Our aging population is the driving force behind tremendous growth in the plastics and medical device industries. Where will you grow your facility?
“From blood bags and examination gloves to glucose meters and heart valves, vinyl, polyurethane and other plastics have traditionally been the healthcare industry’s materials of choice,” says Society of the Plastics Industry (SPI) President and CEO William R. Carteaux. “The materials’ strength and versatility will continue to be in demand as medical discoveries and treatment breakthroughs create a need for new medical tools that only plastics can deliver.”
In fact, plastic medical device manufacturing is such a large part of the plastics industry that in 2007 SPI and its Alliance of Plastics Processors (APP) business unit announced the launch of the APP Medical Products Section. This new section is comprised of material suppliers, molders, machinery companies, moldmakers and original equipment manufacturers (OEMs) across the plastics industry spectrum that are involved in the medical products field.
Recent projections state that the medical device market is growing 8% to 12% a year according to SPI. The need to reduce healthcare cost and the use of disposable medical supplies are important factors generating a higher demand of medical plastics. And just as important are demographic trends. The Census Bureau periodically publishes projections showing U.S. population estimates by age bracket; the latest published data (published in early 2004) show that the percentage of people 65 and older will increase to an estimated 20.7% by 2050.
According to Census estimates, due to the influx of “baby boomers” and an anticipated increase in overall life expectancy, by 2020 there will be more than 54 million people 65 and older, and more than 86 million by 2050.
The aging population is already influencing the future direction of the medical device industry due to its changing health needs and an accompanying shift in thinking on how and where seniors will be treated. Baby boomers are living longer lives than previous generations, requiring more sophisticated and longer-term healthcare. Not only are they living longer, this population of people wants to remain active well into their twilight years. Polymer-containing devices such as artery-opening stents, heart pacemakers, and hip replacements improve life quality for this growing population of older people. And then there are the profit opportunities offered by the $50 billion-per-year global medical device market as well.
So one thing is certain—the demand for polymers will grow in tandem with the upsurge in medical device innovations driven by the needs of the aging population. According to Medical Product Outsourcing, medical device manufacturers should consider two main factors when deciding where to locate a new facility:
1) Proximity to a knowledgeable, highly trained and productive workforce; and
2) Being part of a cluster of other medical device or high-tech companies to share in the infrastructure built to support such industries (e.g. consultants, distribution channels, and networking opportunities).
Here are the locations that are putting in place the incentives and innovations necessary to help your plastic medical device company succeed.
Riverside County, CA: The Right Place at the Right Time
All the pieces are in place in Riverside County, the heart of Inland Southern California, to support a growing cluster of biotech, medical device and drug research companies and laboratories.
According to Dunn & Bradstreet, the region, which runs from Temecula and Murrieta in the south to Corona to Riverside and back down the fast-growing I-215 corridor to Temecula, is already home to an estimated 200 companies with sales of $1.5 billion and approximately 8,000 employees. In fact, the American Electronics Association (AeA), a trade association serving all sectors of the technology industry, recently completed a report that identified Riverside County and the surrounding region as having the fastest technological job growth in the nation in 2006.
The California Healthcare Institute, the lobbying organization for the biomedical and pharmaceutical industry, reports that more than 225,000 Californians work in an industry that includes 2,500 companies engaged in some form of biomedical research or production—everything from selling beakers to inventing drugs.
Not surprisingly, Riverside County boasts an available pool of skilled labor familiar with clean room policies, affordable real estate, innovative financing that includes two venture capital groups, special business zones, and easy access to other key Southern California and southwestern U.S. markets.
Like real estate, the biotech business is all about location and being in the right place at the right time.
“Clusters of existing and emerging science-based technologies are crucial factors in shaping the economic winners and losers of the first half of the 21st century,” according to a study by the Milken Institute, a Santa Monica-based think tank.
One of the region’s biggest selling points is its skilled workforce. About one-quarter of its residents hold bachelor’s degrees and more than 35% are professionals and managers. “Riverside County’s workforce is our strongest asset that will help ensure a tech company’s success,” says Sarah Mundy, Deputy Director for Economic Development and a Workforce Development Board member for Riverside County. The built-in pool of homegrown workers has allowed large companies such as FFF Enterprises, Abbott (formerly Guidant), Watson Pharmaceuticals and Millipore (formerly Chemicon International) to prosper.
