North Carolina
NORTH CAROLINA
From Site Selection magazine, September 2008

Is Tar Heel Blue The New Green?
Proximity to talent and to transport make
North Carolina a sustainable choice.

G
oing green has more companies seeing blue – as in Tar Heel blue.
      A combination of a central Mid-Atlantic location, strong logistics network of roads and airports, and high-tech talent has Corporate America seeing potential fuel and electricity cost savings by locating facilities in North Carolina.
      At the new $40-million RalphLauren.com fulfillment center in High Point, all three of those factors came into play as part of a "very complicated matrix" of site selection criteria, says Ralph Wear, senior director of operations for the high-end clothing retailer.
FedEx Plane
The new FedEx Mid-Atlantic Hub is scheduled to open at Piedmont Triad International Airport in 2009. The project, 10 years in the planning and making, is already serving as a magnet for manufacturing and distribution operations in the region of Greensboro, High Point and Winston-Salem.
RalphLauren.com
RalphLauren.com opened its $40-million fulfillment center in High Point in April and already has 215 workers – attaining that hiring milestone 30 months ahead of schedule.

      "We conducted a six-state search," says Wear. "We looked at Virginia, Kentucky, Georgia, Tennessee, South Carolina and North Carolina. The economic drivers behind our final location decision were the local work force, proximity to our number one shipper FedEx, and proximity to other supply-chain organizations."
      The 330,000-sq.-ft. (30,657-sq.-m.) plant opened in April and already has 215 employees fulfilling customer orders from throughout the U.S. and abroad, attaining that hiring milestone two and a half years ahead of schedule. The seasonal work force can climb as high as 550.
      More than 2,000 people applied for the 60 positions at the facility's customer contact center, which is one of the most modern and high-tech in the country.
      The plant is located just 13 miles from the 170-acre (69-hectare) FedEx Mid-Atlantic Hub at Piedmont Triad International (PTI) Airport, scheduled to open in 2009.
      "Being near a FedEx Hub was an important consideration for the company," notes Wear. "The RalphLauren.com facility is designed to support annual volumes of 1.6 million orders and 5.2 million units."
      The FedEx Hub will be a major driver of commerce throughout the Piedmont Triad region, according to Ted Johnson, director of the PTI Airport Authority.
      "We have the largest Dell plant in the world in nearby Winston-Salem. We have the new international headquarters of HondaJet right here at the airport. We have major facilities,
Ted Johnson
Ted Johnson, director of the PTI Airport Authority
on airport property, for TIMCO, Cessna, Lincoln Financial, the Bill Davis Racing Team, Atlantic Aero, Koury Aviation, Landmark Aviation, Tradewinds and others," says Johnson. "We have 4,000 acres [1,620 hectares] of land, 75 daily flights and 19 destinations."
      For Wear, those facts added up to a sweet deal for RalphLauren.com. "With our inbound and outbound freight and a majority of our business coming from the East Coast, we had to look at every aspect of our supply chain," he adds. "The presence of the air hub so close to our site was critical."
      In another part of the state, going green means finding a new way to build a data center – which is exactly what IBM is doing at Research Triangle Park in Durham County.
      On Aug. 1, IBM announced plans to build a $360-million, state-of-the-art data center at its existing complex in RTP. The energy-efficient data center will be built by recycling 90 percent of materials used from the company's previous center, will feature IBM's latest water-cooling technology and will use renewable energy.
      "This new data center is part of IBM's commitment to construct the world's most advanced data centers," said Bob Greenberg, general manager of IT optimization and North Carolina senior state executive at IBM.
      The first phase will feature 60,000 sq. ft. (5,574 sq. m.) of raised floor space on a site that can potentially be expanded in modular increments. The data center will leverage an industry-leading cooling system that will allow it to respond to varying cooling requirements of the IT equipment in real time.
      The center's mechanical system is designed to be 50 percent more efficient than the industry average, and the building's use of alternative energy is expected to reduce carbon dioxide emissions by 1 million pounds per year.

