March, 2008 Archives
Apparently the emerging ethanol industry is wreaking havoc on the chicken industry. So, you might ask: what does an alternative energy fuel source have to do with chickens? The answer is *insert drum roll here* … a lot … so much so that the world’s largest poultry processor, Pilgrim’s Pride Corp., is blaming the ethanol industry and recently passed legislation supporting it for what the company’s president and CEO proclaims is a “crisis” in the chicken industry. And this “crisis” translates to a just-announced 1,100 jobs cut and several facility closings for Pilgrim’s Pride. (See the list at the end of the blog post.*) So, the question still remains: What does an alternative energy fuel source have to do with chickens? Well … it just so happens that the major ingredient in chicken feed (and one of the largest overall expenses in producing and delivering chicken products to consumers) is corn. And corn happens to be the main ingredient in (you guessed it) corn-based ethanol (I think the name gives it away here). Recent federal incentives for corn-based ethanol production have caused the price of chicken-feed to soar. Based on current commodity futures markets, the Pilgrim’s Pride total costs for corn and soybean meal to feed all their chickens in fiscal 2008 would be more than $1.3 billion higher than what they were two years ago, according to the company. “Our company and industry are struggling to cope with unprecedented increases in feed-ingredient costs this year due largely to the U.S. government’s ill-advised policy of providing generous federal subsidies to corn-based ethanol blenders,” Chief Executive Officer J.Clint Rivers said in a press release. This matter over the effects of the ethanol industry’s need for corn on the chicken industry has been a concern for a few years now, and seems to have hit critical mass with the Pilgrim’s Pride closings. Matthew Herman, manager of a Tyson Foods chicken production and processing complex in Monroe, NC testified before a House Agriculture Subcommittee at the beginning of last year that demand from ethanol producers has doubled the cost of corn and driven up by 40% the feed cost of the chicken industry alone. He also noted at this hearing that the livestock and poultry industries normally purchase more than half of the corn produced in the country to make feed for their animals. However, the rapidly expanding ethanol industry consumed more than two billion bushels of corn (18% of production) in 2006 and will take as much as 3.5 billion bushels in […]
A couple days ago, the Pentagon announced that EADS won a $36 billion ($100 billion growth potential) contract to build U.S. Air Force refueling tankers in Mobile, AL, ending a more than two-year bidding battle. But the real controversy, which raises issues of nationalism, globalization, homeland security, etc., is just beginning. Let me get you up to speed. Business Facilities began covering this story at its inception back in 2005, when French-owned EADS, primary shareholder of Airbus, selected Mobile over 70 other sites in 32 states to locate its airfield engineering center. In 2007, this facility opened as scheduled at the Brookley Field Industrial Complex. But at the same time back in 2005, EADS began its bid to win the air force tanker contract. Its main competition: Chicago-based Boeing, the company that had supplied the refueling tankers for 50 years, but which came under scrutiny in 2002 and 2003 when shady and illegal business discussions between Boeing CFO Mike Sears and Air Force procurement official Darleen Druyun sent them both to prison. In May 2005, the House of Representatives requested that the Pentagon deny military contracts to foreign companies receiving government subsidies in a World Trade Organization member company. This was seen as a fairly blatant attempt to knock EADS out of consideration, but EADS sidestepped this by partnering on the deal with U.S. company Northrup Grumman. Fast forward to this month when EADS was awarded the contract, much to the surprise of most industry analysts, and to the outrage of numerous politicians who claim that while 1,000 jobs will be created in Alabama, more would have been created nationally if Boeing won. Disgruntled lawmakers, some of whom are lobbying for the decision to be overturned, assert that 85% of Boeing’s planes would have been built on U.S. soil, while only 58% of EADS will be made in the U.S., as main manufacturing work will be done in Europe and only final assembly completed in Alabama. House Speaker Nancy Pelosi cites a threat to homeland security as a reason for not wanting a foreign company building U.S. military equipment, while other politicians have acted particularly childish, calling the EADS product “crap” and Northrup Grumman “a front for the French.” The ubiquitous presidential candidates had their say, too, with Democratic delegate-leader Barack Obama, who shares his home state of Illinois with Boeing, perhaps showing his bias while expressing displeasure with the Pentagon’s decision. Hillary Clinton used the opportunity, more than anything, to blast the Bush administration (Pentagon), which is typical campaign […]
Saw this article in The New York Times today; it’s about how New Jersey’s brownfield redevelopment incentives didn’t do much during the 1990s, but now that there’s hardly any greenfield space left in the state, developers are giving them a shot. I think it’s kind of unfortunate that the easiest way for a developer to earn back their 75% of cleanup cost is by putting retail on the site. I live in New Jersey, and let me tell you, we have enough retail. Can’t they change the way the money is generated to give a boost to industrial or high-tech office work development? Companies that build a factory or research center on a brownfield site should be able to get their three-quarters cleanup reimbursement faster, not slower, than a speculative developer building yet another strip mall. Oh, and I should say (in defense of the Garden State) that when I wrote that there’s no greenfield space left to develop on, that’s not because we have no green space at all–it’s just that so much of the prime stuff has been protected by law (hurray). As the most densely populated state in the country (“New Jersey’s density is currently 1,165 people per square mile—denser than both India (at 914) and Japan (835). No other state even comes close.” – NY Times), we could be at the forefront of what development along the Bos-Wash corridor is going to look like soon.
