TRAVERSE CITY, MICH. (June 21, 3 p.m. ET) -- After snagging a coveted state contract, Grand Traverse Industries is expanding its plastic bag converting operation.

The nonprofit corporation, based in Traverse City, Mich., provides employment and training to people with disabilities. It was recently awarded a five-year, nearly $4 million contract to manufacture trash can liners for the state of Michigan.

To accommodate the project, GTI relocated its bag-making operations to a 22,500 square-foot facility in Traverse City and added an additional perforated roll-bag machine. The company also plans to hire 15-20 new employees for the plastics plant.

GTI currently has 25 employees in its plastic bag division.

The new plant will now operate two shifts on each of its three machine lines, said CEO Steve Perdue in a recent telephone interview.

The new state contract is for 12 varieties of polyethylene trash can liners and has a value of $775,000 annually.

In 2010, the company won a three-year, $99,000 contract to supply the Michigan Department of Transportation with five different varieties of polyethylene bags for its Adopt-a-Highway program.

GTI also manufactures bags for area hospitals, colleges and resorts, Perdue said.

Prior to the expansion, GTI split its bag production between two locations — a smaller GTI plant and a plant operated by Plascon Group.

Plascon, a plastics packaging manufacturer also located in Traverse City, will continue to supply the non-profit with polyethylene and biodegradable films. The partnership is part of Plascon’s turnkey Work Programs division – the company provides equipment, installation, training, and raw materials for programs that provide employment to people with disabilities and to work programs in correctional institutions.

Plascon was instrumental in helping GTI land its state contracts, Perdue said.

GTI competed against larger companies, including out-of-state manufacturers. Perdue asked Plascon to provide film at the lowest possible cost, and Plascon agreed.

“For Plascon to partner with a business like ours and to say it’s also their mission to create jobs for people with disabilities is very unique,” he said. “They don’t just make bags to make money; they make film to make jobs for people with disabilities.”

In addition to plastic bag manufacturing, GTI provides employment and training in several industries -- industrial packaging and assembly, janitorial services, vending services, hospitality and housekeeping services, and sign-language interpretation.

GTI has more than 200 clients/workers at locations in Traverse City, Petoskey, and Mancelona, Mich.