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UPPER MIDWEST
From Site Selection magazine, September 2024
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Getting Saucy In The Great Lakes

The world’s top soy sauce producer makes an $800 million bet on Wisconsin.

UPPER MIDWEST
Kikkoman Foods has announced two capital investment projects in Wisconsin, including a new greenfield plant in Jefferson, whose arch bridge is a gateway into a historic downtown.
Images courtesy of Kikkoman Foods Inc. and Thrive Economic Development.

by RON STARNER
T

he next time you go out for sushi, you may want to thank a Japanese company that had the foresight to establish a food manufacturing plant in Wisconsin a half century ago.

Kikkoman Foods Inc., the Noda, Japan-based company that has been selling soy sauce in the U.S. since it opened its first overseas sales office in San Francisco in 1957, helped Americans develop a taste for Japanese cuisine and condiments when it launched its first production line in 1973 in Walworth, Wisconsin, on the southwestern tip of Geneva Lake near the Illinois state line. Though the company was formed in 1917, its roots date to the 1600s.

Today, Kikkoman is doubling down on its investment in Wisconsin by expanding at two sites in the Badger State — one in Walworth and one in Jefferson, located about halfway between Milwaukee and Madison.

Did-You-Know600x.pngSource: Kikkoman Corp.

Wisconsin Gov. Tony Evers announced April 23 that the Wisconsin Economic Development Corp. (WEDC) had approved a $15.5 million performance-based tax credit to help Kikkoman expand. The company plans to invest $800 million to expand its soy sauce brewery operation in Walworth and build a new plant in Jefferson. The firm said it will add 83 new high-wage jobs over the next 12 years in Wisconsin.

Kikkoman, which leads the world in soy sauce sales with revenues of $4.55 billion in 2023, has seen that first Wisconsin plant that opened 51 years ago in Walworth become the highest-producing soy sauce facility in the world. Coming less than three decades after the end of World War II, the plant was one of the very first production facilities built in the U.S. by a Japanese company.

That plant was so successful that Kikkoman opened a second U.S. production facility in 1998 in Folsom, California. As demand worldwide for Kikkoman Soy Sauce increased, the firm spent the last several years scouring the country to find the right place for a third U.S. factory. The company, which has a market capitalization of $11.39 billion, found that spot on a 100-acre site in Jefferson County.

“Fifty years ago, Kikkoman made history by choosing Walworth, Wisconsin, for its first international brewing plant,” said WEDC Secretary and CEO Missy Hughes. “Now Kikkoman is opening a new chapter in that history by expanding its presence in Walworth and Jefferson.”

Yuzaburo Mogi, honorary CEO and chairman of the board of Kikkoman Corp., said, “We have always valued Walworth for its great market access, outstanding workforce, central location for raw materials, pure water and the open-hearted spirit of partnership of the local community. We chose Jefferson for those same reasons, and we look forward to expanding our footprint in Wisconsin and establishing a supply chain with increased stability in North America, Kikkoman’s largest overseas market.”


Google1 (600web).jpegIndiana Secretary of Commerce David Rosenberg speaks at the Google data center announcement in Fort Wayne.
Photo courtesy of IEDC

From Rust Belt to Gold Mine: How the Midwest Became a High-Tech Haven

From AI-driven hyperscale data centers to record-breaking food and beverage processing investments, the Upper Midwest is hauling in economic development wins on a scale not seen before in U.S. history. Add to that mix semiconductor supply chain projects, record-setting logistics plants, and massive new facilities for electric vehicle and battery production, and you begin to see the picture: This is not your grandparents’ Rust Belt.

You don’t have to be a rocket scientist to understand that things are different today across the region. In fact, you don’t have to be a scientist at all. Consider what’s happening right now in northeast Indiana, where Google is investing $2 billion to build the next generation of data centers and further cement the Midwest as a digital age leader.

The world’s leading search engine loves the Midwest so much that it’s spending unprecedented sums to create the most advanced data centers on the planet not in London, New York or Tokyo, but in places like Council Bluffs, Iowa; Fort Wayne, Indiana; and Lancaster, Ohio.

On April 26, Google broke ground on its $2 billion project to construct Project Zodiac — a 12-building data center campus on 700 acres — in Fort Wayne. “We are thrilled to announce our investment in Fort Wayne as the site for our newest data center,” Joe Kava, Google global data centers vice president, said. “Our decision to make a commitment of this magnitude is a true testament to the strategic and collaborative nature of many leaders across Indiana, Allen County and Fort Wayne.”