Everyone knows about wind turbines and how they are increasingly popping up around the world as another enviro-friendly way to create energy. But did you know that scientists are currently developing and testing a new turbine that you will never see, but that can create limitless, constant energy? That is because the turbine will be bound to the ocean floor with its blades whirling about 40 feet below the surface. Scientists are developing these underwater turbines with the goal to harness the energy of the Gulf Stream current off the Floridian coast. You can read specifics of this interesting concept here. The article tackles questions like, “Won’t fish get chopped up?” and “Will large ships be able to navigate around them?” These are legitimate questions that need real answers before underwater turbines can become a justifiable plan, but tapping into ocean currents could become a key component in acquiring sustainable energy on a planet with dwindling natural resources.
Every year, more locations promote themselves as hot spots for biotechnology. Do any of them have the potential to become the next San Diego or Boston? Business Facilities has uncovered a few areas showing promise.
While there are many factors that impact the financial structure of a relocation/expansion project, location is always a foremost consideration.
Surrounded by France, Belgium, and Germany, the small nation of Luxembourg has built a first-class reputation for logistics and information technology in Europe.
DuPont Dips $500 Million into Cooper River In December, DuPont announced its Cooper River plant, located 30 miles north of Charleston, SC, will receive a $500 million investment to drastically expand production of high-performance Kevlar® para-aramid fiber for industrial and military uses. The multiyear, multiphase expansion will increase the global production capacity for Kevlar by more than 25%, making it the single largest investment in the fiber since it was introduced in 1965. Construction to expand the existing facility began in January and required 400 contractor jobs at the project’s peak. Scheduled for start-up in 2010, the plant will bring 100 permanent jobs to the Cooper River factory, which opened in 1973. The plant currently has 60 employees and primarily produces Hytrel® thermoplastic polyester elastomer for the automotive industry. “I can’t say enough about what [DuPont] brings to our entire region,” says Dan Davis, supervisor of Berkeley County, where the Cooper River plant is located. “Not only do they provide excellent jobs for our citizens, they are also stellar corporate citizens. This is definitely a win-win announcement for us all.” The new facility will allow DuPont to further refine Kevlar to improve its ballistic performance, providing lighter-weight protective apparel for law enforcement and military personnel. Among various other enhancements, it will also produce gloves with higher dexterity to allow more freedom of movement while still protecting hands from cuts. “The new plant at Cooper River, together with our other global assets, will help DuPont meet strong and growing global demand for Kevlar,” says Thomas G. Powell, vice president and general manager of DuPont Advanced Fiber Systems. Between 2000 and 2006, DuPont successfully completed four Kevlar fiber expansion projects at its Richmond, VA and Maydown, Northern Ireland facilities. DuPont also operates manufacturing plants in Japan and Spain. Kraft Creates 1,000 New Jobs in Newberry In December, Kraft Foods announced that it will expand its Louis Rich plant’s manufacturing space in Newberry, SC by 75,000 square feet. The growth will also create 1,000 new jobs. Kraft currently has about 1,700 employees at its Newberry facility, up from 1,260 at the start of 2007. The anticipated job surge will support the increased volume of new products. The Louis Rich plant currently produces Oscar Mayer sliced luncheon meats, turkey bacon, deli-shaved meats, chicken breast strips and cuts, and ground turkey. These goods are distributed throughout the country or shipped for further processing to other Kraft plants. Lyle Olson, Kraft plant manager, says the expansion project “demonstrates the company’s confidence in our team of employees […]
Canadian Company Opens U.S. Headquarters Imperial Manufacturing Group, a Canada-based maker of equipment for the heating, air conditioning, ventilation and building products industries, officially opened its new U.S. headquarters in Alton, IL last year in July. The facility has so far generated 86 jobs, with more expected in the future. The Illinois Opportunity Returns program made the move possible by granting a $655,000 business investment package to Imperial. “The size of the new facility in Alton will help increase production and efficiency of sales as well as benefit the community with new job opportunities,” says Bradley Spencer, Imperial’s vice president, U.S. sales and operations. Imperial Manufacturing Group currently occupies just over half of the 222,400-square-foot Alton Center II, with 5,000 square feet of office space, a 30,000-square-foot manufacturing area, and approximately 87,400 square feet of warehouse and distribution space. The Alton Center Business Park is a 150-acre, mixed-use development located at the foot of the Lewis and Clark Bridge at the intersection of Illinois Route 143 and Broadway. It was a 2001 Phoenix Award winner for Community Impact at the National Brownfield Conference. Local Manufacturer Gets Big State Support The state of Illinois is investing $560,000 in Fabritech Inc., an aerospace manufacturing and maintenance, repair and overhaul business that specializes in rotor-wing aircraft. The money will go toward expanding the company’s existing operations at the St. Louis Regional Airport in Bethalto, IL. The company, which is making an almost $1.7 million investment, will create 26 new full-time jobs within two years and retain 46 jobs. Governor Rod R. Blagojevich also announced the certification of a boundary expansion for the Riverbend Enterprise Zone to include Fabritech’s expansion; zone status will give the company income and job creation tax credits. This support comes as a part of Opportunity Returns, the governor’s comprehensive economic development strategy to continue create jobs and expand the economy of Southwest Illinois. Fabritech, Inc. was incorporated in 1992 and currently operates a 25,000-square-foot facility at the St. Louis Regional Airport. The company’s expansion project calls for not only refurbishing and remodeling its existing facility, but also doubling the size of the facility. The expansion is expected to be completed by the end of 2008. Chicago Keeps a Hot Company In February, the Chicago Development Commission approved a plan by CareerBuilder, one of the highest-profile employment services and Internet media companies in the world, to keep and grow its corporate headquarters in Chicago. The plan includes the rehabilitation and reconstruction of office space in order to consolidate some of […]
Thanks to an initiative proposed by the governor during her State of the State address, several road projects will start early, bringing thousands of jobs to Michigan.