Staff Photo by Tim Barber Zan Guerry, center, chairman and chief executive of Chattem, stands with Hamilton County Mayor Claude Ramsey, left, and Tom Ed Wilson, president of the Chattanooga Area Chamber of Commerce following groundbreaking ceremonies for a $35 million expansion on South Broad Street.

About 5 million gallons of ACT mouthwash will flow through Chattem's planned manufacturing facility each year, and the product's spokesman will be a yellow sponge with funny pants.

Zan Guerry, chairman and chief executive of Chattem, announced Thursday at a groundbreaking ceremony that the $35 million expansion is expected to be complete in October 2010.

The company then will move the lion's share of its ACT mouthwash manufacturing operation into the 85,000 square-foot facility located behind its existing plant at 3350 Broad Street.

The new facility will created about 70 full-time jobs.

"There will be a lot of people hired immediately when it becomes operational," Mr. Guerry said.

The 70 new positions are in addition to a previously announced investment that created 33 new jobs, of which 30 already have been filled.

Mr. Guerry also announced that SpongeBob SquarePants, a cartoon favorite among kids of all ages, will become the new spokesman of the oral health product that has seen sales doubled since Chattem bought the product three years ago.

"When we acquired ACT in 2006, it was running about $40 million," Mr. Guerry said. "This year it will be about $80 million."

Tom Edd Wilson, president of the Chattanooga Area Chamber of Commerce, said successful growth is about growing existing companies as much as it is about recruiting new ones.

"Chattem is one of our old legacy companies that is still headquartered in Chattanooga," Mr. Wilson said. "It is a huge victory for Chattem and a huge victory for Chattanooga."

Mr. Guerry said the physical building will cost about $11 million and will house about $24 million worth of equipment. The expansion will increase Chattem's manufacturing space by more than 50 percent, he said.

Bob Bosworth, Chattem's president and chief operating officer, said it is the first time Chattem has built a facility from the ground up. All previous projects have involved existing structures.

"This is really a crowning moment of sorts for Chattem," Mr. Bosworth said.

Manufacturing the product locally will improve efficiency, save money and allow Chattem to be more responsive to retailers, he said.

ACT was one of five products Chattem acquired from Johnson & Johnson for $410 million. Other product included in the acquisition include Unisom, Cortizone, Kaopectate and Balmex.

Hamilton County Mayor Claude Ramsey praised the expansion and Chattem's success.

"It's another good day for a home-grown company," he said. "We want our companies to grow, and profits are what make it happen. If you are not making a profit, you are not going to be building new buildings."