CRYSTAL CLEAR WORK FORCE ADVANTAGE: At Marvin Windows' plant in Grafton, N.D., a recent advertisement for 60 new positions was answered by 550 people.

Accent on Growth

Okay, enough with the Dakota jokes, north or south. Two recent rankings show that the pair pack more punch than punchline.
        First, an October ranking of areas based on a three-year business survival index places South Dakota first and North Dakota second in the nation. (Nebraska tied for fourth with five other states.) That same month, BusinessWeek picked out 12 "pockets of prosperity" by looking at low unemployment rates combined with continuing job creation. Bismarck and Fargo in North Dakota, and Sioux Falls and Rapid City in South Dakota, made up a full third of the dozen. Key to their stability has been growth in financial services operations.
        That sector's arrival coincided with the easing of interest rates in the 1980s. In Sioux Falls, Citigroup was the first, but was definitely not the last. Riding their own magic carpet have been telemarketers, who can operate from a home base there freed of sales or use taxes on interstate calls and also freed of restrictions on their operating hours.
        Drive across the region, and you're likely to see a host of gleaming agricultural steel, taking the form of silos, bins, gates, feeders and other devices. One of the makers of those products is growing right in the Sioux Falls area. Sioux Steel recently announced it would move its livestock product division to a 10,000-sq.-ft. (929 sq. m.) spec building in Lennox, then add on a 56,000-sq-ft. (5,202-sq.-m.) building of its own. Employment at the new facilities is expected to reach up to 55 by 2007. The company considered sites in four other South Dakota cities, as well as Rock Rapids, Iowa, before settling on Lennox, where another subsidiary, Koyker Manufacturing, already operates.
        In Pierre, no sooner had industrial service firm RPM & Associates moved into its new 35,000-sq.-ft. (3,252-sq.-m.) facility at Rushmore Industrial Park, than it decided to begin expanding some more. In conjunction with the South Dakota School of Mines and Technology and AeroMet Corp., it is building a Rapid Aerospace Manufacturing Plant.
        But the biggest project in the state in 2002 was the new $40-million mozzarella cheese plant in Lake Norden for Minnesota-based Davisco Foods, which has operated a food ingredient plant adjacent to the site for 19 years.
        "This plant is the largest single, free-enterprise investment in the history of South Dakota," Gov. Bill Janklow said at the groundbreaking. "Add to that the investment in dairy production facilities, cows, support services and the investment figures become even more phenomenal. The plant will initially support the milk production from 30,000 cows and eventually will expand to require the milk production from 75,000 cows. Land O' Lakes will market the cheese produced at the new plant and will partner with Davisco Foods in milk procurement for the plant, which will employ 60 initially.
        Not only will the milk products be a boon, but so will the extra volume of specialty whey protein isolates that the company will process at its existing plant from the new plant's whey byproduct. Davisco sells about 10 million pounds of whey protein isolates annually, accounting for 65 percent of the worldwide market. They are found in 50 percent of all grocery products, from dips to low-fast sauces, dressings and candies. The company operates five dairy plants in three states, produces more than 600,000 pounds of cheese daily and is one of the major suppliers for Kraft Foods.
        "It has been a very involved process, and we have worked closely with state and local governments to get to the point of this groundbreaking," said Mark Davis, CEO of Davisco Foods International. "What we have all learned is that this is a very large project for a very small town. Creating the necessary infrastructure and planning properly for the utilities was a challenge, and we wanted to do it right. We believe that the time we took with respect to the planning has paid off, and will result in an environmentally friendly dairy plant that will be second to none."
        "In today's highly competitive dairy industry environment, size, scale and operating efficiency are critical to success," said Land O' Lakes president and CEO Jack Gherty. "The new plant and our supply and marketing agreement address all three of those issues."
        Mike Strotheide, vice president of business development for the year-old North Dakota Department of Commerce, points out that North Dakota's relatively minuscule population of 620,000 is nonetheless its biggest asset. Perhaps next in line is the fact that North Dakota owns its own bank. One unique aspect of the state's overall package is the PACE program, which buys down the interest rate of loans, with a floor of one percent, and actually contributes money back into state legislature coffers, a practice it has maintained since the 1930s. There is also a local option economic development tax. Since its inception, the department has targeted value-added agriculture, advanced manufacturing, information technology, tourism and energy for further development.
        The state's 11 colleges are a ready resource, as is its overall population, with a high school graduation rate of well over 90 percent. Other attractive rates: the corporate tax rate has not risen since 1983; union membership in this right-to-work state is less than 10 percent; and electricity costs from 3.5 cents to 6 cents per kilowatt hour. In fact, while the state ranks sixth in the nation in energy production, it exports 60 percent of its power, and plans are in the works for three new plants to join the existing eight facilities statewide. Strotheide says that there is also another state resource being underused, as North Dakota holds the largest potential for wind power in the United States.
        Microsoft Business Solutions has gone from 15 to more than 1,000 team members at its Fargo campus, and recently made another foray with its purchase of Great Plains in Fargo. Back office operations from the likes of Aetna/US Healthcare have located there, as have high-tech manufacturers like disc-maker Imation and industrial equipment makers like Bobcat, which now employs more than 1,000 people. Bobcat supplier and John Deere subsidiary Phoenix International has built a new engineering facility at the heart of a new technology park in Fargo, and is working closely with the faculty and students of North Dakota State University. There have also been recent call center locations from SEI Information Technology, Rosenbluth International, Coventry Health Care and Sykes.

IN FARGO YOU CAN SEE TO INFINITY: Marvin Windows now operates more facilities in North Dakota than in its home state of Minnesota, including the newest addition: a 50,000-sq.-ft. (4,645-sq.m.) Infinity replacement window plant that opened in Fargo in October 2002.

        Strotheide feels that the loyalty of the North Dakota work force is beginning to be matched by a fierce sense of commitment from the corporations that employ those workers. There is only three-percent unemployment, but what he calls a considerable under-employment factor. That truth came to the fore when Marvin Windows recently advertised for 60 positions at its new facility in Grafton. The firm had to stop accepting applications when the number reached 550.
        Since being founded in 1904 just south of the Canadian border in Warroad, Minnesota, Marvin has become such a staple that even one of the state's famous lakes bears the name. Today, so do factories in Tennessee and Oregon. But Marvin now operates more facilities in North Dakota than in its home state, including a 400,000-sq.-ft. (37,160-sq.-m.) window and door plant and a 256,000-sq.-ft. (23,782-sq.-m.) window plant, part of a cluster of Marvin and its supplier facilities that employ some 1,300 people. The newest is a 50,000-sq.-ft. (4,645-sq.-m.) Infinity replacement window plant in Fargo, which opened in October 2002.
        "We made a very conscious decision to site our new facility in the Fargo area," said Dan Marvin, business manager of Infinity Replacement Windows, at the grand opening. "We've had a very successful partnership with the state of North Dakota and this community's leaders, work force and residents for more than a decade. They have made it a pleasure to do business here."
        "This community has several assets that make it an ideal climate for doing business ­ a highly-skilled labor force, an entrepreneurial-driven culture, a strong work ethic, and close proximity to a major interstate highway transportation system," adds company spokesperson Sheila Dunn.
        Asked what might be the biggest misconception about North Dakota from a corporate point of view, she gives the quintessential, guile-less, everything-on-the-table answer that may best sum up what the Plains States and their people have to offer:
        "We are not aware of any misconceptions."