H&A’s David Hickey, Senior Director, was recently featured in Trade and Industry Development’s Q4 issue. Strategies for Today’s U.S. Plastics Industry Site Selection outlines key factors to consider for plastic industry leaders when analyzing locations. Plastics play a key role in daily life and the plastics industry is integral to the American economy. With a dynamic future, site selection evaluation is becoming more vital to discover the most effective location for industry related companies.
Below are highlights of Strategies for Today’s U.S. Plastics Industry Site Selection. To enjoy the full article, please click this link.
Energy Costs and Infrastructure
A key factor to ensuring a successful site for the plastics industry is access to affordable and reliable energy. The United States is a dynamic energy country with a number of different sources powering businesses and homes. Electricity rates and sources are dependent on several factors, including geographical location, state regulatory standards and grid access.
Access to Transportation
Access to freight rail is often an essential requirement for the plastics industry. According to the American Chemistry Council, the nation’s freight transportation network moves approximately 130 million tons of plastic resins annually. Of the total shipments, freight rail accounts for 37 percent. Dependence on rail is expected to continue into the future.
The leading mode of transportation for the plastics industry today is on the nation’s interstate highway system on trucks. Close proximity to the interstate system allows for important cost savings and operational efficiencies for the industry. As of 2012, approximately 53 percent of plastic resins shipments traveled in America’s trucks.
Increasingly important to any site decision is ensuring an affordable and available workforce exists.The plastics industry is no different from other industries in needing to secure the right talent. Across the United States, workforce dynamics in manufacturing, let alone plastics, varies significantly from region to region.
Businesses must be confident that an adequate and skilled workforce exists when determining a new location. In the plastics industry, companies are particularly focused on finding employees with engineering, skilled trades and production backgrounds. When evaluating a location, a labor analysis should commence to understand the true makeup of the local workforce.
Economic Development Incentives
American manufacturers are still one of the most sought out industries in the United States by political leaders and economic development officials. As real estate leaders for the plastics industry seek support from communities, they should expect to find the same enthusiasm.
Following are examples of incentive programs available for the plastics industry in the United States.
- Wisconsin Manufacturing and Agriculture Credit – For plastics manufacturers in the State of Wisconsin, businesses may be eligible for 7.5 percent state tax credit, which sets up for an effective corporate tax rate of 0.4 percent.
- South Carolina Fee in Lieu of Taxes (FILOT) Program – Manufacturing businesses may capture tax abatements for up to 20 years at the discretion of local governments.
- Virginia Tobacco Region Opportunity Fund – Manufacturing businesses with significant investments and job creation may be eligible to capture performance-based monetary grants in Virginia’s former tobacco-producing regions.
- Texas Freeport Exemption – Plastics manufacturers may qualify for an ad valorem exemption for various types of goods held in Texas for less than 175 days.
- California Economic Development Rate – Businesses in California may secure discounted economic development rates. Eligible reduced tariffs can be found through Pacific Gas and Electric Company and Southern California Edison.