Energy, biopharma and defense are obvious targets, but so are mainstays like food processing and distribution. Recent projects include a tortilla plant by Mexico's Gruma SA de C.V. in Wilkes-Barre and a $27-million yogurt factory in Johnstown Industrial Park from Greece's FAGE Dairy Industry S.A. Both Gruma and FAGE intend to house distribution operations at their sites.
      In recent months, Finland's Raflatac, Inc., a maker of self-adhesive labels, leased 60,000 sq. ft. (5,574 sq. m.) of production and distribution space near Wilkes-Barre. British stair-lift maker Minivator Limited has established a small distribution site at Pocono Mountain Business Park."Our region has 30 million square feet [2.79 million sq. m.] of logistics space under roof," says Jim Cummings, president of Penn's Northeast, a multi-county partnership. The figure may grow larger as Dollar Tree contemplates a 45-percent

Pennsylvania Dept. of Community and Economic Development Pennsylvania General Assembly

expansion to its 603,000-sq.-ft. (56,019-sq.-m.) distribution complex outside Berwick, which opened in 2001. Steve White, the company's chief logistics officer, says the site's rock-bottom employee turnover and strong sales growth in its service area are driving the Virginia-based company's interest in growing the center. "It's one of our top performing buildings," says White, who expects a decision by the end of 2005.

      Despite natural geographic advantages, strong infrastructure and diligent manpower, Pennsylvania businesses struggle with high tax and worker's compensation rates, two challenges Gov. Rendell hopes to address in the final 18 months of his current term.
      "Our workmen's comp rates have come down significantly, though we're not exactly where we should be," he says. He'll continue trying to trim the state's corporate net income tax rate from 9.9 percent to 7.9 percent. Those efforts, he says, have been stalled by the business lobby's reluctance to simultaneously close tax loopholes.
      But more policy action is needed if Pennsylvania is to reclaim manufacturing jobs lost over the last decade, according to Republican state representative Mike Turzai, who represents Pittsburgh's northern suburbs and serves as chairman of the House Commerce Subcommittee on Economic Development. His Keystone Manufacturing Initiative (KMI) includes provisions to remove the cap on net operating loss carry-forwards, reduce frivolous litigation, tighten eligibility for unemployment benefits, further strengthen worker's comp reform and relax restrictions on healthcare savings accounts.
      "What we need to do is lower the overhead costs faced by Pennsylvania employers," explains Turzai.