How IEDC Tipped the Scales
While northeast Indiana is not an area normally associated with data centers, AI hyperscalers are changing the construct of what a prime data center location looks like. Brock Herr, senior vice president of business development at the Indiana Economic Development Corp., said it took a year of conversations to convince Google that northeast Indiana was the perfect fit for Project Zodiac.

“It took intensive, collaborative work in Fort Wayne and Allen County,” says Herr. “We expedited the process and showed them we have reliable, scalable power. Site entitlements and speed to market are critical for a firm like Google. The market and customer demand require them to go faster. It was a collaborative sprint to facilitate land acquisition and state incentives. This large and exciting project unfolded quickly.”

Ben Townsend, head of infrastructure and sustainability at Google, tells Site Selection that “Indiana presented a great opportunity for us to grow. Our newest data center campus will be in Fort Wayne. The determining site selection factors came down to resources, infrastructure, and the ecosystem partners including IEDC.”

Townsend says, “It takes a lot of pieces from infrastructure, energy and workforce to make a transformative project become reality. It was serendipitous how it all came together in Indiana. I am an Indiana born and raised engineer. This project will inspire other Indiana kids to pursue a similar career.” He adds that “on a global scale, Fort Wayne and Northern Indiana had the special attributes we needed.”

Around the Midwest, Google is investing heavily into expansive data center campuses in Indiana; Columbus, Lancaster and New Albany, Ohio; and Council Bluffs, Iowa, where Google just announced an additional billion-dollar investment.

Townsend says that Google likes the Midwest because “it has great availability of wind and solar resources. We encourage other regions of the country to think about our carbon-free ambitions. Our sustainability research partnership with Purdue University to use Google AI to explore decarbonization of industrial buildings is a key part of our collaboration in Indiana. We will keep investing in our partnership with Purdue.”

AWS, Meta & Microsoft Join the Party
Herr says Project Zodiac was a competitive deal, “but we are not able to confirm who we were competing against. We learned Google projects are very competitive across multiple states, but we’ve also learned that speed to market serves Indiana well.”

Google is not alone in Indiana, either. Amazon Web Services announced an $11 billion data center investment in St. Joseph County on April 25, while Meta broke ground on an $800 million data center project in Jeffersonville earlier this year.

“This has been a record-setting year for data center projects in Indiana,” says Herr. “We are now into the phase where Indiana is scaling itself as a hyperscale data center location. For example, Microsoft just announced a data center project in La Porte for a hyperscale facility. In each case, accessibility and reliability of power and water utilities were driving factors in why we won these deals.”

Another crucial component, Herr adds, is the state’s data center sales tax exemption. “Without that incentive, it would make it financially prohibitive to do these projects.”

Google2 (600web).jpegPurdue University and Google announced a partnership that seeks to develop innovative solutions for eco-friendly industrial buildings.
Images courtesy of Purdue University

google-purdueLO (600web).jpg (l. to r.) Joe Sinfield, civil engineering professor and director of Purdue’s Institute for Innovation Science; Travis Horton, civil engineering professor; Ben Townsend, Google global head of infrastructure and sustainability; Alyssa Wilcox, Purdue senior vice president of partnerships and chief of staff.
Images courtesy of Purdue University


Wisconsin Wins Kikkoman with the Basics
Deb Reinbold, president and executive director of Thrive Economic Development, the Jefferson County Economic Development Consortium, says that “timing was important to Kikkoman. It came down to how quickly we could put all the infrastructure together to meet their needs. It was in the City of Jefferson, and all utilities ran to the site. They have 40 megawatts of power available here at a lower rate because it is a local utility. WPPI is the local electric company, which means they can trade between utilities. And we are able to meet all of their wastewater needs.”

Kikkoman broke ground on the $560 million, 240,000-sq.-ft. facility in Jefferson in June and plans to begin shipping soy sauce from that location in fall 2026. WEDC added a new Enterprise Zone designation for the Kikkoman plant, bringing to 20 the number of such zones around the state.

2023-Ford-Super-Duty-F-450-XL-Max-Tow_600x.jpgAdding F-Series Super Duty pickup assembly in Canada means Ford Motor Co. is also growing at U.S. component plants that support Super Duty production, including $24 million in Sharonville, Ohio; $1 million and 20 jobs in Rawsonville, Michigan; and 50 new jobs at its Sterling Axle Plant in Michigan.
Photo courtesy of Ford Motor Co.

In an exclusive interview with Site Selection, Osamu Mogi, representative director and senior executive corporate officer for the International Operations Division of Kikkoman Corp., spoke with me by Zoom from his office in metropolitan Tokyo. He said that the three most important site selection factors for Kikkoman are logistics, environment and workforce.

