Week of March 11, 2002
  Project Watch
Henderson city hall
Interstate Bakeries chose Henderson, which is Nevada's second-largest city, with a population of 175,381. (Pictured above Henderson's City Hall)
Interstate Bakeries Stirring Up 200-Employee Operation in Las Vegas

HENDERSON, Nev. -- Interstate Bakeries Corp. (IBC), the company behind such products as Hostess Cupcakes and Wonder Bread, has announced that it will set up a 200-employee bakery in Henderson, Nev.
        The bakery will be housed in a 251,000-sq.-ft. (22,590-sq.-m.) facility on a 24-acre (9.6-hectare) site in suburban Las Vegas, according to IBC officials. The bakery will be the first that IBC, the largest U.S. wholesale baker, has established in Nevada.
        IBC's deal to establish its initial Nevada bakery takes a property off the market after it had languished there for almost two years. The building was formerly a distribution center for Levi-Strauss & Co. The world's No. 1 maker of brand-name clothing, however, decided that it needed a bigger facility in Henderson. It moved out in the spring of 1999, relocating its distribution operation.
        The former Levi-Strauss operation's considerable size limited its potential market. IBC, however, saw a bakery waiting to be born inside the onetime blue-jeans distribution center. The Kansas City-based bakery bigwig bought the property for $6.3 million, reported Cushman & Wakefield of Nevada, which negotiated the sale.

Proximity to LA Drove Choice
IBC officials didn't speculate on the company's possible capital outlay in retrofitting the former distribution center. Cushman & Wakefield executives, however, estimated that the conversion could cost between $10 million and $20 million.
        The retrofit will be finished in time for the Henderson bakery to open before the end of the year, according to IBC. The Nevada bakery's opening, however, will signal the closing of a crouton bakery in Montebello, Calif. The bakery in Los Angeles County will close next year, with its production moving to the Henderson operation, a company spokesman said.
        IBC is still determining the product mix for its Henderson operation. The Nevada bakery will definitely produce Wonder Bread, the No. 1 seller in the United States, the company said. The other bread lines that will be produced in Henderson, however, are still being determined. Proximity to Los Angeles was the major determinant driving IBC's location choice, the company said. Some of the products produced at the Henderson bakery will be shipped back to Los Angeles, said an IBC spokesman. Previously, company operations in Los Angeles and Salt Lake City shipped IBC products to the Las Vegas area.
        IBC's 200 employees in Henderson will join a work force of some 34,000 employees. The company, which has 65 bakeries in the United States, registered $3.5 billion in sales in 2001.

The coastal city Sohar has a long, rich sailing heritage that includes its purportedly being the hometown of Sinbad the Sailor.
LGI, ABB Lummus Teaming to Build $180M JV Polypropylene Plant in Oman

MUSCAT, Oman - South Korea's LG International and the Netherlands' ABB Lummus Global have signed a contract to both build and be joint-venture partners in a $180 million polypropylene (PP) plant that will be located in Sohar, Oman.
        The construction that the ABB Lummus/LGI team will head will produce the first plant in Oman to turn out secondary petroleum products. The operation will have annual production volume of 340,000 tons (374,000 metric tons) of PP, an important raw material in producing fabrics and in engineering plastic products.
        The ABB Lummus/LGI team had been pursuing the project in north Oman's coastal area since 1999. They were hardly alone.
        Borealis, Exxon-Mobile, and Motel also bid for the PP plant. ABB Lummus/LGI team won out over Denmark's Borealis in the final round of competition.
        Dueling technologies were part of the competition between the two finalist firms. And those technologies had implications for the capital investment required for the Sohar plant.
        Borealis proposed using its own Borstar PP technology, which the company recently commercialized at one of its plants in Austria. In contrast, ABB Lummus/LGI proposed using Novolen technology, which is owned by Novolen Technology Holding, a Lummus/Equistar joint venture.
        Industry analysts consider capital outlays for Novolen plants lower than for Borstar facilities. That cost differential owes to the Novolen technology's requiring fewer reactors, analysts said.

