine operators, forklift operators, quality control employees, office staff, maintenance workers, and sales representatives.

“These are very good paying jobs for the area,” Rafizadeh says. The jobs’ starting pay ranges from $9 to $16 or more per hour, depending upon the position and the employee’s experience.

Along with bringing the bottle production in-house and boosting employment, the new equipment will also increase Nirvana’s production capacity, Rafizadeh says. The company produced 12 million cases of bottled water last year, but lost out on the sale of about 5 million cases that it had demand for, but couldn’t produce enough water at its current capacity, he says. 

Now, Nirvana should be able to churn out 20 million cases this year, he says. That additional production capacity is crucial as the company continues its shift away from bottling private-label water for other clients and focuses more on its own Nirvana brand, Rafizadeh says.

For many years, the company, which was founded in 1998, concentrated about 85 percent of its business on private-label bottling and only about 15 percent of the water it produced and sold was the Nirvana brand.

However, in 2011 the company decided to shift away from the private labels and began focusing more on its own brand. Rafizadeh believes the company will build more long-term value by focusing on its own brand, rather than just bottling water for others. Last year, about 85 percent of the water was Nirvana, with only 15 percent private label, Rafizadeh says.

This year, private-label water will make up only about 5 percent of the company’s sales as it continues the push of the Nirvana brand, he says.

The change has been beneficial so far, with revenue growing from $22 million in 2010 to $30 million in 2011. Rafizadeh expects revenue to top $40 million this year and head toward $60 million by 2013.

Nirvana sells its water across the Northeast from Maine to Maryland and as far west as Ohio, but the bulk of the sales come from the New York City area. A number of grocery chains including A&P, ShopRite, Pathmark, and Food Town carry the Nirvana brand.

The expanded product capacity will help the company keep up with demand in those markets, Rafizadeh says.

Nirvana (www.nirvanaspring.com) sought the SBA-backed loan for the project in conjunction with its own private investments and loans. Nirvana officials did not say how much the company is investing in the project. The company worked with U.S. Sen. Charles Schumer (D–NY) to meet with NYBDC  to obtain the loan. NYBDC, which works with an array of lending institutions, helped Nirvana secure a federally guaranteed long-term loan for the new equipment. The company did not provide further information about the loan including interest rate, term length, or the name of the lending institution.

“This SBA loan will open up the flood gates to more water and more jobs,” Schumer said in a news release announcing the loan.