Naples, Fla. — Success in plastics can be about where you go, as well as who you know.
Three site selection experts covered location strategies March 6 at the Plastics News Executive Forum in Naples. One of the most important elements of site selection is "understanding what the site and facility needs are and putting them on paper," according to Vince Barnett, business investment vice president for the Virginia Economic Development Partnership.
Those needs could range from workforce availability to the features of a building, he added.
Site selection "really needs to start with your supply chain — where your customers and suppliers are," Darin Buelow said. Buelow is global location strategy leader for consulting firm Deloitte Consulting.
People are also important in the site selection process. "The focus is on talent now, from corporate headquarters to manufacturing," said Christopher Chung, CEO of the Economic Development Partnership of North Carolina.
The panel also reviewed some common site selection missteps. "Companies can be too focused on one issue, like [financial] incentives," Buelow said. "Incentives get a lot of press, but they don't make a bad location good."
Chung added that companies "are often seduced" by the total value of an incentive package without looking at the cost of doing business there. "You can get a $10 million incentives package, but if the cost of doing business is twice that of a place that's offering a $1 million incentives package, it's not going to work out," he explained.
Companies also sometimes think that "there's going to be a perfect site with everything on their wish list, but there often needs to be compromise," according to Barnett.
The availability of skilled workers continues to play a larger role in site selection. "We can drill down to the level of a certain occupation and help companies meet with other employers in the area," Chung said.
"It's important to have a conversation with other businesses without the economic development people and consultants being part of it so you can talk openly," Barnett said. "Skilled workers are at the top of the list regardless of the project."
Sadly, workers' inability to pass drug tests is impacting the labor pool. "The opioid epidemic is crushing the job market," Buelow said.
Incentives are a major part of the site selection conversation. Virginia recently was able to win a regional headquarters from e-commerce giant Amazon, thanks in part to a generous incentives package.
But Virginia's Barnett said that incentives "have to be good for the state and for the company … Amazon will bring a lot of resources benefiting the region well beyond Amazon."
Sometimes, existing companies in a state will ask why the state is using incentives to bring in competitors, Chung said. But he added that incentives "are available to all companies, as long as they're creating jobs."