Economic Development – Top Economic Coups of 2014

Area Development magazine’s Top States for Doing Business in 2014 ranks Alabama No. 4 nationwide, thanks to its favorable business environment, labor climate, infrastructure and global access. Such a high ranking is no surprise, considering 2014 was a banner year for economic development announcements in Alabama. 

In this roundup article, we take the beginning of a year as an opportunity to remind ourselves of the largest projects announced or nearing completion in 2014. 

The Alabama Department of Commerce’s annual assessment of the new and expanding industry announcements of 2014 was not completed before our press time, but 2014 Commerce Secretary Greg Canfield confirms it was another banner year.

According to Canfield, from 2011 to 2013, economic development efforts in Alabama have resulted in more than 55, 000 announced jobs and nearly $14 billion in capital investment. 

“To put that into context, the three years prior to that, 2008 to 2010, brought 47, 000 announced jobs and $8.6 billion in investment to Alabama. In 2013, companies announced nearly 17, 000 jobs and $4.4 billion in investment in Alabama, touching nearly every corner of the state.”

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From the world’s largest aerospace company and the world’s top-selling automaker to a company whose name is synonymous with firearms, businesses across sectors are setting up shop in Alabama or expanding their existing facilities.

Huntsville has attracted major industries ever since the U.S. Army chose what was then a small agrarian town for its chemical munitions facilities at the start of World War II. Toyota found the Rocket City to be such a good fit that it has expanded there not once but five times, notes Harrison Diamond, business relations officer for the city of Huntsville. 

Toyota Motor Manufacturing Alabama invested $150 million to increase capacity to produce its V-6 engine, at its plant in Huntsville.  The expansion is creating 125 new jobs, bringing the total full-time employment at the plant to 1, 150. Construction began June 2013, with production starting January 2014. Full production is expected by July 2015. The project brings Toyota’s total investment in Alabama to $850 million. The Huntsville plant is Toyota’s only facility in the world producing four-cylinder, V-6 and V-8 engines in a single facility.

Science and Engineering Services — a Columbia, Maryland-based leader in maintenance repair and overhaul services for aircraft and ground combat systems — is also expanding in Huntsville.  The $70 million expansion will create 450 jobs over five years. 

Construction began in July 2014, which includes new hangar bays, office space and helipad. Once the expansion is complete, SES will occupy more than 1.3 million square feet of hangar space. Production begins in 2015 and full production is estimated within 10 years. 

Diamond says of SES, “Having the whole package of research, design, engineering, systems integration and manufacturing all in one community speaks volumes about the diversity of our workforce.”

Gov. Robert Bentley and Remington Outdoor Co. Chairman and CEO George Kollitides announced Remington’s plans for a 2, 000-job plant in Huntsville. 

Remington Outdoor Co., the nation’s oldest firearms manufacturer, has established a new production site in Huntsville, which it chose over 24 other potential locations. Production is expected to begin in 2015 and full production within the next 20 years. 

“Remington is one of our most exciting announcements in some time, ” Diamond says. “They are converting a former Chrysler electronics plant into what some are calling the Google of Guns. It’s going to be a marquee employer for the area.”

Canfield calls Remington’s decision to open a manufacturing plant in Alabama a “game changer” and says the project will create more than 2, 000 jobs within the next 10 years as production increases.

Boeing announced a new Research and Technology Center in Huntsville.

Boeing — the largest aerospace company in Alabama and one of the state’s largest employers — has maintained operations in Huntsville for decades. At the end of 2014, Boeing announced it would create Research and Technology Centers in five cities where it is already doing business, including Huntsville. 

Boeing’s 7, 000-square-foot research lab in Huntsville will focus on simulation and decision analytics. Construction began in December 2014 and is expected to be complete in mid-2015. Boeing is investing $5 million to $6 million in the project, which will create 300 to 400 new jobs. These new centers are part of Boeing’s plan to reorganize its research and technology division. 

Oxford Pharmaceuticals would have given Huntsville another significant economic development announcement in 2014 if Birmingham hadn’t beat it out. Both Alabama cities, as well as nearby Nashville, were vying for the Oxford, England-based startup, which chose to invest $29.4 million to establish its U.S. headquarters in a 120, 000-square-foot manufacturing facility in Birmingham. The startup will create 60 jobs when it opens in 2016 and employ up to 200 people when fully operational within 10 years. 

Oxford’s manufacturing facility, which will produce generic drugs, is expected to be complete by late 2016. Full production is estimated to begin by 2019. Local and state incentives total $6.7 million and include infrastructure improvements and tax rebates.

The Birmingham incubation facility Innovation Depot is letting Oxford operate rent-free until it’s on its feet as part of the Business Incubator Association’s Soft Landings program, which assists international companies entering or expanding into the U.S. market. 

