Week of February 11, 2002
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Barley Seals Deal
Grupo Modelo Heads North, Picks Idaho Falls for $64 Million Plant
The deal sealer was barley. Grupo Modelo selected Idaho because of the stability, quality and availability of its two-row irrigated barley, company officials explained. Up to 58,000 acres (23,300 hectares) of barley will be needed to meet the new plant's processing needs, Grupo Modelo executives said.
Idaho knows barley. It ranks as the No. 2 U.S. state in barley production and is No. 1 in the U.S. West. Idaho growers harvested 730,000 acres (292,000 hectares) of barley valued at almost $150 million in 2000 (the most recent year for which totals are available).
Trade Mission Sowed Deal's SeedsThe deal had its genesis in Gov. Dirk Kempthorne's May 2001 trade mission to Mexico. Kempthorne met with Grupo Modelo officials during his meeting with U.S. Ambassador to Mexico Jeffrey Davidow in Mexico City.
"Idaho's trade missions are resulting in sales," Kempthorne said in announcing Grupo Modelo's decision.
"This business deal is a direct result of our international efforts in Mexico," said Idaho Dept. of Agriculture Director Pat Takasugi. "The governor paved the way with his 2001 trade mission, and many others have continued working to make this deal a reality."
Landing the Grupo Modelo project marked Idaho's second strong shot of recent good news from the brewery business. Anheuser-Busch recently announced that it will double the capacity of its Idaho Falls malting facility. (Anheuser-Busch owns a little more than 50 percent of Grupo Modelo.)
"Combined with the Anheuser-Busch expansion, Grupo Modelo's project will create a multi-million dollar economic opportunity year-in and year-out for Idaho farmers," said Idaho Dept. of Commerce Director Gary Mahn. "The economic ramifications of a value-added project like this will be felt throughout Idaho."
Broad-Ranging Incentives Sweeten BrewIdaho also added value for Grupo Modelo through a wide-ranging incentive package. Grupo Modelo's new Idaho plant will be constructed with state support from Kempthorne's Rural Idaho Initiative and the Governor's Settlement Fund. The Regional Development Alliance will also use $600,000 from the Governor's DOE Settlement Fund to purchase property for the malting plant, which will be located near Anheuser-Busch's existing Idaho Falls plant. In addition, the rail facilities over which Grupo Modelo will ship and receive products will be constructed and funded by the Governor's Rural Idaho Initiative.
Kempthorne praised the wide range of groups that collaborated in successfully recruiting the Grupo Modelo plant. In addition to the governor's office, the project recruiting team included the Depts. of Commerce and Agriculture, the city of Idaho Falls, the Idaho Barley Commission, the Idaho Grain Producers Assn., the Regional Development Alliance and the Eastern Idaho Economic Development Council.
Grupo Modelo has not yet released employment projections for the Idaho Falls plant.
TORRANCE, Calif. -- Honda of America Manufacturing has tapped its plant in East Liberty, Ohio, to build an all new light truck model based on the popular Model X concept vehicle. Honda officials are pegging high hopes on the new model's appeal to the lucrative youth market.
Model Will Blend Truck,Honda hasn't yet divulged the model name for the light truck that it will produce in Ohio. Company officials said, however, that the new model will closely emulate the multi-functional Model X design concept vehicle, which was introduced at the 2001 North American International Auto Show in Detroit.
SUV and 'a College Dorm'
The Model X truck will open up a new niche for Honda, company officials noted.
"The production of this innovative light truck model will further expand our manufacturing capabilities beyond our current production of passenger cars, motorcycles, all-terrain vehicles and engines," Hirashima said.
Tom Elliott, executive vice president of American Honda, said that the new model will be "an important new addition to Honda's growing family of innovative light truck models." Young male buyers in particular are a major target market for the new model, Honda officials said. As with Model X, the light truck will feature a box-like shape, a pillar-less body side, "open-wide" doors and an inordinate amount of storage space. The flexible seating in the truck's interior, for example, will provide enough space to stow a surfboard 10 feet (3.03 meters) long, according to company officials.
Like Model X, the new light truck, Elliott said, will combine "the best features of a pickup truck with the best features of a sports utility vehicle, and [it] adds a college dorm for good measure."
The Model X-based light truck that will be made in Ohio had its genesis in an appropriate spot: the inaugural X Games in San Diego in 1998. From there, a core group of young Honda R&D engineers followed up on the idea by conducting informal focus groups at colleges and universities, beaches, campsites and mountain parks.
The final product that will roll off the assembly lines in East Liberty "is a radical departure from traditional automotive design that we think will appeal very strongly to a new generation of car buyers," Elliott said.
Briefly . . . Quick Takes
St. Petersburg, Russia -- Heineken has expanded in the Russian beer market in a big way, acquiring Bravo International, the country's fastest-growing brewer. The acquisition of the brewery in St. Petersburg "is valued at a maximum amount of $400 million, provided volume and price targets are met in the next 12 months," Heineken said in a statement. Brewing Heineken in Russia will allow the company to avoid the country's substantial import duties, providing a market edge for the Amsterdam-based brewer.
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