CZ-USA Pushes Port Plant Construction to June

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Construction of Czech gun-maker CZ-USA’s gun manufacturing operation and North American headquarters on 73 acres at the Little Rock Port has been pushed to the summer.

The project, announced with fanfare in April 2019, was valued at $90 million and expected to create 565 jobs. State officials said then that construction would begin “immediately,” with start-up planned for March 2020.

Arkansas Economic Development Commission spokeswoman Chelsea O’Kelley provided the following statement to Arkansas Business on Thursday:

“AEDC, the Port of Little Rock, and CZ have mutually agreed to extend to June 1, 2021, the date by which construction of CZ’s new plant must start. The delay is necessary because the COVID-19 pandemic has made travel between the Czech Republic and the U.S. very difficult. CZ staff must be able to freely travel to Little Rock in order to supervise construction. 

“We are hopeful that will improve by next Spring. We talk frequently with CZ leadership, and financing is not a concern,” the statement continues. “The ability for the company’s project and leadership teams to travel safely and uninterrupted is the reason for the date extension. CZ has emphasized that they remain committed to the project and are appreciative of our willingness to work with them on the construction timeline.”

The Arkansas Times first reported the project’s delay in a blog post yesterday

Earlier this year, the company began work on an initial public offering on the Prague Stock Exchange to fund an expansion that would include the Little Rock factory. Originally valued at more than $200 million, the company this month announced a dramatically smaller offering, one whose proceeds are now expected to be about $35 million, according to an Oct. 2 report by Reuters.

According to the report, the chairman of CZ-USA’s parent, CZG-Ceska Zbrojovka Group, said the plant, “which will help CZG tap U.S. segments often protected by ‘Buy America’ laws, should be operating by the end of 2021.” The Reuters report also indicated that demand for the IPO had been “weak.”

A staffer at CZ-USA told a reporter that its vice president of marketing was the only person who could answer questions about the delay, and he is unavailable until next week. 

Bryan Day, executive director of the Little Rock Port Authority, is also out of the office until next week, according to his staff.

Arkansas is providing an array of incentives for the CZ-USA project, including a forgivable loan, a grant from the governor’s Quick Action Closing Fund for infrastructure and money for employee training. 

The project also qualifies for AEDC incentives Create Rebate, an annual cash rebate based on the number of jobs at the plant, and Tax Back, which reimburses the company for sales taxes it pays on building materials, machinery and equipment associated with the project.

In addition, the city of Little Rock and Pulaski County are providing port acreage to the company free of charge, provided it creates the 565 jobs. 

Local, state and federal leaders also broke ground in July on $11 million in transportation infrastructure projects at the port. Work has begun to widen and improve Zeuber Road to meet heavy industrial standards in anticipation of new companies, including CZ-USA, locating their facilities there.