$714M Wythe medical glove plant is solo venture now

Developers broke ground in January on the $714 million medical glove manufacturing complex planned for Wythe County’s Progress Park. Only now it may be a solo project, not a joint venture.

In October 2021, then-Virginia Gov. Ralph Northam announced that Alexandria-based Blue Star NBR LLC was building manufacturing facilities to make nitrile butadiene rubber (NBR) and billions of nitrile medical gloves in a joint venture with Delaware-based American Glove Innovations Inc. (AGI) that would create about 2,500 jobs by 2028. Northam billed the venture as “the largest job creation commitment Southwest Virginia has seen in a generation.”

But the joint venture may have fallen through, as Blue Star backed out of the partnership with AGI in January during the due diligence phase, according to Blue Star NBR CEO Scott Maier. “It’s just business,” Maier explained.

Blue Star is moving ahead with the project on its own, Maier said, and the decision to exit the joint venture will not impact the amount of the planned investment or the number of jobs previously announced. “They weren’t bringing any capital,” he said of AGI.

However, AGI spokesperson Deborah Brown, a partner with global law firm Quinn Emanuel Urquhart & Sullivan LLP, said the situation isn’t so cut and dry. “AGI is at least a 50% equity owner in [the project] and does not agree that it has departed or split from the venture,” Brown said in a statement. “AGI is committed to seeing the project through.”

Brown also took issue with Maier’s characterization, saying, “AGI brought substantial capital to the deal and has invested funds into the venture.”

Blue Star executives decided not to move forward with the partnership after learning of litigation involving Marc Jason, who was previously named co-CEO of the Blue Star-AGI joint venture.

Jason is CEO of London Luxury LLC, which filed a Jan. 5 lawsuit in New York State Supreme Court against Walmart Inc., charging that Walmart owes the company about $41 million for boxes of nitrile gloves produced in Malaysia and Thailand. The complaint goes on to state that London Luxury could lose more than $500 million on a deal to sell tens of millions of boxes of gloves to the retail behemoth.

“Walmart has created uncertainty regarding whether it intends to accept and pay for the vast majority of gloves it committed to buy,” the lawsuit claims.

In an emailed statement, a spokesperson for Walmart said the company has filed a counterclaim against London Luxury “for their repeated failure to meet product standards and delivery obligations.”

London Luxury did not immediately respond to requests for comment.

AGI touted the Walmart deal as part of the joint venture and the litigation spooked Blue Star. “They were bringing a purchase agreement from a large Fortune 500 company [to the table] and now that contract is in litigation,” Maier explained. “So, we kind of said, ‘You know what? When things settle down, maybe we can talk again.’”

However, Brown said that “AGI disagrees that an ongoing litigation serves as a legitimate basis for any change to the [Blue Star- AGI] venture.”

The fact that AGI may be out of the project doesn’t strike David Manley, executive director of the Wythe County Joint Industrial Development Authority, as particularly newsworthy.

“We’ve been working closely with … the Blue Star leadership since May,” Manley said. “We don’t anticipate any impact to the timeline or success of the project. The project is moving forward as expected.”

A spokesperson for the Virginia Economic Development Partnership said the state “is aware of Blue Star’s separation from AGI.”

“We do not anticipate any impact on the project timeline and outcome,” said Suzanne Clark, VEDP’s managing director of communications, marketing and communications.

Visitors traveling to Blue Star’s site at Progress Park this month will likely spot some heavy machinery. “We’re moving dirt,” Maier says. “It’s still on track to have that initial NBR plant open at the end of August.”

Blue Star’s nitrile butadiene rubber manufacturing facility will be followed by six planned nitrile glove manufacturing plants, the first of which is scheduled to open by March 2023, with five more glove factories opening between 2023 and early 2028. When it’s operating at full capacity, Blue Star NBR plans to manufacture 20 billion nitrile gloves per year — roughly 18% of the nation’s current supply.

On Feb. 4, the Virginia House of Delegates overwhelmingly approved legislation to fund up to $4.6 million for VEDP to provide recruitment and training of employees for Blue Star operations in Wythe County.