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SEPTEMBER 2005

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Business Cost Advantage
Food processors are the beneficiaries of research and analysis conducted at Oklahoma State University in Stillwater.

    Generally lower business costs and an ideal location from a logistics standpoint are two of Oklahoma's competitive advantages. To the first point, Enid-based food processor Advance Food Co. is growing its substantial presence in the state rather than expand plants in other locations.
      Besides its five Enid facilities, "We have plants in Tennessee, Pennsylvania and Iowa, so we have broad experience with which to compare this area and others," says Pete Dillingham, general manager, cooked products. Dillingham first credits the area's strong labor supply; Advance employs 1,300 in the Enid area. "The overriding advantage is that we have very reasonable utility costs," he points out. "Our overall energy costs make it very advantageous to be here relative to the rest of the country. They're three to four percent lower than other locations."
      Which is one reason Advance is building its next facility in Enid to meet production demand stemming from growth of about 20 percent per year for the past decade. The new, 200,000-sq.-ft. (18,580-sq.-m.) facility will mean the distribution center also will have to be expanded, all of which should be complete in 2007.
     
Oklahoma's location advantage to distribution center owners is clear: the state is smack in the middle of the U.S. on an east-west basis and adjacent to one of the fastest-growing parts of the country, the Dallas-Fort Worth metroplex in north-central Texas. Depending on their retail store network, distributors can service much of the country, and many of them do.
      "We're delivering goods out of this facility to stores in 15 states," says Edwin Boothe, director of distribution at a recently opened Big Lots facility in Durant, Okla., just 20 minutes from the Texas border. "Most of the stores are in Texas and Oklahoma, but logistically, it made a lot of sense to [locate in Durant] to service the stores in the central states." The 1.2-million-sq.-ft. (111,480-sq.-m.) center serves nearly 250 stores. It's designed to serve as many as 400.
      The center employs 300 people with fewer than 20 of them coming to Durant from Texas. In fact, most of the Big Lots employees had been commuting to Texas, "because that's where the jobs were," says Boothe. "We did a wage survey and an available workforce survey before we made the decision to locate here," says Boothe. "Durant was appealing in that with our wage rate and with the incentives from the state and the agreement as to what would be the starting salary, for the most part we're higher than most other businesses in Durant," he adds, which makes Big Lots an employer of choice. "We felt we had an advantage there. It's worked out well, and we increased our starting wage last year. We make adjustments based on the market."
     
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