Engineered Plastic Components was another win for the Birmingham region. The company announced plans for a $7.3 million investment to open a manufacturing plant in Leeds with 110 new jobs by its third year. The Grinnell, Iowa-based company purchased a 75, 000-square-foot building in the Birmingham suburb, where the company will produce injection molded interior automotive components and assemblies. 

Construction began in April 2014 and is expected to be complete by the first quarter of 2015, when production will begin. Full production is slated for fall 2017. The state offered $819, 000 worth of pre-employment training support through AIDT. Local contributions total approximately $157, 000.

Birmingham Mayor William Bell and Gov. Bentley welcome Steris Corp. to Birmingham.

Steris Corp., based in Mentor, Ohio is adding  100 new high-paying jobs to its workforce after purchasing in April 2014 the Birmingham-based Integrated Medical Systems, a surgical instrument management and clinical consulting firm, in a deal totaling $175 million. 

IMS will be incorporated into Steris’ health care division, making Birmingham headquarters for its specialty service business. Steris is a leading infection prevention, decontamination, and surgical and critical care company serving customers in more than 60 countries. 

An $8 million renovation is under way to convert the former U.S. Pipe headquarters in Birmingham’s Sloss Business District to serve as the center of operations for this division. The renovation is estimated to finish in 2016. Full production is slated for 2018. 

State incentives total $2 million and include $500, 000 in discretionary incentives, $500, 000 in credits and nearly $1 million to train workers through AIDT. Local incentives from Birmingham and Jefferson County total $1.5 million, mostly in tax abatements from the city of Birmingham. Steris also operates a surgical equipment business in Montgomery. 

Gov. Bentley welcomes Evonik’s announcement of an R&D center in Birmingham.

Evonik Corp. announced plans to open its first Innovation Center for research and development of medical devices and technology at the company’s Birmingham site. Alabama ranks fifth in the nation for medical technology job creation, and this expansion is expected to add 25 high-paying jobs to Evonik’s 100 employees. 

The German-based company selected Birmingham because of the company’s existing presence, Birmingham’s experienced employee pool and nearby educational institutions. 

Montgomery Coca-Cola Bottling Co. announced in December 2014 that it will make a $35 million capital investment to increase production at its Montgomery plant and add 37 new jobs to the 247 jobs existing at the location.

In November 2014, Montgomery Coca-Cola Bottling Co. began operations as a division of the Birmingham-based Coca-Cola United, which was founded in 1902 and is the third largest Coca-Cola bottling company in the United States. 

Coca-Cola United purchased an 850, 000-square-foot building and in September 2014 began renovations. Construction is ongoing and scheduled to be complete in February 2015. Full production at the plant is expected by October 2015. 

Knauf Insulation invests $30 million to reopen its plant in Lanett.

Knauf Insulation has restarted its operations in Lanett, where it manufactures thermal and acoustical insulation. The company closed its doors in Lanett in 2011, leaving 146 people without jobs. 

Valerie Gray, executive director of the Chambers County Development Authority, says the shutdown was due primarily to the recession and housing crisis. In November 2014, Knauf announced it will invest $30 million to reopen the Lanett plant and provide 100 jobs. Production is under way and the plant should be fully operational by December 2016. Construction began in June 2014 and is scheduled to finish December 2016. 

Gray says the county never lost contact with Knauf after it left Lanett, which was critical in the recruitment process. State incentives include nearly $15 million in ad valorem taxes and about $1.6 million in abated state and local sales and use taxes. Local job creation incentives total $135, 000. 

KMIN USA made for another coup in Chambers County, investing $20 million to open its first U.S. plant, in Valley, where parts for automobile seats and ancillary parts are manufactured and assembled. The South Korea-based auto parts maker renovated an existing building and production began December 2014. Full production is expected by April 30, 2015. 

Total state incentives include $417, 000 in ad valorem taxes and $539, 000 in abated state and local sales and use taxes. Local incentives are less than $50, 000. Gray says the project brings jobs to an area devastated by textile industry loss.

Reliance Worldwide, a leading maker of products for the plumbing and heating industries, announced in September 2014 plans to open a manufacturing plant in Cullman to produce its innovative SharkBite plumbing connection system. 

The Atlanta-based Reliance Worldwide, operating in Cullman as Cash Acme, is investing $50.8 million in its Alabama facility, which also includes a research and development center, along with a training academy. The expansion will create 130 new jobs, bringing total employment to 275. 

Construction began November 2014 and is expected to be complete by June 2019. Production begins the fourth quarter of 2015. The expansion brings the company’s “Cullman footprint” to more than 600, 000 square feet, says Dale Greer, assistant director of the Cullman Economic Development Agency.

