SOUTH CENTRAL REGION
From Site Selection magazine, March 2007


Feeding
All Appetites


Data centers, energy,
food and chemicals
spur growth across
the south central U.S.


by JOHN W. McCURRY
john.mccurry bounce@conway.com
I
nformation technology is a major industry in San Antonio, employing some 12,000 people at average annual wages of more than US$43,000. Both of those numbers will get a nice boost with Microsoft's planned $550- million data center in the city's northwest quadrant.
   The project will be Microsoft's second "next generation" data center. The first, in Quincy, Wash., is nearing completion.
   Brooke Richardson, group product manager for Microsoft's Windows Live, says Microsoft looks at more than 30 factors in selecting a data center site, ranking from cost of land and power to work force and quality of life issues. The search for the company's second next generation data center, which took
Marathon Oil is ramping up for a $3.2- billion expansion of its Garyville, La., refinery. The facility is the most recent refinery built in the U.S., originally constructed in 1977.
Photo courtesy of Marathon Oil
The former site of the scuttled Superconducting Super Collider Research Center may see new life as a site for a secure data center.
about nine months, was global, she says.
   "San Antonio floated to the top as our staff worked with city and county officials to determine what our presence would look like," Richardson says. "City and county and economic development folks worked together to create a holistic package for us."
   The San Antonio facility will employ about 75 with annual wages of up to $70,000. The 400,000- sq.- ft. (37,100- sq.- m.) building will house large- scale Worldwide Web services for Microsoft's online services business.
   Richardson says Microsoft could break ground as early as this spring, and construction is expected to take about two years. She says Microsoft's search for potential data center sites is ongoing and the company will likely build more of these much sought- after facilities in the coming years.
   The Microsoft project continues San Antonio's data center spree. Lowe's Companies is building a $60- million facility in the same area of the city. The facility, which will employ up to 25, will be operational by mid- 2007.
   There's little doubt one of the more interesting potential data center sites in Texas, or anywhere else for that matter, is the Collider Data Center, being marketed at the site of the Superconducting Super Collider Research Center near Waxahachie, north of Dallas. The U.S. Department of Energy once had great plans to build the world's largest particle accelerator there. Construction on the $11- billion project began in 1989, but was scuttled by Congress in 1993 after partial development of 17 miles (27 km.) of tunnel and $2.4 billion in costs. DOE turned over the SSC property to the state of Texas for disposal.
   "The site left there by the DOE gives a pretty good start," says Bryan Loewen, director of Mission Critical Connect, a division of Dallas- based commercial real estate firm GVA Cawley, which is marketing the site for Collider Data Center LLC and investment partner J.B. Hunt. The 135- acre (55- hectare) site includes 215,000 sq. ft. (20,000 sq. m.) of buildings and access to the rock- and concrete- encased tunnels 250 feet (76 m.) beneath the earth's surface.
   Loewen says there has been a fair amount of interest in the site, which is in an isolated area about 25 miles (40 km.) north of downtown Dallas. He says the site makes most sense for U.S. government agencies not requiring proximity to other operations.

Project Roundup Paints Robust Picture
Alberto- Culver chose Jonesboro, Ark., for its new production facility.

Energizing the Region
   Natural resources in the South Central states provide a strong propellant to a variety of energy projects ranging from the new rage of alternative power sources to more traditional energy sources. There's no current shortage of either in the region.
   Wind power, the fastest growing source of electricity generation in the world, is such a big deal in Texas that tourists can actually drive on the Wind Power Trail to take a gander at commercial wind farms. The state leads the nation by a breezy margin in wind power with 2,768 megawatts installed at the end of 2006, with more than 1,000 megawatts under construction. There are more than 2,000 wind turbines in West Texas alone. Other areas with vast potential include the High Plains and along the Gulf Coast. Locations on top of the mountains and mesas in West Texas and along Panhandle ridges are being developed first.
Hino Motors Manufacturing USA, a subsidiary of Hino Motors, began production at its new facility in Marion, Ark., last fall. The plant produces axle parts and assembles axles for Toyota Trucks.
Texas supplanted long- time wind energy leader California during the first half of 2006.
   Texas is home to the world's largest wind farm, FPL Energy's Horse Hollow Wind Energy Center in Nolan and Taylor counties southwest of Abilene. It comprises 291 GE 1.5- megawatt wind turbines and 130 Siemens 2.3- megawatt wind turbines spread over nearly 47,000 acres (19,021 hectares). FPL Energy spent more than $1 billion during 2006 to expand its Texas wind business.
   "The Horse Hollow Wind Energy Center is an important new source of clean, renewable power for the region that also provides significant economic benefits to the area in the form of taxes, new jobs, lease payments to landowners and the purchase of local goods and services," said Jim Robo, president of FPL Energy. "Projects like Horse Hollow are possible because of the pro- business environment that exists in Texas today as well as tremendous support from the local community."
   Wind energy growth is good news for Beaird Industries, a Shreveport, La., company that began manufacturing in 1918 and for decades was a major supplier of equipment for the oil and gas industries. The company was purchased by a group of investors in 2004 and is now thriving and expanding as a manufacturer of wind towers in response to growing U.S. demand.
   But the largest energy project in terms of investment falls into the traditional category. Marathon Oil received final approval in January from the Louisiana Dept. of Environmental Quality for the $3.2- billion, 180,000- barrels- per- day expansion of its Garyville refinery. This will provide an increase of 7.5 million gallons of transportation fuel per day. Marathon plans to begin construction in 2007 with start- up slated for the fourth quarter of 2009. The expansion will add 180 to 200 employees. The refinery, which began operation in 1977, is the most recent to be built in the U.S.

