Wytheville rubber glove facility is on hold

After a federal financing package fell through, construction of Blue Star NBR’s medical glove plant in Wytheville has stalled.

Now, Blue Star needs $230 million to start operations, says CEO Scott Maier. “It seems silly for all of this to fall to the wayside,” he says. “We don’t want to just sit and twiddle our thumbs and wait.”

First announced in October 2021, the project broke ground in January 2022 but has since faced funding-related delays. Blue Star anticipated securing a federal loan package from the U.S. International Development Finance Corp. (DFC), an agency that President Donald Trump authorized in 2020 to use funds for two years to support domestic companies producing resources needed during the COVID-19 pandemic.

Blue Star had expected DFC financing to fund NBR and glove production facilities, Maier says, adding that agency officials told him to apply for Department of Defense funding and that DFC would cover any financial shortfall. But then, DFC’s processing of Blue Star’s loan request was delayed, and the agency asked for a revised budget. Finally, DFC’s loan-making authority expired before it finalized the loan, leaving Blue Star in a tight spot.

A U.S. Government Accountability Office study published in November 2021 reported that DFC had received 178 such loan requests, but none were given.

Maier says Blue Star considered seeking private financing, but investors have balked, given the uncertainty of the project’s completion. And the U.S. Export-Import Bank considered the project too risky to underwrite.

Maier says his next, best hope would be getting the remaining funding from the federal government’s 2024 budget, which had not passed as of early December 2023.

These possibilities, Maier says, would involve Congress or the Biden administration directing Health and Human Services to reallocate money toward the project or designating money for the project in a continuing resolution.

A Virginia Economic Development Partnership economic impact analysis estimates Blue Star’s facility would bring 2,500 jobs to Wytheville, says Garrett Murch, founder of GCM Strategies.

In May 2023, Blue Star completed construction of a 30,000-square-foot, 85-foot-tall main factory to produce raw nitrile butadiene rubber. The delayed second phase, which would take nine months, would involve commissioning that facility and starting large-scale NBR production.

Phase 2 also includes building the first glove manufacturing facility, which could begin producing gloves within two months of completion. Within 18 months, the facility could reach full production, making 2 billion to 4 billion gloves annually.

The five-year plan is to have six glove manufacturing facilities.

In November 2023, Maier met with both U.S. senators from Virginia, a discussion that U.S. Rep. Morgan Griffith (R-9th) joined via webcast.
The offices of Sens. Tim Kaine and Mark Warner and Rep. Morgan Griffith said in a statement to Virginia Business: “Upon learning of the issues with the development of the Blue Star plant in Wythe County, Sens. Kaine and Warner and Congressman Griffith teamed up in a bipartisan push to urge the Biden administration and the company to come to an agreement to get the plant on track for completion. They are disappointed that an agreement was not reached. They will continue to look for ways to work across the aisle to support domestic manufacturing and job growth in Southwest Virginia.”

“We’re still hoping the government will finish what it started,” Maier says, but if not, Blue Star will examine alternatives like retooling its facility to produce commercial-grade rubber for gaskets.