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Regional Report: Mid-Atlantic Region Retaining & Growing Jobs Through Diversification

The Mid-Atlantic States are putting measures in place to retain their traditional manufacturing jobs, while also securing investments in pharma, wellness-based food, and other emerging sectors.

Directory 2016
Companies and employment in the Mid-Atlantic region are getting roiled by everything from the plunging prices of oil and other commodities to changes in manufacturing technology and the impact of the strong dollar on exports. Development efforts in the Mid-Atlantic States have been focusing not only on battling these headwinds but also on securing new investments in facilities and jobs in the economy’s fast-growing areas ranging from pharmaceuticals to bioengineering to all-natural foods to digital technologies.

Job Retention, Diversification
But occasionally, attempting to ensure the economic future of the region is as simple as going to the mat to help companies and preserve jobs that are already there. That’s exactly what happened in November after New York Gov. Andrew Cuomo and U.S. Sen. Charles Schumer came up with an incentive package that lured Alcoa into keeping open two plants in the Syracuse area.

The aluminum giant had been planning to close two smelting plants in Massena, N.Y., in response to changes in the aluminum market, especially falling aluminum prices. But the politicians were able to assemble $68.8 million of state government assistance over 3-1/2 years to keep the plants open and preserve the jobs of nearly 600 workers, in exchange for Alcoa’s commitments, including a workforce development training program to prepare workers for the high-tech jobs of the future, and with a provision for the state to take a lighter hit if prices of the metal improve.

Yet New York also has been battling to leverage the legacy diversity of its economy into advances in a variety of products and services beyond the heavy manufacturing that traditionally anchored its economy. SolarCity, for example, the solar-panel maker that is owned by Elon Musk of Tesla fame, pledged in October to hire another 1,500 workers in the next decade for its South Buffalo complex in addition to the 3,000 people that the company already hoped to hire. Officials hope the plant will produce about 30,000 solar panels a week once it is fully operational in five years. The first phase of the one-million-square-foot plant may be production-ready by the end of 2016.

Another growing opportunity for New York is distribution, particularly taking advantage of the state’s location on the Eastern Seaboard as a point of departure for growing exports from manufacturers across the United States. For example, Purolator International, the Canada-based shipping company, renovated and outfitted a 21,000-square-foot facility in Jericho, N.Y., where it is consolidating and expanding its operations and expects to create 40 jobs that will help it respond to rising exports by its clients. And Ferguson Enterprises, the nation’s largest distributor of residential and commercial plumbing supplies, opened its new $40.5 million distribution facility in Coxsackie, N.Y., planning to create 95 jobs there and preserving 319 retail jobs across the state with the completion of the project.

A Manufacturing Stronghold
Elsewhere in the region, states and companies continue to work together to buttress and expand the Mid-Atlantic’s historic strengths in various types of manufacturing.

In Delaware, for instance, AB Group Packaging, a 30-year-old paper bag and flexible packaging producer with plants in Ireland, Spain, and the United Kingdom, opened its first U.S. plant in 2015, creating 87 new full-time jobs. Gov. Jack Markell says the arrival of AB Group Packaging — which makes products for commercial retailers such as T.J. Maxx, Nike, and Hard Rock Café; and industrial customers like Ball Packaging, Crown Cork, and Weber Charcoal — represented a win for Delaware on two fronts.

“The kind of manufacturing jobs they create will help support long-term economic growth in a key industry,” Gov. Markell notes. “With this plant, AB also joins a number of international companies that are expanding in or moving operations to our state — an important trend in today’s global economy.”

AB Group Packaging’s largest customer is Primark, which recently acquired several well-performing, recently shuttered Sears department stores in the Northeast. Primark’s acquisition boosted AB Group Packaging’s need for a U.S. operation. Meanwhile, Solenis LLC, a leading manufacturer of specialty chemicals, has established its global headquarters in Wilmington, Del., where it has plans to add up to 122 new full-time positions. Solenis, which transitioned from a commercial unit of Ashland Inc. to a stand-alone company in 2014, will be adding well-paying IT, legal, sales, financial, and other positions at its new 40,000-square-foot headquarters.

Growth in Pharmaceuticals
States in the region increasingly attempt to leverage their historic concentration of pharmaceutical companies into further development opportunities. For example, Chugai Pharma USA opened a new office dedicated to translational clinical research in Berkeley Heights, N.J. The facility serves as the hub for Tokyo-based Chugai, which entered the U.S. market in 1982.

“New Jersey’s standing as a key market for pharmaceutical innovation will aid in the growth of our U.S. talent and operations, which will in turn support and further strengthen our pipeline of novel therapies designed to fulfill unmet needs and improve patients’ lives across the world,” says Norihisa Onozawa, president and CEO of Chugai Pharmaceutical USA.

Meanwhile, Bergen Medical Products is the epitome of an emerging biotechnology company that successfully leverages state resources to sustain and strengthen its position in the marketplace. The Cedar Knolls, N.J.-based business, which creates products to reduce post-surgical complications, attracted more than $400,000 last year from investors who benefited from the state’s Angel Investor Tax Credit Program. Administered by the New Jersey Economic Development Authority (EDA), the program provides tax credits of 10 percent of a qualified investment in an emerging technology business that conducts research, manufacturing, or technology commercialization in the state.

“As someone who has over 20 years of experience working for medical device and pharmaceutical companies and lives in New Jersey, starting Bergen Medical Products in New Jersey was an easy choice,” John Bailye, Bergen Medical Products’ chairman, told the EDA. “We investigated other locations, but New Jersey consistently returned the highest value for readiness and talent for employees, centralization to transportation and logistics, as well as the specialized supplier network that has been optimized for serving New Jersey’s current large base of medical device, biomed, and pharmaceutical companies.”

Pennsylvania is another Mid-Atlantic State that increasingly has been tapping into the growth of the pharmaceutical and bioengineering sectors. For example, Adaptimmune Therapeutics, a clinical stage biopharmaceutical company focused on developing T-cell receptor cancer immunotherapy treatments, will create at least 110 new, high-paying jobs with an expansion project at the Philadelphia Navy Yard. The company will expand operations and relocate to a 46,000-square-foot site, investing more than $4 million.

Producing “Better-For-You” Food Products
The Mid-Atlantic States are increasingly pivoting toward a central role in the “better-for-you” food trend that favors startup and disruptive new ventures and penalizes traditional, large packaged-goods manufacturers that tend to be concentrated in the Northeast and Midwest.

For instance, All Fresh Farms, an indoor hydroponic production and packaging operation that specializes in growing lettuce mixes, kales, and basil, is establishing a new facility in Pike County, Pa., that will create at least 200 new jobs. The company plans to invest more than $3.4 million at the new site, with plans to double the size of the facility within the first five years of operation.

“Our leafy vegetables and other produce will be labeled ‘locally grown,’ as we deliver to markets within 400 miles, which will include Philadelphia; Washington, D.C.; and New York City. This is a great location with a great welcome to our company,” Steve Nelson, the company’s owner, told the Pocono Record in May.

And Pinnacle Foods plans a new plant to produce its Gardein brand of plant-based proteins, which are at the center of the move by U.S. consumers toward more vegan sources of protein. Pinnacle’s new plant in Hagerstown, Md., will create 85 to 125 jobs by the end of 2018, giving Gardein its first East Coast manufacturing presence.
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