Cardinal News: Then & Now takes a look back at the stories we brought you over the last 12 months. Through the end of the year, we’ll share updates on some of the people and issues that made news in 2023.
Efforts remain underway to start up factories in Wythe County to make medical rubber gloves and their raw material, a project that was first announced in late 2021 with the expectation of bringing 2,500 jobs to the county but which has since stalled due to a lack of funding.
Further developments since Cardinal News first reported on the project’s financial challenges in August reveal that a number of manufacturers of personal protective equipment are in a similar situation as Blue Star NBR, the company behind the project.
Blue Star NBR — the “NBR” stands for nitrile butadiene rubber — used $123 million in federal funding to build a factory capable of producing 90,000 tons of rubber annually to make gloves such as those commonly seen in hospitals and doctors’ offices. The company needs about $230 million to build a second factory, staff both plants and start making billions of gloves each year, CEO Scott Maier has said.
Blue Star had expected to use a pandemic-related federal loan package to finish the task, but the deal never closed and progress on the factory project came to a halt. Now, Maier hopes to convince lawmakers to include Blue Star in the federal budget, most likely using money from the U.S. Department of Health and Human Services.
“We’re continuing our lobbying efforts to raise awareness in Congress as to what the issue is,” Maier said. “I think what we found was most of the members we talked to, both in the Senate and in the House [of Representatives], weren’t aware that the entire effort had stalled, and it wasn’t just our company but this is an industrywide problem.”
In September, Maier and 17 other executives of medical-supply companies signed an open letter lamenting that the federal government “abandoned” its pandemic-era commitment to boosting the domestic manufacturing of gloves, gowns, masks and other PPE.
The letter was shared with congressional and White House staff and entered into the congressional record during a U.S. House Committee on Energy and Commerce hearing on domestic manufacturing, China and supply chains.
“While the U.S. Government made a roughly $1 billion down payment to bolster domestic PPE manufacturing capacity during the height of the COVID-19 pandemic, the effort has stalled and this initial investment has been put in jeopardy,” the letter stated.
Lacking a reliable supply of PPE could harm public health, the letter stated.
Furthermore, the letter stated, boosting domestic PPE supply is critical because of China’s “unfair business practices” — an allusion to accusations that Chinese companies sell gloves at artificially low prices to increase market share — while Malaysia, another major source of medical PPE, has a “historic used of forced labor” that has caused supply chain disruptions due to rules prohibiting imports made with such labor.
The letter urged Congress and the U.S. executive branch to “complete the job they started” and fully fund the various domestic PPE manufacturing projects.
“Lives should not be put at risk due to a failure to complete this worthy mission,” the letter stated.
Maier said in an interview that with the U.S. so dependent on imported PPE, it wouldn’t even take another global pandemic to threaten the supply.
“All it needs to be is a supply chain disruption where you can’t get boats from the Far East to here,” Maier said.
In August, Cardinal News reached out to the offices of U.S. Sen. Mark Warner, D-Virginia; U.S. Sen. Tim Kaine, D-Virginia; and U.S. Rep. Morgan Griffith, R-Salem, about the Blue Star project.
At that time, the three lawmakers said in a joint statement that they had teamed up to urge the Biden administration and Blue Star to come to an agreement to get the plant on track and were “disappointed that an agreement was not reached.”
This month, a Kaine spokesperson said that there was nothing new to share.
David Manley, executive director of the Joint Industrial Development Authority of Wythe County, said he feels there is “an increasing momentum to finding a workable solution for this, and we remain optimistic.”
“There is a concerted effort being made by Blue Star and various industry partners to work with the federal government to come up with a solution that will not only kick this production into gear but make us more resilient as a nation,” Manley said.
Maier also said he is optimistic that a solution will be found.
“Every person we talk to is like, ‘Oh, we thought [Health and Human Services] took care of this a couple years ago,’” Maier said. “Well, it started, but unfortunately it stalled, and we need some sort of help to get it un-stalled.”
Blue Star has looked into private investment, but it presents a chicken-and-egg problem: Private investors won’t buy in until there’s sufficient demand for the raw rubber, but there won’t be sufficient demand until Blue Star’s own glove-making factory gets going, Maier said.
Meanwhile, the one Blue Star NBR factory that has been constructed sits idle in Wythe County. The chemicals that were there have been put in storage.
“We only brought in a small amount to operate the pilot plant when we were proving out that the NBR formula works. We’ve taken all the chemicals offsite and it’s just the equipment that’s sitting there,” Maier said.
Blue Star has spent $3 million to $4 million in preventative maintenance and upkeep on the plant and its equipment, including about $250,000 last month to winterize the facility, Maier said.
“We’ve likened it to, you can’t just let a car sit in a garage and not do anything to it and expect it to start right up 18, 24 months later,” he said.
This isn’t what company executives and government officials anticipated when the Blue Star project was announced to great fanfare in late 2021 and then-Gov. Ralph Northam called it “transformational for all of Southwest Virginia.”
Along with the jobs announcement came the news that Virginia had committed $8.5 million to upgrade water and sewer infrastructure at Wythe County’s Progress Park, where the factory complex is located.
Transformational or not, a basic rule of business is that if expenses keep exceeding revenue, something’s eventually got to give — and Blue Star is no exception.
“It’s going to be up to our partners to decide how long we want to keep putting in money to keep this going,” Maier said. “We’re hopeful that the government will fix itself and fix the situation. But we can’t do it forever.”