Partners Each Own 20
Percent Stake in Plant
ABB Lummus/LGI will oversee all aspects of the turnkey construction project on the Arabian Peninsula's southeastern coast, said executives from the two companies. The consortium's oversight, they explained, will span everything from engineering, construction and materials procurement to selecting the materials suppliers and the construction company.
        The project contract that was signed in Oman's capital city of Muscat also made ABB Lummus and LGI each owners of a 20 percent stake in the PP plant. The state-run Oman Refinery Co. holds the remaining 60 percent stake.
        The ownership stakes in the plant could yield lucrative payoffs for the consortium partners.
        LGI officials, for example, explained that the Seoul-based company has secured sales rights to the Oman plant's PP through an off-take agreement, a first for a Korean firm. LGI eventually expects some $170 million in annual sales of PP from the Sohar plant, the company announced.
        LGI will launch what company officials called "an aggressive sales campaign" in 2006, when production at the Oman plant is scheduled go online. LGI's first target market for its PP sales will be China, followed by Southeast Asia, company officials explained.

Roissy Charles De Gaulle airport
The proximity of a nexus of train, plane and road networks that includes Roissy Charles De Gaulle airport (pictured above) was a major consideration in Mori Seiki's decision to relocate its headquarters from Stuttgart to Paris.
Briefly . . . Quick Takes

PARIS -- Japan's Mori Seiki, a leading machine tools supplier, is relocating its European headquarters. The company recently announced that its European base, which is currently located in Stuttgart, Germany, will move to Roissy Park International in the north of Paris. Covering 555,556 sq. ft. (5,000 sq. m.) on a 3.75-acre (1.5-hectare) site, the new Paris headquarters will also serve as Mori Seiki's training and technical center, as well as its showroom for Europe.
        The Stuttgart operation, the company explained, will continue to function as corporate headquarters until the new Paris facility is ready for occupancy in September of 2003. The Stuttgart operation, however, will continue as Mori Seiki's central European hub for spare parts distribution, as well as the company's main center for Germany, company officials said. Mori Seiki particularly liked the Paris site's transportation access, company officials explained. Lying close to Roissy Charles De Gaulle airport, the French site stands at a nexus of train, plane and road networks linking Northern and Southern Europe.

MESQUITE, Texas - Another Japanese firm, plastic storage manufacturer Iris Ohyama, is headed for the Dallas area. The company has announced that Iris USA, its American subsidiary, will build a $22.3 million, 263,333-sq- ft. (23,700-sq.-m.) plant and distribution center in the city of Mesquite. Located on a 37.5-acre (15-hecatre) site, the operation will employ 130 workers.
        Reasonable land prices and labor availability were the major location considerations for Iris USA, said Director of Operations Mack Shinagawa. Another major location factor may have been the Dallas-based headquarters of the Container Store. The chain retailer is one of Iris USA's biggest customers.
        The first phase of the Texas plant will begin operations in September of this year. A second phase will come online several years later, Shinagawa said. And, if business conditions merit it, the Texas operation could get considerably larger. Expansions could boost total employment to 260 workers, with the company's Mesquite space increasing to 400,000 sq. ft. (36,000 sq. m.) said Shinagawa.
        The Texas facility will be the third U.S. plant for Japan's largest maker of plastic consumer products. Its U.S. subsidiary in 1992 built the company's U.S. headquarters and a plant in Pleasant Prairie, Wis. Iris USA built a second American plant in Stockton, Calif., in 1994.
        Iris Ohyama's other manufacturing facilities outside of Japan are in China and Europe. The plastic organizers and storage products that the company designs and manufactures are aimed at the home, pet, lawn and garden, and nursery markets.


©2002 Conway Data, Inc. All rights reserved. Data is from many sources and is not warranted to be accurate or current.