6C — July 15 - 28, 2016 — Northeastern PA — Pennsylvania — M id A tlantic
Real Estate Journal
www.marejournal.com
N ortheastern PA
Penn’s Northeast is currently courting two firms to build in region Scranton/Wilkes-Barre/Hazleton MSA best for food processing in Northeast U.S.
N ORTHEA S TERN PA — Food processing companies spend less to operate in the Scranton/ Wilkes-Barre/Hazleton metro area than any other north- east market, according to a national study by a Princeton, New Jersey site selection guru, John Boyd Jr. from Boyd Co. Inc ., which completed the study this month. The study, which examined 24 of the top food processing regions, comes as the nation grapples with Canada to en- tice manufacturers. Canada, particularly eastern Ontario, looks especially sweet with a
solid labor force and free-trade agreements with twice as many countries as the United States. With a socialist health care system, Canadian businesses’ labor costs for insurance are about half that of the U.S., John Boyd said. Boyd picked its study markets based on clients’ inquiries. Boyd helps produc- ing giants such as PepsiCo, Gerber Products and Nestle find suitable locations to build. Considering operating costs such as payroll, utilities, debt repayment and taxes, it would cost the survey’s baseline plant — 300,000 s/f with 500 em- ployees — about $38.5 million
annually to do business in the Northeast PA region. By com- parison, it costs about $45.7 million in San Francisco but only about $30.3 million in Ontario. The other two Pennsylvania metro areas in the study trailed Northeast PA with the Lehigh Valley 13th at $40.2 million and the Harrisburg area 14th at $40.3 million. Cost is a factor, local experts say, how- ever a strong labor force and proximity to major East Coast markets heap tremendous ap- peal to food processors. “They’re specifically looking at time to market. We often use
the statistic that 80 percent of the nation’s buying power is in a 500-mile radius of Northeast Pennsylvania,” said John Augustine III , executive di- rector of the regional economic development agency Penn’s Northeast . “Meaning that in one day’s drive, they can hit a tremendous amount of the population.” Lackawanna and Luzerne counties already are home to 76 food manufacturing firms, according to Teri Ooms , ex- ecutive director at The Insti- tute for Public Policy and Economic Development . Those firms employ about
4,200 people with employees on average earning $54,000 a year. Food processing business has expanded 11.5% in the last six years, “demonstrating the type of strength this type of manufacturing has in the region,” said Terri Ooms. Large processed food manu- facturers are facing tough deci- sions with what some describe as draconian rule making from the Food and Drug Admin- istration. The FDA this year rolled out the final pieces of the Food Safety and Moderniza- tion Act, and food and beverage makers claim the stiffer regu- lations will render doing busi- ness untenable. Faced with the reality of spending millions to retrofit plants, many are ask- ing “does it make more sense to relocate to a low-cost market?” Boyd said. Add to that, a record drought in California is forcing the myriad water-dependent in- dustry players there to con- sider uprooting. And they’re eyeing places like Northeast Pennsylvania where the work- force is trainable and depend- able and the water supply abounds, Boyd said. The second-generation con- sultant was in Scranton on Tuesday and Wednesday to meet with “two or three cli- ents” who already have a presence in the area but are considering expansion, he said. He would not identify those clients or offer details about their plans. However, he praised the region’s network of colleges with market-minded training programs to keep the job force local and ready. He also tipped his hat to the Greater Scran- ton Chamber of Commerce , which he said is known nation- ally for its large-scale business development efforts. “Food processing joins other employers like plastics and ad- vanced manufacturing among the high-priority business eco- nomic developers are fishing for.” Augustine said. “We’ve certainly seen regionally an uptick in the amount of in- quiries when it comes to food manufacturing and processing, to the point that we’ve listed it as one of the top clusters to try to proactively attract to Northeast PA.” Penn’s Northeast currently is courting two new food pro- cessing firms to build in the region, said Augustine. n
Food Processing in Northeastern Pennsylvania “The best in the Northeast U.S.”
Food Processing Costs in the United States & Canada
24 high-volume food processing regions in the U.S. & Canada and their annual costs and rankings.
1 Eastern Ontario Region
$30,274,935 *
2 Cleveland Region
$36,467,050 *
3 Portland, Maine Region
$37,269,826 *
10 Northeast PA Region
$38,464,154 *
13 Lehigh Valley Region $40,213,410 * 14 Harrisburg/Lebanon Valley Region $40,370,682 * 22 Salinas/Monterey Bay Region $44,169,431 * 23 Brooklyn/Long Island Region $45,379,307 * 24 San Francisco Bay Region $45,731,290 *
Source: The Boyd Co. Inc., National study on food processing. * Millions
Call Us @ 1 . 800 . 317 . 1313 We have what you’re looking for.
1.800.317.1313 I pennsnortheast.com
Made with FlippingBook flipbook maker