WEB EXCLUSIVE
Economic Developers' Perspective:
California and Plastics
Even in our changing economy, not all plastics manufacturers
are candidates for off-shoring.
By Jim Zauher
The plastics industry, like other manufacturing clusters,
has its own unique set of characteristics and requirements
in the selection process for new facilities and sites.
The industry as a whole continues to see consistent
growth in the United States.
California has traditionally been a stronghold for
plastics manufacturing, and even with the shifting
dynamics of the world economy and the practice of
off-shoring, plastics companies still thrive in the
Golden State. Not all plastics manufacturers are candidates
for off-shoring, particularly those that need direct
access to a large consumer market.
There are a number of major site selection criteria
for plastics companies, and it is helpful to understand
why successful operations of small and medium-size
firms continue to expand in mid-size city environments.
Two plastics companies from the area I promote-Shasta
County, CA-made moves from urban areas and are thriving
with growth as they take advantage of their lower
cost environment. Skyway Recreation Products is a
"world leader of American-made composite wheels"
used in the bicycle, health, and lawn and garden industries.
Newport Biosystems makes plastic sterile bags (known
as the "clean room in a bag") for storing
sterile bio-fluids that are used in the biotech and
medical device manufacturing industries.
"As a plastics manufacturing company, you have
to consider where you want to manufacture and where
you want to live," says Ken Coster, president
of Skyway.
In terms of business growth and other factors, Rod
Roberts, owner and president of Newport Biosystems,
says that the main factor in his company's site selection
process was whether it was a good decision financially.
Lifestyle, according to Roberts, was another key attraction.
Access to labor is one of the key elements companies
like Newport and Skyway consider in their search for
alternative locations. In today's competitive environment,
access to a labor supply that is abundant and productive
is at the top of every company's list.
And what about the challenge of trying to find a
skilled labor force?
"A lot of the work we do is highly mechanized,"
explained Roberts. "The workforce here in Shasta
County was skilled and readily available."
Ken Coster agrees, adding, "Labor rates are
still pretty attractive in Shasta County. It's a clean
environment up here, and plastics injection molding
is a clean manufacturing process. Shasta County is
a great place to locate and to live."
Communities seeking to attract new businesses like
plastics companies need to focus on providing "ready-to-go"
sites and facilities. In Shasta County, improved industrial
sites are well-planned and competitive. In the city
of Redding, the largest city in Upstate California
with a population of 85,000, the Airport Business
Park provides "ready-to-go" sites for less
than $2 per square foot. This project is within a
mile of Interstate 5 and is near regional shipping
facilities for FedEx, UPS, and Airborne.
"One of the advantages of our business's facility
location is being so close to a major interstate,
I-5," says Coster. "For shipping, the location
makes it really convenient-something that is very
important for plastics manufacturing companies like
us to consider in choosing a site."
Companies in urban areas often cannot consider owning
their own facility because of high land costs, which
makes lower cost areas very attractive for investment.
For example, Skyway has owned its 40,000-square-foot
facility in Shasta County since it moved from Southern
California. Newport Biosystems' USP Class VI products
are manufactured in its new 10,000-square-foot clean
room facility.
Electric utility services are another key consideration
for plastics companies. The need for competitive,
reliable electricity is important to companies in
the plastics industry. In Shasta County, two of its
cities, Redding and Shasta Lake, own their own electric
utilities. Such a favorable option can provide plastics
companies with very competitive rates, sometimes 50%
of the cost of other utilities.
These are just a few examples of how plastics manufacturers
can take advantage of lower cost environments to benefit
their profitability and growth. Companies seeking
new locations should base their search criteria on
both their business and personal needs, proven to
be successful location strategies for both Skyway
and Newport Biosystems.
Jim Zauher is president of the Economic Development
Corporation of Shasta County, in California's far
northern, or"Upstate", region.
