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Texas has a craving for hot-sauce company

Posted Sunday, May. 04, 2014  comments  Print Reprints
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A closer look

Huy Fong Foods, which makes Sriracha and other sauces, began in Los Angeles in 1980 and has steadily grown in the hot sauce market.

Sriracha, its most popular hot sauce, is made from red jalapeños that are ground into a paste along with vinegar, garlic, sugar and salt. In 2012, the company sold 20 million bottles.

Sriracha is the name of a town in the Chonburi province of Thailand. Huy Fong Foods was named for the freighter that founder David Tran took when he left Vietnam more than 30 years ago.

The signature rooster on the bottle signifies Tran’s astrological sign.

Sources: Huy Fong Foods and Star-Telegram research

 

Welcome to Texas, partner!

For years, Gov. Rick Perry has traveled the country, preaching a message of low taxes, smart regulations and job creation, hoping to lure residents and businesses to Texas.

Since 2000, when Perry first became governor, more than 100 California companies have moved to Texas — relocating their headquarters, expanding their business or doing a partial relocation.

Among those companies:

• Diodes Inc., which brought 100 jobs to Dallas in 2004

• Grifols USA, which brought 100 jobs to San Marcos in 2009

• LegalZoom.com, which brought 600 jobs to Austin in 2010

• Chevron Corp., which brought 1,752 jobs to Houston in 2013

• Flextronics/Motorola Mobility, which brought 2,000 jobs to Fort Worth in 2013

• MonkeySports, which announced this year that it’s bringing 225 jobs to Allen

A sampling of non-California businesses that chose to come to Texas:

• Toyota Motor North America recently announced that it is moving its headquarters to Plano, bringing a more than $300 million capital investment and a plan to employ nearly 4,000 people.

• Borusan Mannesmann Pipe announced last year that it will expand its manufacturing operations to the U.S. with a steel pipe plant in Baytown, creating 250 jobs and bringing $148 million in capital investment.

• James Skinner Baking Co., based in Omaha, Neb., announced in 2012 that it would buy the former Sara Lee bakery in Paris and spend $25 million on upgrades. With the move came 393 jobs.

Sources: Governor’s Office of Economic Development and Tourism, Star-Telegram research

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Texans believe there’s no such thing as too hot.

Especially when it comes to spicy foods.

So it was pretty much a no-brainer for state Rep. Jason Villalba when he learned that the makers of the popular Sriracha hot sauce are having problems in California, where officials believe production of the spicy liquid is too pungent and may declare it a public nuisance.

He reached out to the people at Huy Fong Foods to let them know that their fierce red sauce — one of the top-selling condiments in the U.S. — would be a perfect fit for Texas. Now he and other officials are gearing up to head to California next week to make a formal pitch for the move.

“We are excited about this opportunity,” said Villalba, R-Dallas. “We recognize that we have a long journey ahead of us. But we are cautiously optimistic that we will be able to bring some high-paying jobs and great hot sauce to this region of the country.”

Generally, efforts to woo companies and residents to Texas from other states begin with top officials such as Gov. Rick Perry, Lt. Gov. David Dewhurst and Attorney General Greg Abbott.

But Villalba said he couldn’t help but reach out, even though he realizes that Texas is far from alone in trying to lure the company out of California, where it has been for more than three decades.

Leaders from other states, including Alabama, Arizona, Georgia, Louisiana, New Mexico and Ohio, are also reaching out to the makers of Sriracha. So are officials from other parts of California, including Los Angeles and Hesperia.

But that won’t stop Texans who appreciate spicy foods from moving forward with their pitch.

“Sriracha may not be welcome in California, but you’d be welcomed with open arms and eager taste buds in Texas,” U.S. Sen. Ted Cruz, R-Texas, recently tweeted.

Too hot to handle?

Sriracha, easy to recognize with its signature rooster logo and green caps on plastic bottles, is a spicy Asian sauce made of red jalapeños ground into a paste along with vinegar, garlic, sugar and salt.

In 2012, Huy Fong Foods sold 20 million bottles of the sauce, which is used on everything from soups and pasta to hot dogs and pizza.

The company has been so popular that just a few years ago, Irwindale, Calif., about 20 miles east of Los Angeles, lured it there. On land sold to it by the city, the company built a $40 million, 650,000-square-foot factory.

But last year, Irwindale sued Huy Fong Foods, saying the smell of the peppers being crushed and processed was causing headaches and nosebleeds, irritating eyes and throats, and leading people to gag and cough in this industrial town.

