Friday, March 25, 2011

Increased optimism, new business priorities

Unsteady economic conditions have forced widespread reconsideration of what matters most. Individuals and families have made tough choices relating to household expenses and lifestyle. Companies have adjusted their business practices to be competitive in today’s evolving marketplace.

All operational aspects have been scrutinized as part of that process. Everything from building design to process efficiency to facility location has been considered in the interest of gaining a competitive advantage. In some cases, that means better positioning to seize market share during tough economic times. In more extreme – and unfortunately, not uncommon – instances, companies are fighting to stay in business.

Every year, Area Development magazine surveys corporate executives about their business plans. The survey delves into how current economic pressures impact priorities. The magazine concluded from its most recent survey that, “The economy’s gradual recovery during 2010 has resulted in increased business optimism, a rise in new facility plans, and some changes in site selection priorities.”

A few additional noteworthy observations from the survey:

Focus on product. Nearly three out of four new facilities will serve a manufacturing, warehouse or distribution purpose.

Job growth is modest. More than three quarters of new domestic facilities will create fewer than 100 jobs, although at 77 percent that number represents a slight improvement over last year’s 80 percent.

Get goods to market. Cost effectively. Highway accessibility traded places with labor costs as the most important factor, but both are still among the three top considerations along with tax exemptions.

Think sustainably. Sustainable development is on the rise. High numbers of executives are making energy-saving modifications to existing facilities (85 percent), recycling or reusing waste products (59 percent), changing supply and distribution methods (28 percent), and seeking LEED certification for new or existing facilities (23 percent).

Market reactivity desired. Shovel-ready or pre-certified sites, which speed the development process, were cited as important nearly half the time.

Clustering matters. Businesses generally want to locate near others involved in similar activities.

Thursday, March 17, 2011

Site selection can be a lengthy process

Selecting a location for relocation or expansion is an investment of significant time and an exercise in patience. Evaluating options requires culling large amounts of information and evaluating that data to arrive at a decision.

Most businesses consider real estate options, workforce quality and availability, training, and business climate among other factors. They weigh those factors against other communities that meet their geographic, transportation and other needs to select the best option. That process can take years of careful evaluation from start to finish.

Payoff comes when companies find the site selection sweet spot. Global Future Energy Holdings, Inc. recently announced that Spokane Valley, Wash. will become the site of its first U.S. manufacturing and distribution facility. The company began looking for a site in 2005.

Spokane Valley “stood out as an ideal location due to available sites, a strong workforce” and a partnership opportunity with another local company, Marius de Mos, the company’s president and CEO, said in a news release. GFEH, which will do business as Prestyl in Spokane Valley, met its expansion needs on multiple fronts. Those kind of synergies are what seal site selection deals.

Prestyl has developed a proprietary infrared, thin-film heating technology. The technology, common in aerospace and mass transportation applications, will be used to produce infrared heating panels that can be mounted to ceilings and walls. Ecolite Manufacturing, a Spokane Valley company that engaged Prestyl during its site search, and will be a partner in manufacturing the panels.

“This project has been exciting and unique in that it provides a multi-faceted win for our organization and the greater community – incorporating elements of business recruitment, business expansion and foreign direct investment,” said Gary Mallon, technology industry manager for Greater Spokane Incorporated, which recruited Prestyl.

Monday, March 7, 2011

Nurturing industry clusters beneficial to business

A supportive business environment is crucial to success, especially when it includes a group of like companies willing to set aside competition for the benefit of local industry. Manufacturers, as an example, benefit from clustering in an area. Grouping in a close proximity creates a critical mass and economies of scale that draw suppliers and bolster a workforce. Benefits include improved cost and quality controls.

It can also lead to leveraged marketing opportunities, as is the case in the northern Idaho and eastern Washington communities that share the Snake River and a growing boat building industry as a common link.

Six welded-aluminum jet boat manufacturers from Lewiston and Orofino, Idaho and Clarkston, Wash. have formed a joint marketing effort under the umbrella of the Snake River Boat Builders Export Program. The idea is to use their collective resources to draw global attention to their capabilities and products and develop viable foreign markets. And, of course, drive sales.

The group recently participated in the 42nd boot Dusseldorf, dubbed the “world’s biggest water sports show.” The show provided hands-on training for the boat manufacturers, contacts with potential buyers, a chance to see new ideas and technologies, and global industry perspective.

It was the return engagement to a European trade mission delegation that visited the Snake River Boat Builders last year. The group toured factories, tested boats and became the focus of the first annual Snake River Boat Expo.

Tuesday, March 1, 2011

Companies turning to programs that support business growth

Access to business incubators and other resources that support business development is an important consideration for any company. Such organizations and programs are valuable sources of grant money, knowledge, low-cost space and other benefits.

In the case of grant funding, the money can be used to jump start production that leads to increased revenues and creates jobs. The Sirti Foundation, which helps business-assistance agency Sirti to accelerate growth of technology-based companies in the Inland Northwest, is one such example. The privately funded tax-exempt entity recently awarded $1.5 million from its Energy Innovation Fund to:

Demand Energy, which is developing distributed electricity storage devices and network management software
• Great Northern Spokane for a geothermal heat pump demonstration project
• Greenwood Clean Energy in support of enhancing EPA-approved biomass boiler manufacturing
• NuElement, Inc., a company commercializing bio-aviation, fuel battery extender auxiliary power unit
• WISErg Corporation, which is using an anaerobic digester to derive bioresources from municipal organic compostable materials

Sirti, an agency of the state of Washington, is a collaboration of business, higher education and government to accelerate the development and growth of technology-based companies in the Inland Northwest.