SmileDirectClub to invest $34 million, hire 600 people for new Middle Tennessee plant

After canceling a planned Texas manufacturing plant earlier this month, SmileDirectClub is bringing those jobs to Tennessee.

The Nashville-based company will invest $34 million into a new manufacturing facility in Columbia that will employ 600 people, according to a news release from the Tennessee Department of Economic and Community Development. Its not clear what, if any, state incentives the company will receive for the new facility, which is expected to be fully operational in 2021.

The announcement comes two weeks after the company nixed plans to invest $36 million to open a dental manufacturing facility south of Austin that would have created 850 jobs.

In an email to the NBJ, a SmileDirectClub spokesperson said travel restrictions related to the Covid-19 pandemic prompted the company to move the facility closer to its Nashville headquarters, so that employees could easily and safely travel between the two locations and its Antioch manufacturing facility. 

The deal brings a welcomed infusion of jobs to Middle Tennessee at a time when businesses and workers are still suffering from the economic fallout related to the pandemic. At least 133,000 fewer people were employed in June than during the same period last year, according to the Tennessee Department of Labor.

“As we continue to focus our efforts on rebooting Tennessee’s economy, it’s a positive sign when companies are able to grow and create jobs in our state. SmileDirectClub’s newest Tennessee facility and its commitment to create over 600 new jobs will provide a significant boost for Columbia and Maury County while helping our state get back on track,” Gov. Bill Lee said in the release.

SmileDirectClub (Nasdaq: SDC) is one of Middle Tennessee’s largest publicly traded health care companies, according to Nashville Business Journal research, with $750 million of revenue in 2019.

This is the third Tennessee expansion in three years for SmileDirectClub, according to the release, which announced last year it would invest $217 million to create 2,010 jobs at its downtown headquarters and Antioch manufacturing plant.

It’s been a bumpy year for the company, however, which began 2020 with layoffs at its Antioch manufacturing facility, as CEO David Katzman announced SmileDirectClub would take steps to “control our growth” after missing fourth-quarter earnings projections. 

During the company’s latest earnings call, executives said SmileDirect Club gave up "several floors" of its downtown office space as a result of “uncertainty of our operating environment” due to Covid-19.

Like most retailers, the company was forced to temporarily close more than 350 brick-and-mortar stores at the beginning of the pandemic and furlough 55% of its corporate and retail workers through May. That same month, Katzman said many of those retail locations may not reopen, as the company tries to refocus on its online business.

Still, the company has expanded its partnerships in recent months with health insurers and has begun to wholesale its clear aligners to brick-and-mortar dentistry practices, including a partnership with Smile Brands Inc. that introduces their product inside more than 450 dental practices. That shift from retail to wholesale and online sales could be key for the company's success amid the pandemic.

The new Tennessee plant will allow SmileDirectClub to “extend its manufacturing capabilities for its clear aligners in support of its continued expansion and growth while also increasing organizational resilience and introducing innovations to its supply chain.”

“SmileDirectClub is grateful for the continued support of Governor Lee, Commissioner Rolfe, Senator Hensley, Representative Cepicky and the partnership with the Tennessee Valley Authority and Maury County. In these unprecedented times, having a second facility located in Maury County allows our team the ability to safely travel between our manufacturing locations, and provides us the additional manufacturing capacity and strong talent pool we need as we continue our global expansion. We are looking forward to further expanding our presence in Tennessee,” SmileDirectClub Global Head of Supply Chain Dan Baker said in the release.