“If you are going to locate a biotech company here, we already have people who live here who are knowledgeable,” says Bob Larson, former vice president of operations at Guidant’s sprawling Temecula plant, which employs more than 5,000. “All of the disciplines in the biotech industry are resident in the Abbott facility.”
The critical educational infrastructure is also there to support and nurture technological development.
From 2000 through 2006, the companies and research facilities in Riverside County produced more than 1,000 patents and spent upwards of $150 million on research and development during roughly the same timeframe.
It should come as no surprise that one-fourth of all publicly traded biotechnology firms in the United States can be found within 35 miles of a University of California campus. The University of California, Riverside’s influence on the region as a premier R&D institution has been profound and far-reaching. The school has a strong emphasis on nanotechnology, bioscience, and engineering, plus a new medical school is on the way.
A hub for emerging and rising science and technology businesses is being developed through a partnership between the city and county of Riverside and University of California, Riverside. The 56-acre University Research Park is already home to several technology companies, including Surado Solutions, Ambryx Biotechnology, Centrum Analytical Laboratories, and Viresco Energy.
In addition, nearby are internationally known Lorna Linda University and Medical School, and Keck Graduate Institute of Applied Life Sciences, The Claremont Colleges’ first entry into graduate-level, application-based scientific research and education. Industry observers believe the region’s growth will be fueled in part by its closeness to San Diego’s Biotech Beach, one of the nation’s leading biotech and medical research clusters.
“Because of our proximity to Biotech Beach, we have developed business arrangements with emerging biotech companies in San Diego,” says Patrick M. Schmidt, chief executive of Temecula-based FFF Enterprises, which has become a trusted distributor of biopharmaceuticals, plasma products and vaccines, and also provides valuable services to nascent biotech companies. “We’d like to think that they have one of world’s top secure distribution channels on their doorstep.”
The region continues to be an attractive destination for expanding companies because of its affordable land and executive housing.
“Moving Opto 22 from Huntington Beach in Orange County to Temecula in Riverside County was a key corporate decision that has helped fuel our growth,” says Benson Hougland, vice president of Opto 22—a Riverside County-based manufacturer of computer hardware and software for industrial automation, data acquisition, and remote monitoring applications. “With access to a skilled workforce, strong new business partners, lower overall business operating costs and a higher standard of living for Opto 22’s employees, relocating to Riverside County has been an important factor leading to the success we’ve enjoyed over the past 16 years.”
Paducah/McCraken County, KY: Cost-Effective with Easy Access
Paducah/McCracken County is in western Kentucky, a middle America location that is one day’s drive from 65% of the nation’s consumers: six hours east to Atlanta, seven hours north to Chicago and eight hours west to Kansas City. Situated on Interstate 24, Paducah offers access to six interstates within 120 miles.
California-based Infiniti Media was looking for just the right place to build a full-service manufacturing facility that would bring them close to their customer base and enable them to keep pace with the fast-growing demand for optical media packaging. They found their perfect combination in western Kentucky. Their new Paducah manufacturing plant is a state-of-the-art, 100,000-square-foot fully automated injection molding facility complete with dual line rail spur and interstate access. Aligned with the top-tier resin producers for their quality products, the company processes millions of pounds of resin materials in Paducah each month.
Infiniti Media manufactures DVD cases for the music video and gaming industries including products such as Sony Playstation 3, Xbox and Nintendo WII. The company’s president, Saeed Yousefian, attributes the company’s success to its customer commitment.
“Replicators want consistent product quality, capacity, supply chain efficiency, and disciplined cost management—and we’re committed to being best in class on all counts,” says Yousefian.