Reliance Worldwide received statutory ad valorem tax abatement of non-education taxes for 10 years and the one-time abatement of non-education sales tax for equipping the new facility. The state provided $1.1 million in discretionary funds and AIDT offered training assistance, which Greer says was key to Reliance making the decision to expand in Cullman. 

Asahi Kasei Plastics North America breaks the news of its $30 million investment in Limestone County, its second U.S. production plant.

Asahi Kasei Plastics North America is investing $30 million to open, in Limestone County, its second U.S. production plant. The company plans to employ up to 100 people at the Athens plant when at full capacity in seven to 10 years. The plant will process plastic resin into pellet product used at plastic injection molding facilities. 

Construction began last month and is expected to be complete in December 2015. Production begins in January 2016 and full production by December 2016. AIDT provided $940, 000 for workforce recruitment and training. 

The Alabama Department of Economic and Community Affairs provided a $250, 000 grant for railroad construction. The Alabama Industrial Access Road and Bridge Corp. provided $575, 000 to extend the access road. Local incentives include about $1.5 million for utilities and railroad infrastructure. 

“Athens really fit the bill logistically, ” says Tom Hill, president of the Limestone County Economic Development Association. “It’s a convenient and cost-effective location.” 

International Automotive Components announced in 2014 plans for a $22 million expansion at its McClellan site that it purchased in 2010, adding 359 more jobs and 125, 000 square feet of new production space. The plant, which now makes door panels for Nissan and components for Honda minivans and Mercedes SUVs, is expected to become fully operational in 2016.

Robin Scott, executive director of the McClellan Development Authority, says the expansion was on a “fast track” and the company had opportunities to expand in other locations.

Georgia-Pacific — a major producer of building and paper products — is investing $375 million in its Brewton plant, which produces linerboard and cartonboard used in making boxes. The project involves modernizing the mill’s recovery boiler system. Canfield says that while the project doesn’t create new jobs, it will secure the existing 450 jobs at the mill. 

Construction started in July 2014 and is expected to be complete in 2016. The Georgia-Pacific Brewton LLC tax abatement was granted for $347.7 million for the energy improvement project. During peak construction about 600 workers will be at the site, which Marshall Rogers, executive director of the Escambia County Industrial Development Authority, expects to have a multiplier effect on the area and boost the overall economy.

FreightCar America is investing $10 million to expand railcar production at its Cherokee plant. The Chicago-based company says it plans to create an additional production line at the Cherokee site, enabling it to meet a growing demand for its new railcars.

When the new line is at full capacity the second quarter of 2015, the facility will build 6, 000 to 8, 000 railcars annually. About 500 workers are currently employed at the Cherokee plant, with an additional 150 to 200 workers expected when the plant is in full operation. 

Baxter International breaks ground on a $300 million expansion in Opelika.

Baxter International is investing nearly $300 million to expand its plant in Opelika in Lee County, where the healthcare giant produces dialyzers, an important component in the treatment of advanced kidney disease. 

The 230, 000-square-foot expansion will add 200 new jobs, along with several new production lines. The Opelika plant currently has 170 employees, and plans additional hiring when the expansion begins in 2016. Baxter broke ground on the expansion project October 2014 and full production is expected when the project is complete in 2018. 

Opelika Economic Development Director Lori Huguley calls an expansion of an existing industry “the best kind of news.”  Being an internationally recognized company in the biologic and pharma sectors, Baxter’s confidence in Opelika’s ability to support such an expansion could attract other companies in these sectors.

GE Aviation decided to launch a 3-D printing initiative at its Auburn plant for another major expansion in Lee County. The global leader in jet engine and aircraft system production will invest $125 million upon completion of this expansion and plans to hire 300 when the plant is fully operational later this decade. Local incentives total $445, 000.

Equipment installation began in late 2014. By late 2015, the plant will have up to 10 printing machines operating with the potential to add 50 more. The Auburn site will also continue to manufacture precision, super-alloy machined parts for jet engines.

“This expansion is bringing a new technology to the existing 300, 000-square-foot plant, ” says Auburn Economic Development Director Phillip Dunlap. “This is the first high volume additive manufacturing production facility of its kind in the jet propulsion industry.”

Attracting new businesses and keeping old ones is a top priority in Alabama, where departments on the state and local level are created to do just that. 

“Our efforts paid off in 2014, ” Canfield says, “as companies across many industries picked Alabama for new facilities or expansion projects, creating jobs and opportunities for the state’s residents.”

Jessica Armstrong is a freelance writer for Business Alabama. She lives in Auburn.

Text by Jessica Armstrong

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