East Meets East
      Lenovo, the Chinese company that acquired IBM's Thinkpad line of laptop PCs (right), has its corporate headquarters in Raleigh, and a plant in Mooresville, near Charlotte. Its newest project is a U.S. East Coast assembly and distribution center in Guilford County's Rock Creek Center in Greensboro.
      "With rising fuel costs, the right talent mix here, and our proximity to our corporate headquarters in Raleigh and our existing plant in Mooresville, it made the most sense to choose Greensboro," says Ken Grissom,
Lenovo ThinkPad X61
general manager of the company's U.S. Fulfillment Center and Global Supply Chain in Greensboro.
      Access to Interstates 85 and 40 and the rapidly growing PTI Airport sealed the deal for Lenovo, whose $10.5-million, 272,000-sq.-ft. (25,269-sq.-m.) plant opened in late February.
      "From site selection to opening, it took just 279 days," says Grissom, who oversees 134 employees in two shifts that pay an average annual wage of $37,500.
      Lenovo also assembles desktop computers and video monitors at the plant. "We do light manufacturing, fulfillment and custom-staging of various Lenovo products here at this plant," notes Grissom. "A lot of our customer base is in the Northeast U.S. corridor, which is very accessible via the Interstates and PTI Airport."
      Lenovo is one of several Asian companies that have expanded operations in the Tar Heel State. Honda Aircraft Co. is developing a $100-million, 300-job world headquarters and aviation manufacturing plant at PTI Airport, while Honda Aero Inc. will produce the engines for the new HondaJet at a $27-million factory that will open in 2010 at the Burlington-Alamance Regional Airport.
      KobeWieland Copper Products, a joint venture of Kobe of Japan and Germany's Wieland, is expanding its manufacturing plant in Stokes County by $71 million and 65 jobs. Bonset America, a subsidiary of C.I. Kasei Company Ltd. of Tokyo, is investing $20 million and adding 20 jobs in Browns Summit, where the firm produces heat-shrinkable films used in packaging.
      HCL Technologies Ltd., an Indian IT services company, announced Aug. 5 that it will invest $3.2 million and create 513 jobs over five years in Wake County. The new delivery center will offer application development, engineering services and consulting to U.S. customers. The Research Triangle location beat out Arizona and Texas to land the high-tech project.

Energy Sector Pays Dividends
      The biggest payday of all, however, is coming from GE Hitachi Nuclear Energy in Wilmington, where the Japanese-American alliance will invest $704 million and create 900 jobs at a 1,600-acre (648-hectare) campus.
      The company plans to build a commercial uranium-enrichment facility that would use a new laser process the firm has exclusive rights to develop and commercialize.
      Global Laser Enrichment, a subsidiary of GE Hitachi Nuclear Energy, would build the plant. "This is a key milestone in GLE's development process," says Tammy Orr, president and CEO of GLE. "With the selection of the Wilmington site for a potential commercial facility, we can now move forward with the Nuclear Regulatory Commission's licensing process."
      The cutting-edge, laser-enrichment, isotope-separation technology allows GE Hitachi to become further integrated in the nuclear fuel cycle. Wilmington-based Global Nuclear Fuel-Americas, a joint venture of GE, Hitachi and Toshiba, is already involved in the fuel cycle.
      No new types of hazardous materials will be added to the GE Hitachi plant site, according to Orr, noting that the average annual wage at the new plant will be $85,000.
Ralph Wear
The economic drivers behind our final location decision were the local work force, proximity to our number one shipper FedEx, and proximity to other supply-chain organizations.

      If the company creates the jobs called for under the terms of a 12-year agreement with the state, the firm could receive up to $25.7 million in state assistance through the Job Development Investment Grant. GE Hitachi also received a $900,000 grant from the One North Carolina economic development fund, plus more than $10 million in local incentives.
      The state estimates that the project will generate a cumulative gross product of $3.07 billion, produce net state revenue of $62.2 million and contribute up to $8.57 million to the North Carolina Industrial Development Fund over 12 years.
      Jim Fain, secretary of the North Carolina Department of Commerce, says the GE Hitachi deal "is a good example of our focus on encouraging the expansion and recruitment of knowledge-based companies in targeted industry sectors. We already have a solid nuclear energy sector here, and it is growing."
      In fact, the power generation industry is contributing to an emerging cluster of engineering firms in North Carolina. Thanks in large part to a ready supply of industrial engineers graduating from universities in Charlotte, Raleigh-Durham, Atlanta and even as far away as Blacksburg, Va., North Carolina is reaping a bumper crop of companies doing business in the power-generating sector.
      The Shaw Group out of Louisiana is locating about 1,000 jobs in the Charlotte area, mostly in the power engineering sector. URS Corp. recently acquired an unused HSBC building in Lancaster County, S.C., where the firm will initially place about 100 workers and eventually grow to 400 employees in the Charlotte market. And Fluor Corp. is adding about 150 workers in its power generation engineering group in Charlotte.