Chemical Firms Formulate Expansions
   Louisiana's cornerstone chemical industry is in expansion mode with the recent announcements of several major projects. Pioneer Companies will expand its St. Gabriel chlor- alkali plant by 25 percent on its 300- acre (121- hectare) site near Baton Rouge. The $142- million project will include the conversion of the plant to membrane cell technology from the existing mercury cell technology, an outdated technology blamed for polluting the environment. The additional chlorine production from the expansion will be shipped to nearby customers via Pioneer's three chlorine pipelines at St. Gabriel.
   Michael Y. McGovern, Pioneer's president and CEO, said the expansion will help Pioneer meet the needs of customers who want chlorine delivered by pipeline. It will also allow the company to significantly lower its production costs.
   "One of the key reasons is that the membrane cells are approximately 29 percent more energy efficient than mercury cells," McGovern said.
"The new plant will join
our current 10 distribution
centers, plus the ones we
plan to open in the future."
– Mario Paez, president of
Mexico- based Sigma Alimentos, on
the firm's first U.S. plant in Oklahoma
"If natural gas prices increase, the economic benefits of this conversion will be more significant."
   Dow Chemical's growth includes a project in Louisiana and two in Texas. Dow is building a new integrated Vinyl Methyl Ether (VME) facility at its St. Charles operations in Hahnville, La. It will replace production in South Charleston, W.Va. Dow expects to begin operations there in mid 2008. VME is a base chemical for biocide and fungicide applications, commonly used in antimicrobial products, waste treatment products, leather tanning, sanitizers and preservatives.
   Dow's Building Solutions business group broke ground in November on a plant to produce Styrofoam brand insulation in LaPorte, Texas, 30 miles (48 km.) southeast of Houston. Dow said the plant will provide capacity to transition its entire North American Styrofoam manufacturing asset base to next- generation insulating formulations to meet federal guidelines anticipated to take effect in 2010.
   Dow is also expanding its Freeport, Texas, MDI (diphenylmethane diisocyanate) facility. MDI is a raw material used in the production of rigid polyurethane foam and polyurethane elastomers. The first half of the increased capacity is expected to be available in early 2008.

Cold Cuts And Sport Drinks, Anyone?
   Oklahoma boasts a broad- based food processing sector with products ranging from flour milling to dairy products to pet foods. The state is continually adding projects to its food mix.
   Sigma Alimentos, part of the Mexican ALFA conglomerate and one of Mexico's largest suppliers of refrigerated and frozen foods, is building a cold cut manufacturing facility in Seminole, with plans to begin operations during the third quarter of 2007.
   "Our current and potential penetration in our target market justifies the building of a plant in the U.S.," said Mario Paez, Sigma's president. "We want to be closer to better serve our Hispanic customers, and the new plant will join our current 10
PepsiCo is building a $180- million manufacturing and distribution facility in Pryor, Okla.'s MidAmerica Industrial Park.
distribution centers, plus the ones we plan to open in the future."
   Sigma said the $50- million facility will be highly automated and will initially employ 200 with plans to grow to 300.
   PepsiCo is building a $180- million manufacturing and distribution facility in Pryor's MidAmerica Industrial Park to produce Gatorade and Propel Fitness Water to serve South Central states. The plant, set to begin operations in September, is on a 165- acre (67- hectare) site and includes a 400,000- sq.- ft. (37,000- sq.m.) production facility and a 1.1- million- sq.- ft. (102,200- sq.- m.) distribution center.
   Chris Weber, plant manager of the new facility, says the Pryor site was chose because it lies in the heart of the new facility's distribution area. He says construction is progressing toward a fall 2007 opening. The plant, the ninth Gatorade facility in the U.S., will ship its products via truck, with 500 to 700 trucks pulling in and out of the facility daily.
   "There's a great work force in the area, and we're excited to work with the local community college and the technical schools in the area," he says.
   Oklahoma is the fifth- largest cattle producing state, so it's no surprise that its beef industry is growing. Smithfield Beef Group and ContiGroup Companies formed a 50- 50 joint venture to build a new beef processing plant in Texas County that will employ 2,500 to 3,000. Completion of the $200- million facility is scheduled to be complete by mid- 2008. The plant will process 5,000 head of cattle per day at full capacity.
   "We reviewed more than 30 potential locations in five states, met with local economic development and agricultural leaders, and visited a short list of 10 potential sites before deciding that Texas County is ideally suited for our new facility," said Richard V. Vesta, president and chief executive officer of Smithfield Beef Group.

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