AUBURN – For former City Councilor Gerry Dennison, Wednesday’s groundbreaking on a $25 million expansion at Tambrands was particularly sweet.

“It almost closed in ’95,” said Dennison, who sat on the Auburn Council then. “So to see this today is very rewarding.”

The Auburn manufacturer of Tampax was one of four in the nation producing the tampons in 1995. But Maine’s escalating workers’ comp costs put it on the chopping block, endangering 400 jobs at the Hotel Road facility.

City officials initiated a tax increment financing district for Tambrands and approached the state about ways to roll back workers’ compensation costs and other state-backed incentives. The results were enough to keep the 58-year-old plant open and productive until it was purchased by Procter & Gamble in 1997. Since then, the facility has had more than $250 million invested and employs more than 500 people. The three other Tampax plants have closed.

Dennison, who is the regional manager for Maine Labor Market Information, said today that Tambrands is Auburn’s biggest employer and pays the highest wages.

In fact, it is among the top 10 percent in pay scale for Maine companies, said Gov. John Baldacci, who attended the groundbreaking festivities with about 40 other invited guests and staff. Wages start at $30,000 annually.

“This is a wonderful model for other manufacturers,” said Baldacci, who noted the company’s investment in training, research and development, environmental stewardship and community service. Tambrands contributes about $75 million annually to Maine’s economy in state payroll taxes and in the purchase of goods and services.

The 47,000-square-foot expansion will boost Tambrands’ production capacity by about 10 percent and provide roughly 25 new jobs. It is the sole manufacturer of Tampax products in the United States and Canada.