“Soy sauce is a heavy and expensive product, so we look for logistics advantages when we are locating a plant,” he says. “We need a safe and clean environment. We don’t want to have to worry about contamination. As a food manufacturing company, we require good natural surroundings. We do not want to be in a heavy industrial park. The Jefferson site is dedicated to food research and manufacturing. We feel very safe there. The site meets all criteria. It is large and flat with water and gas, and it is close to Interstate 94.”

Quality workers and a helpful government sealed the deal, he notes. “We need a quality workforce, and Wisconsin is known for its high-quality workers,” says Mogi. “The local government was very helpful.”

Mogi says the incentives were helpful too but not the main reason for the site choice. “We are fortunate to have incentives from the state and local communities, but they were not the deciding factors. We might have chosen this site anyway. Incentives help to start up a new facility, but logistics is the most important factor.”

Mogi adds that the new plant needed to be “close enough to achieve good alignment with our existing Wisconsin plant. We hired a site selection agent who contacted states to make a long list of locations. We had 64 possible locations on our list and half were in Wisconsin. We appreciate our relationship with Wisconsin for over 51 years, so we worked with the state to find the land that met our requirements. I would like to thank Missy Hughes and all the other officials at WEDC. We know we can count on the workforce of Wisconsin.”

Mogi says his firm is not done growing in the U.S.

“The U.S. market is 25 times larger than Japan,” he notes. “That is why, from the beginning, logistics was the most important factor. There were discussions about building our new plant on the West Coast, but instead, management chose Wisconsin because it is right in the center of the U.S. If we were to choose just one location, we would choose Wisconsin. We are enjoying a 5% increase in demand in the U.S. every year. We will continue to invest in our manufacturing operations as we expand our space, but we also plan to expand in Europe and Asia.”

A Sign of the Changing Times
At $800 million, the Kikkoman expansion in Wisconsin ranks as one of the five largest capital investment deals in food manufacturing in America over the past five years, per the Conway Projects Database, a corporate facility tracking tool of Site Selection and its parent Conway Data Inc. in Atlanta. The Kikkoman project is also one of 20 corporate facility deals announced by Japanese companies in the Upper Midwest region of Wisconsin, Michigan, Minnesota, Illinois, Indiana and Iowa since 2019.

Quentin Messer, the president, CEO and chair of the Michigan Economic Development Corp. (MEDC), says it is no secreat why Japanese CEOs love the Upper Midwest.

“Toyota has been here for 50-plus years. They want to be in a place where culturally they are comfortable,” he says. “We have a vibrant Japanese community in Novi. They know that when they come to Michigan, we are focused on building a relationship with them. It is not just transactional. We make it easy to say yes.”

Case in point is FANUC America, a Japanese-owned company that on July 10 officially opened its new $110 million West Campus facility in Auburn Hills, Michigan. The 650,000-sq.-ft. complex will be used for robotics manufacturing.

“This major expansion represents our growth strategy in the U.S. and our steadfast commitment to the future of the automation and robotics industry,” said Mike Cicco, president and CEO of FANUC America.

According to MEDC, more than 5,300 jobs and $1.8 billion in private investment have come to Michigan from Japanese companies in the last 10 years. There are currently 456 Japanese facilities in Michigan supporting nearly 40,000 jobs statewide, per the Japanese Consulate in Detroit.

Mr_Osamu_Mogi

We are fortunate to have incentives from the state and local communities, but they were not the deciding factors. Logistics is the most important factor.
Osamu Mogi, Senior Executive Corporate Officer, International Operations Division, Kikkoman Corp.

Messer says corporate facility investments like this happen because state leaders prioritize high-value deals from other parts of the globe.

“We opened a trade office in Taiwan. Gov. Gretchen Whitmer has been to Japan, South Korea and Taiwan,” he says. “This effort to attract FDI comes from the highest office in our state. About a year ago, the governor and MEDC announced a new economic development strategy called ‘Make It in Michigan.’ At some point, you have to go out and compete.

“We aim to compete for the newest technology and make sure those industries see the value in locating in Michigan,” he says. “This is a great time to be in the Midwest.”

Ron Starner
Executive Vice President of Conway, Inc.

Ron Starner

Ron Starner is Executive Vice President of Conway Data, Inc. He has been with Conway Data for 22 years and serves as a writer and editor for both Site Selection and the company's Custom Content publishing division. His Twitter handle is @RonStarner.

  



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