Huy Fong Foods said it has worked with air quality officials on the facility’s filtration system since the complaints began. And company officials invited people to check out the new facility this year to see for themselves “how delicious it smells.”

At first, Los Angeles courts declined to shut down the factory, but a higher court judge ordered the factory to stop producing the smells late in the year, which happened to come after the pepper-processing time had ended.

The City Council was set to formally vote in April on whether to declare the factory a public nuisance and require it to stop emitting the fumes by late July.

But officials delayed their vote until May 14 — two days after Texas lawmakers will tour the factory.

“No one wants you here more, Huy Fong Foods, than this City Council,” Irwindale Mayor Mark Breceda told CEO David Tran during a meeting last month. “I’m positive we can resolve the issue.”

Villalba said he was stunned to hear about what was happening to the company, which is why he sent more than one request to meet with Tran.

“At first, they were a little reluctant,” Villalba said. “When [the factory] was shut down … we wrote them another letter. And he invited us out to California to sit down with him.

“I’m not under any illusions we are the only ones communicating with them,” he said. “But if there’s an opportunity to bring good, high-paying jobs to Texas, I’ll chase that to the ends of the earth.”

Come to Texas (and bring your sauce)

The desire to lure Huy Fong Foods to Texas first gained media attention last year when Denton Councilman Kevin Roden tossed out the idea after Irwindale filed its lawsuit.

“Move your operations to Denton,” Roden suggested on Facebook. “We’ve got cheap land, shovel-ready industrial sites (far away from neighborhoods to avoid your current complaints) … an emerging urban farm district ready to start farming fresh jalapenos, location at the convergence of I35E and I35W and centrally located for efficient transportation and distribution … and tons of college students seemingly willing to work for a daily supply of free Sriracha!”

Roden’s suggestion didn’t appear to gain much consideration, but the latest Texas proposal might.

“We are amazed at the [interest] we have received from other states as well as from places from right here in California,” Huy Fong Foods said in a statement to the Star-Telegram. “We appreciate the Texas delegation’s taking their time to visit us and we would welcome information regarding [a] possible relationship with the state of Texas.”

On May 12, Villalba will meet with the company along with Texas Agriculture Commissioner Todd Staples, state Rep. Hubert Vo, D-Houston, and officials from the offices of Perry and Abbott.

“I am looking forward to understanding the needs of this business,” said Vo, a real estate developer and businessman who is fluent in Vietnamese, Spanish, French and English. “I hope we can make a connection and bring jobs to our community and investment to our state.”

Huy Fong Foods, a family-owned business, has used Ventura County peppers for decades because the crops are close to the factory. The peppers must be quickly processed after they are harvested.

Villalba said that several areas in Texas might be considered for a Huy Fong Foods plant but that land in the Rio Grande Valley is likely the best for pepper growing. The factory would need to be close by, but it could end up anywhere from the Valley to San Antonio.

“Obviously, we’d like to see it in North Texas because we’d like the jobs in North Texas,” Villalba said. “But we are interested in this company for all of the state.”

‘Cautiously optimistic’

At least one local producer of spicy condiments says he thinks Huy Fong Foods wouldn’t go wrong moving here.

“I’d love to have them in Texas,” said Doug Renfro, president of Fort Worth-based Renfro Foods, maker of the Mrs. Renfro’s salsa line. “I think the more, the merrier for spicy-food producers.

“It’s such a pro-business environment and offers such a large quantity of spicy-food eaters.”

Renfro said that salsa, of course, is one of his favorite condiments but that he is a fan of Sriracha and keeps a bottle at home.

He and others say they don’t know whether the company is seriously considering a move.

Villalba said he realizes that the meeting with Tran might be a political move, giving Tran leverage to make the Irwindale City Council back away from further restrictions.

But Villalba said moving the factory to Texas would give the company a chance to grow and find even more success.

Among the benefits he touted: no personal or corporate state income taxes, the finest distribution channels, a positive business climate, and a state that appreciates and supports business owners.

Staples, who promotes the state’s agricultural products, hopes to speak with Tran about the pepper industry in Texas and how his company’s needs can be met. Officials from Perry’s and Abbott’s offices can address any legal concerns about moving the business to Texas.

“This is the beginning of the process, with preliminary decisions,” Villalba said. “I’m cautiously optimistic, but I’m a realist.”

Anna M. Tinsley, 817-390-7610 Twitter: @annatinsley

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