Bringing raw materials in by rail is critical for Infiniti. Paducah is served by Canadian National, which connects with all Class I rail lines. It’s the only railroad that crosses the country east to west and north to south. In addition, the Paducah & Louisville Railway is a regional line offering rail-to-barge-to-rail services on the Ohio and Tennessee Rivers. It also serves both of Paducah’s industrial parks and connects to five Class I railroads. And the instant access to Interstate 24 accelerates shipping to all parts of the country.
Low operational costs are key criteria for Infiniti as well. Kentucky has been one of the five lowest-cost states for electricity every year since 1990 and has had the lowest electric rates for six consecutive years. Kentucky ranks fourth in state business cost comparisons (15% lower than the national average) and is working hard to further improve that ranking, including a lowering of the corporate income tax for two years in a row.
While manufacturing has a strong base in Paducah because of its attractive location, transportation options, and low cost, you’ll find that high technology also thrives with local university support and a rich regional medical environment. Ulrich Medical Concepts (UMC), a medical software development company, is headquartered in a new $2.5-million facility in Paducah’s Information Age Park. UMC provides medical practices with an avenue for instant retrieval of their medical information in a totally paperless environment. Constantly on the cutting edge, UMC continues to develop software to meet the needs of their customers. Their new company, Revenue Solutions, increases productivity for healthcare practices by offering integrated electronic billing services. Physicians and healthcare providers appreciate this service because it provides revenue cycle management compliancy and results in increased productivity.
“We’re always looking for ways to advance technology so that physicians can provide a higher level of care. And our product growth means we’re going to need to bring more highly qualified health care professionals and billing experts to the company—employees who provide excellent support for our customers,” says Dan Jarrett, president of UMC.
The Greater Paducah Economic Development Council (GPEDC) has targeted the plastics and medical device industries and is pursuing them aggressively. Three business and industrial parks offer a variety of sites. Whether it’s a headquarters operation in a campus environment, a rail-served manufacturing operation, or a distribution center on the interstate, the GPEDC can locate and provide just the right site to meet a company’s needs.
Paducah and McCracken County work with the Commonwealth of Kentucky to customize incentive packages that positively impact the bottom line of companies seeking to relocate or expand.
Laurens County, SC: A Logistical Dream
Laurens County is located in the upstate of South Carolina mid-way between Greenville-Spartanburg and Columbia. Interstates 26 and 385 bisect the county, which makes it easily accessible to I-85 and the Port of Charleston. Clemson’s Advance Material Research is located in neighboring Anderson County. This facility is just a short distance away and easily accessible by the Interstate systems. Laurens County has four industrial parks located along its two interstate systems. Woodfield Industrial Park is located near Exit 22 on I-385 and Owings Industrial Park is located near Exit 19 on I-385 both of which are near the Greenville/Laurens County line.
Woodfield Industrial Park has approximately 130 acres remaining and Owings Industrial Park has 316 acres. Owings Park has rail service provided by RailAmerica. RailAmerica transports over 500 million pounds of polymer annually. Hunter Industrial Park is located on I-385 and US 221 at Exit 9 and has almost 400 acres available and is rail served by CSX. ClintonPark Corporate Center Phase III is available for industrial development. Phase 3 is just over 1 mile from Exit 54 on I-26 and has 140 acres available. It has access to rail, which is served by CSX. Owings, Hunter and Clinton Park III are certified sites by the South Carolina Department of Commerce.
In addition to the industrial parks Laurens County has several stand-alone sites that are rail served. One such property is the Fleming Smith site, which is 1,500 acres. It is located at the intersection of I-385 and US 221 in Laurens. The site is rail served by CSX.
A Site Evaluation and Engineering Report has been completed on this site. The SEER includes a Phase I Environmental Study, a Geotechnical Study, a Wetlands Determination, an Endangered Species Study, a Cultural Resources Study, a Seismic Study, an Infrastructure Evaluation with Infrastructure Cost Estimates and the site has been Master Planned.
The county has several buildings available for immediate occupancy. There is a 31,600-square-foot spec building with 28- to 33-foot ceiling heights in Woodfield Industrial Park. This building was completed in January 2007. Also available in Gray Court is an 80,000-square-foot building that was formerly occupied by BBA Non-woven. The building has six silos, a rail spur with a covered unloading area and a ground water tank for fire suppression. There is also a 550,000-square-foot building near the City of Clinton that is located on CSX rail. The building is a former Timken facility.
