ARKANSAS -- Site Selection magazine, July 2008

fter a nine-month, multi-state search, Miami-based Aero Maintenance Group chose the Arkansas Aeroplex in Blytheville for an airframe and engine repair facility for its Aviation Repair Technologies (ART) subsidiary.
      The Arkansas Aeroplex is a general aviation/commercial airport and industrial park developed on the grounds of the former Eaker Air Force Base, which closed in 1992. Like many former military bases, the site boasts a lengthy runway, in this case stretching to 11,000 feet (3,353 m.).
      ART is investing US$20 million to refit about 450,000 sq. ft. (41,805 sq. m.) of hangar space. The company plans to hire 310 people over the next three years at an average wage of about $20 per hour.
      "Our facilities needs are very specialized, and we didn't want to spend too much time building hangar space from scratch," say Ben Quevedo, Jr., director of business development of Aero Maintenance Group. "Most of the sites we looked at were commercial airports. Our intention is to do heavy maintenance on aircraft there, bringing in aircraft to the site. One of the main draws is the runway, which can accommodate any size aircraft. The location is very conveniently in the center of the U.S., and is close to Memphis, a major logistics hub."
      The Blytheville site will serve as the headquarters for ART, which already operates different types of aviation maintenance facilities in Atlanta, Dallas and Miami. The company also has other smaller operations in Florida, North Carolina and Tennessee, but the new site in Blytheville will be its biggest.
      ART will primarily service regional jets and twin turboprop planes such as the CRJ-200 and ATR-72. The company provides heavy maintenance, jet engine overhaul and other services for several operators in the U.S., including Federal Express, Delta Air Lines and American Eagle.
      "Every aircraft needs to go through certain checks to verify the integrity of their fuselages, so we need large hangars," Quevedo says. "Depending on their size, planes require 50 to 150 workers to take them apart, go through an inspection and put them back together."
      Quevedo says ART requires highly skilled labor, and is working with the University of Arkansas system to develop training programs as it ramps up its hiring process.

Industry Gains Thrust

      ART is just the latest example of Arkansas' burgeoning aviation and aerospace sector, which now accounts for more than 100 companies and approximately 10,000 employees. The industry is spread around the state, but has concentrations in the Little Rock and Hot Springs areas. It has also become the state's biggest source of exports, accounting for more than $1 billion in 2006. Also, eight community colleges and universities offer various types of industry training.
      Other recent aviation and aerospace projects in Arkansas include the following:

      Dassult Falcon is in the midst of expansion projects that will bring its Completion and Service Center facility in Little Rock to approximately 827,000 sq. ft. (76,828 sq. m.). The $30 million in expansions will add about 200 jobs at the site.

      KAT Manufacturing, a supplier of a variety of metallic products to the aerospace industry, is spending $2.4 million to refurbish an existing 68,000-sq.-ft. (6,300-sq.-m.) facility in Paris, just east of Fort Smith in the western part of the state. It will provide computer numerical control machining of aluminum, titanium, stainless steel, plastics, wood and additional materials used in the aerospace industry. KAT's primary client is Dassault Falcon Jet in Little Rock. Other clients include Lockheed Martin and the Department of Defense.

      American Eagle Airlines is expanding its maintenance facility at Northwest Arkansas Regional Airport (XNA) in Highfill, investing $10 million and creating up to 100 jobs over the next several years. American Eagle has operated a maintenance facility at XNA since 2004, employing 120 people. The new maintenance facility will be located in a hangar at XNA.

      HITCO Carbon Composites, is expanding manufacturing operations in Arkadelphia, halfway between Little Rock and Texarkana on I-30, adding more than 60 jobs over the next five years. The expansion represents an additional investment of $1.8 million, bringing total investments in Arkadelphia to more than $5.87 million.

India's Man Joins FDI Inflow

ndia's Man Industries was understandably eager to establish its first U.S. plant.
      Although American demand is surging for the company's petroleum-line pipes, the supply chain is gobbling up capital and time. Currently, Mumbai-based Man must ship its large, weighty products to the U.S. from its plants in India.
      Now, though, Man's American supply chain will be dramatically shortened with a new US$100-million plant in Little Rock that will also serve as the company's Americas headquarters. Slated to eventually employ 250, the facility on 162 acres (65 hectares) at the port on the Arkansas River will be up and running rapidly, as soon as early next year.
      One reason that Arkansas was able quickly to seal that deal was the $3.5 million in incentives that Man is getting from the state's $50-million Quick-Action Closing Fund (QACF). Signed into law a year ago, the QACF – and economic development in general – were major planks in Gov. Mike Beebe's successful gubernatorial run in 2006.
      "I truly believe that businesses, both internationally and domestically, are taking notice of the leadership in Arkansas," says Maria Haley, director of the Arkansas Economic Development Commission (AEDC)."For many years, Arkansas was not competitive, but we are once again competitive."
      The performance-based QACF subsidies have been particularly effective in finalizing deals with foreign firms. Man Industries marks the third major global player in the past year to pick Little Rock for a major expansion.
      In June of 2007, another large Indian pipe manufacturer, Welspun Gujarat Stahl Rohren, chose a 740-acre (296-hectare) site at the Little Rock Port for a 300-employee, $100-million production facility. A month later, LM Glasfiber, the Danish manufacturer of wind-turbine blades, chose the Arkansas port for a $150-million plant that will employ more than 1,000 workers within five years.

From Last to First

      Arkansas apparently had some serious selling to do with Man Industries. The Natural State ranked last on Man Industries' original list of possible sites, Man Industries Chairman Ramesh Mansukhani noted at the March 14th expansion announcement. A number of other states, including Louisiana, Mississippi and Texas, were positioned ahead of Arkansas, he said.
      "Then we changed our minds," said Mansukhani – about both Arkansas and the U.S. When the company began its first American site search, it was leery of the nation's environmental laws and its labor climate, he said.
      "After coming here, meeting the people, my impression is totally changed," he said at the Little Rock announcement. "I hope the great message for the world, particularly the developing country world, is the USA still having the great potential if you bring the plant."
      Little Rock and Pulaski County together are providing Man with $9.5 million in incentives that will go into infrastructure improvements at the site at the Little Rock Port.

– Jack Lyne