Transformative Manufacturing Announcements from 2021
by Josh Bays, on Nov 16, 2021 9:31:54 AM
The manufacturing sector across the country in the past year continued to be incredibly dynamic. While many of the active projects represent small and medium-sized operations, there seemed to be unprecedented “deal flow” of extremely large-scale projects that had high job creation figures, large capital investment plans or required substantial utility infrastructure. While communities, states, and utilities will undoubtedly benefit from large-scale projects, they can significantly impact the site selection activities of other firms.
As a result, Site Selection Group, a leading location advisory, and economic incentives firm, tracks these mega projects to ensure our clients are benefiting from the most recent market intelligence. We thought it would be interesting to highlight three of these notable announcements from 2021:
Notable Manufacturing Announcements
Site Selection Group identified the three “megaprojects” from the past year that may affect the competitive landscape for the surrounding areas:1. Leprino Foods Co. in Lubbock, Texas: With an estimated $870 million in capital investment, this project is the largest single private capital investment project seen in Lubbock’s history. Dairy will be supplied by local farms in the region to create mozzarella and nutrition products. This is also accompanied by two other large dairy announcements in West Texas, Cacique in Amarillo and Great Lakes Cheese in Abilene.
2. Ford Motor Co. in Kentucky and Tennessee: Ford announced a new mega campus in Stanton, Tennessee as well as twin battery plants in Glendale, Kentucky, which are estimated to create a combined 11,000 jobs. These locations are prime for these innovative projects due to their strong workforce proposition.
3. Fujifilm in Holly Springs, North Carolina: This $2 billion complex is projected to be the largest end-to-end biologics plant in the world. They will employ an eventual 725 workers in the Raleigh-Durham Research Triangle.
The transformative power of a project and how it impacts other site selection decisions
Megaprojects like these can impact a community’s utility capacity, housing, tax base, and traffic conditions. However, the most dramatic impact is typically how these projects can also significantly change workforce demographics. They can single-handedly swing labor supply and demand balances while also impacting the underlying demographics of a community over time.
As a result, other companies considering new and expanded operations in those and other fast-growing markets need to pay close attention on the real-time and future impacts of those announcements on their own decision. For example, these mega announcements are going to put significant pressure on workforce availability and recruiting along with upward pressure on wages.
A new 150-employee operation (a very common project size) needs to be very cognizant of the impacts of locating next to or even within the same labor shed of these huge new manufacturing operations. Even for larger markets, a project bringing 2,000 new jobs has the power to transform the labor market.
The overall impact of these projects won’t be seen in traditional economic data like unemployment rates, wage levels and employment statistics for some time, so understanding what’s happening today can help avoid significant challenges moving forward.
Predicting where the next large project will go
While recent projects from 2021 are important to consider when evaluating a new location, it is also critical to look to the future and plan for the next big project announcement, and how that will impact other location decisions.
It’s impossible to predict which market will be home to the next automotive or aerospace manufacturer, but it is still essential that companies and their location partners have their fingers on the pulse of which markets may be ripe for the next big announcement. For example, it’s critical to have intimate knowledge of which states are looking to target the next assembly plant, which markets have “shovel-ready” mega-sites that will likely be on the shortlist for a major investment, and which communities are going to go all in to support a huge project (financially and otherwise).