The current unemployment in the county is 8.0%, which is slightly above the state average of 7.6%. Thirty-two percent of the employment in the county is in the plastics industry, many of which serve the automobile industry.
The cost of operation in Laurens County is very attractive. The Laurens County Council is very pro-business and offers aggressive tax reductions. For example, on a two and half million-dollar investment, the county can reduce the assessment ratio thus reducing taxes by over 40% for a period of twenty years. In addition, the county also has the ability to offer a Special Source Revenue Credit that further reduces taxes for a period of 10 years. Laurens County is classified as a level two county by the state, which makes state incentives very attractive. In addition to these incentives the county’s average wage is below the state average resulting in an even lower cost of operation. The State of South Carolina also offers one of the nations best training programs with the ReadySC Training program. This program is consistently one of the top ranked training programs in the country.
Laurens County offers a rural living environment with a metropolitan life style only minutes away. Lake Greenwood, which borders Laurens County, offers water sports, fishing and lakefront properties. Presbyterian College in Clinton offers college sports and theater opportunities. Musgrove Mill Golf Club, designed by Arnold Palmer, offers one of the most challenging courses in the state. Laurens County’s location offers a near perfect climate with no abnormally rainy or dry seasons.
Why locate in Laurens County? It offers an excellent location with easy accessibility, a good available workforce, low cost of operation and a great rural community in which to raise a family.
Martinsville-Henry County, VA: Producing the Finest Plastics Products Available
Martinsville-Henry County, VA knows plastics. The county is producing some of the finest plastics products available.
Martinsville-Henry County is home to some of the world’s most important players in the plastics industry from the largest manufacturer of window film, to the fastest-growing window film manufacturer, from the industry trendsetter for felt liners, to a leader in the world of expanded polystyrene foam products.
Solutia, Inc./CP Films, Inc.; Commonwealth Laminating and Coating, Inc.; Applied Felts, Inc.; and Tri-State Foam Products, Inc. are all leaders in their industries, and they do it all from Martinsville-Henry County.
The county’s strategic mid-Atlantic location reduces transportation time and cost for product delivery. Five interstates and two major airports within 50 miles, plus access to the Port of Virginia and Norfolk Southern rail service, offer you a variety of reliable shipping options.
Located only 35 miles from Martinsville-Henry County, the Advanced and Applied Polymer Processing Institute (AAPPI), part of the Institute for Advanced Learning and Research, is a national research and engineering center of excellence providing strategic contract research arrangements, as well as state-of-the-art analytical, processing, and testing services for the polymer manufacturing, processing, and converting industries. A primary focus of the center is to strengthen polymer-based companies by enhancing their production efficiency, profitability, product quality, and global competitiveness. Martinsville-Henry County offers a pro-business attitude to help you get your plant up and running quickly. A multitude of available sites and buildings, and a trained workforce means county officials can help speed your product to market.
You might like:
- Mary’s Gone Crackers Expands, Relocates HQ To Nevada
- SNAPSHOTS: 60 Seconds… with Dennis Davin, Secretary, PA DCED
- Industry Focus: Aerospace Sector Is Flying High Again
- Data Cowboys
- Leading FDI Experts Analyze Global Trends At LiveXchange
- Chicago Celebrates Technology Startup Hub Expansion, 700 New Tech Jobs
- Mitsubishi Heavy Industries HQ Moving To Texas
- Kansas City Launches “Smart City” Initiative
- Shopping Bag Manufacturer Creating 100 Jobs In Georgia
- Automotive Parts Supplier Expanding In Indiana
- Advanced Manufacturing Industry: Dynamic Advancements
- Michigan Hot Dog Maker To Expand, Hire 140 Workers
- Two-Way Street
- Salesforce To Grow Regional HQ, Add 800 Jobs In Indiana
- Foreign Direct Investment: On the Rebound?
- SATA Group Building New Plant In Texas
- Companies Shifting Cost Strategies In Turbulent Global Markets