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Without fanfare, Smead Manufacturing Co., of Hastings, Minn., has started construction of a manufacturing plant 1 1/2 miles west of Cedar City.

Michael Dolan, executive vice president and chief operating officer, said the $12.5 million, 312,000-square-foot facility will be completed in March 1997. At that time 225 people will be employed. The company manufactures office products such as office filing systems, hanging folders, classification folders and expanding files.Dolan said the 90-year-old company decided to close its Pico Rivera, Calif., plant because the site was unacceptable for expansion. The company has been looking for sites since September 1995 and selected Cedar City because of its proximity to the West Coast and other markets.

Most of the people hired will be from Cedar City, although some skilled maintenance technicians and management personnel will be transferred from the Pico Rivera plant to get the work at the new plant started. He anticipates an annual payroll of $4 million.

Some equipment for the new plant will be transferred from Pico Rivera and other plants owned by Smead, but Smead will also buy some new equipment, Dolan said.

Butler Construction Co., Kansas City, Mo., is the general contractor for the building, but much of the subcontractor work will come from local companies, he said. The exterior of the building will be concrete panels, and the interior will have large steel beams holding up a pitched roof. There will be a wall between the manufacturing portion and the offices.

In order for Smead to complete its move to Cedar City, Dolan said the company had to negotiate with two landowners for the purchase of the 80 acres in Cedar City's growing industrial area west of town.

Even though company officials knew there would be some problems on the acreage because of Utah prairie dog habitat, the company overcame those obstacles and determined Cedar City was the best location possible.

Dolan said Smead received a permit from the U.S. Fish and Wildlife Service to move the prairie dogs from the land and also received tremendous cooperation from the Utah Division of Wildlife Resources, Iron County, Utah Division of Business and Economic Development officials and city officials to make the move a reality.

Smead received some minor incentives in the form of tax relief to cover some infrastructure problems such as road access and sewer hookups.

In the coming months, Dolan said, some of Smead's equipment will be brought to Cedar City so new employees can be trained. Smead might have to lease some unused space in a surrounding company for that purpose, but nothing has been signed yet, he said.

Manufacturing associates will be paid $6.50-$6.75 per hour; materials associates, $7-$7.70 per hour; and production associates $7.50-$9 per hour. Supervisors will get more, Dolan said.

Smead was started in 1906 by Charles Smead, but he died in 1909. Ebba Hoffman started running the company in 1955 when her husband died, and she still is active in the firm along with her daughter, Sharon Hoffman Avent. The company has 2,400 employees and last year did $235 million in business.