Many Corridors Show Growth
      Mark Vitner, director and senior economist for Wachovia, says that jobs such as these are evidence that North Carolina's economy is growing at a faster rate than both the Southeast economy and national averages.
      "North Carolina has one of the stronger economies in the Southeast, and most of the growth is occurring in Charlotte and the Raleigh-Durham area," says Vitner.
Honda Aircraft
Honda Aircraft Co. is developing a $100-million, 300-job world headquarters and aviation manufacturing plant at PTI Airport. Honda Aero Inc. will make the engines for the new HondaJet at a $27-million factory at the Burlington-Alamance Regional Airport.
"As banking has slowed, the utility business has picked up. Duke Energy has a number of power plants going up right now, and downtown Charlotte has the lowest vacancy rate ever recorded – 1.6 percent overall, and just 0.2 percent for class A office space."
      The Charlotte MSA added 34,000 jobs in 2007 and is on pace to add another 18,000 this year, Vitner says. "Statewide, job growth will be around 50,000 this year. Most of that growth will be centered in the Raleigh and Charlotte areas," he notes. "Wilmington and Asheville are both holding up well, and the Piedmont Triad region is landing the really big projects, like HondaJet and Honda Aero building the jet engines."
      Vitner advises corporate executives to keep a close eye on Kannapolis and Cabarrus County, where the North Carolina Research Campus (NCRC) gained momentum this year with several major project announcements.
      "The plan for the biotech campus is a real game-changer," the economist says. "I've never seen a project that had this much financial and institutional backing. David Murdock has put about $1.5 billion of his own money into it. Five companies have already announced they are going into this park, and more are on the way. The Core Lab Building was just completed. My prediction is that this project will be very successful and will be a permanent growth driver for the region."
      Since Vitner's prediction in mid-July, two more companies joined the roster at the 350-acre (142-hectare) NCRC. Sensory Spectrum announced July 16 that it will employ up to 35 sensory scientists, psychologists, technicians and administrative staff at a new office. The company facilitates the integration of consumer and product understanding for the food, beverage, ingredient, personal and oral health care, and nutrition industries.
      On Aug. 7, Laboratory Corp. of America announced that it will occupy a 40,000-sq.-ft. (3,716-sq.-m.) bio-repository in Kannapolis. The facility, operating in partnership with the Translational Medicine Institute at Duke University, will include storage to hold more than 10 million specimens, which will be brought in by pharmaceutical companies, universities and other researchers.

Power of the Triangle
      The year's largest pharmaceutical announcement in North Carolina came from Merck, which unveiled plans June 18 for a $300-million expansion of its vaccine manufacturing complex in Durham.
      The New Jersey company said it will add up to 180 positions at the plant in Durham's Treyburn Corporate Park. Since 2004, Merck has announced investments totaling $700 million at the complex.
      "As we lose jobs in the less skilled sector, we are building them up in the knowledge sector and educating our people as they transition to these new jobs," North Carolina Gov. Mike Easley said. "We are strategically targeting the biotech and pharmaceutical industries because of the huge growth possibilities."
      Just five days later, a Canadian drug company issued an announcement of its own. Patheon, an Ontario-based provider of drug development and manufacturing services to the pharmaceutical sector, announced it had selected locations in Research Triangle Park and Durham for its global headquarters and lab space.
      Patheon said the RTP facility should open by September, while the lab will initially offer stability studies, validation testing and analytical chemistry services in support of current company operations in Cincinnati.
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