Week of March 4, 2002
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from Site Selection's exclusive New Plant database
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How Swede It Is: IKEA's Two Baltimore Facilities Adding 580 JobsBy JACK LYNE, Site Selection Executive Editor of Interactive Publishing
PERRYVILLE and WHITE MARSH, Md. - As part of the run-up to its aggressive expansion of its North American retail network, IKEA is rapidly enlarging its presence in the Baltimore metro. The grand opening of its 180-employee call center in White Marsh came only a few weeks after the Swedish furniture maker broke ground on a massive 1.7 million-sq.-ft. (153,000-sq.-m.) distribution center in Perryville that will employ 300 to 400 workers.
With 58,000 employees, IKEA has established a global network that spans 180 stores in more than 30 countries. Its North American presence, though, has remained relatively modest, with only 15 stores.
That will be changing. The two new Baltimore-area facilities are part of the company's plans to rapidly increase its North American presence, adding 50 stores over the next 10 years.
Lt. Governor: Project 'Good
IKEA's 131-acre (52.4-hectare) distribution center site was once home to a 43-acre (17.2-hectare) polyvinyl chloride (PVC) production plant. Firestone Plastics and, later, Occidental Chemical owned the site, operating the PVC plant from 1968 until its 1982 closure. Maryland and federal officials later found environmental contaminants on the property. A voluntary cleanup in 1998 cleared the site of pollutants.
"We are pleased about this mutually beneficial opportunity," IKEA North America Real Estate Specialist Brad Prevost said of his company's location choice.
The Cecil County area's labor force and its access to the port of Baltimore, the second-largest largest U.S. port in cargo volume, were major factors in the decision, Prevost explained. "Perryville's direct port access, as well as its labor force, will help us further meet consumer demand for our product in the Maryland, Washington, D.C., and Pennsylvania regions, while providing renewed energy and economic vitality to Perryville," he said.
IKEA will receive property and income tax credits by virtue of its chosen site, which is part of a state enterprise zone. Those benefits were an important consideration, Prevost noted. The incentives offset the $5 million the company paid for a 131-acre site larger than what IKEA needed, he explained.
Smart Growth Supporter Gov.
"The entire region benefits from having an international distribution center like IKEA locate in Cecil County," the governor said. "Best of all, by focusing our economic development in a Smart Growth area, we are bringing 350 new jobs to Maryland without sacrificing any of our precious farmland."
IKEA will, however, have to destroy some wetlands on the site to build its massive facility, company officials allowed. But IKEA, which has a history of environmental activism, will create other new wetlands elsewhere, they said.
The company also appeased concerns that some local residents had voiced over the facility's proximity to Chesapeake Bay. In response, IKEA is donating some 20 acres (eight hectares) of the site to a preservation group.
When construction is completed, the Perryville distribution center will be 800 feet (24.3 meters) wide and 2,640 feet (801 meters) long. The first 850,000 sq. ft. of the center, however, should go online as early as the summer of 2002, IKEA officials said. The operation will employ 250 workers when it opens after completion of first-phase construction.
The fully built-out 1.7 million sq. ft. center will rank as one of the five largest corporate structures in Maryland, some state business analysts noted. Even at its half size of 850,000 sq. ft., IKEA's operation will be the largest in Perryville, said Mayor Steve Pearson, who called the project "the most significant economic development initiative in our town in several decades."
Call Center Covers All of North AmericaBy comparison, IKEA's new Baltimore-area call center is considerably smaller, covering 40,000 sq. ft. (64,000 sq. km.). The facility nonetheless fills a central role in the company's operations - particularly in light of IKEA's expansion plans. The White Marsh center handles the company's catalog sales and customer service needs for all of North America.
The new call center is using one of IKEA's own products. The center's 180 employees work at the company's "sit-stand" workstations. Those workstations accommodate employees' standing or sitting when working, facilitating position changes that reduce back, knee and shoulder strain. The workstations inside the White Marsh call center are also adjustable to conform to individual employee's height - a significant consideration with workstations shared during shifts. A lever allows users to vary the desk surface height by more than 14 inches (35.6 centimeters).
IKEA's new center positively varies Baltimore County's economic fortunes, County Executive C. A. (Dutch) Ruppersberger asserted at the facility's grand opening.
"IKEA's customer care center is part of a growing customer service center industry in Baltimore County. That's great for our local economy," Ruppersberger said.
The newly opened facility also strengthens the neighborhood, Ruppersberger added.
"We've been working hard to build better neighborhoods in Baltimore County, and to do that you must have a solid business base." he said. "We're glad IKEA has chosen a home here in White Marsh."
West Coast IKEA Center
More diffuse site selection action is coming, however, given the company's planned North American expansion blitz.
Part of that action, in fact, is already unfolding on the opposite coast. IKEA recently opened the 850,000 sq. ft. completed in first phase of building its new distribution center in Tejon Ranch, Calif.
Like the Perryville center, the California facility will span 1.7 million sq. ft. when construction is completed. Located 60 miles (96 kilometers) north of Los Angeles, the Golden State operation will serve as IKEA's distribution hub for all of western North America.
©2002 Conway Data, Inc. All rights reserved. Data is from many sources and is not warranted to be accurate or current.