By Scott Kraus, Of The Morning Call
March 11, 2013
For decades, the Lehigh Valley has been known to business leaders for three important qualities.
Location, location and location.
Nestled along Interstate 78 between Philadelphia and New York, the region has always been attractive to companies looking to ship their products up and down the East Coast. That's evidenced by the array of warehouses that sit astride the Valley's highways.
But as the Valley grows in popularity, some of its other strengths are getting attention.
"Companies know the benefits of working with such entities as Lehigh University as well as the region's Ben Franklin Technology Partners team, Lehigh Valley Economic Development Corp., and of course they know the benefits of being within attractive striking distance of New York and Philly in terms of both reaching end markets and reaching talent," said Adam Bruns, managing editor of Site Selection magazine.
It turns out the region also has a productive workforce, lots of professional business resources and suppliers, a welcoming network of economic development and business leaders and a strong selection of education and training options from top-flight universities to technical career centers.
And with the addition of amenities such as the IronPigs minor league baseball team at Coca-Cola Park and the PPL Center hockey arena set to open next year in Allentown, SteelStacks in Bethlehem and the burgeoning restaurant row in Easton, the region is also an easier sell to employees when it comes to quality of life.
The Lehigh Valley again will place high on the magazine's ranking of business growth for mid-size metropolitan areas for 2012, Bruns said.
In recent years, the Valley has seen an encouraging array of new companies moving in, many with the help of state loans, grants and other business incentives, said Don Cunningham, president and CEO of the Lehigh Valley Economic Development Corp.
"What we are seeing in the new iteration, which is extremely encouraging, is companies looking at doing production, manufacturing and assembly here to go with the logistics piece," Cunningham said.
Notable among those is Ocean Spray, the Massachusetts-based cranberry co-op known primarily for its juices.
Ocean Spray is building a $110 million bottling plant in Upper Macungie Township that is expected to employ 165 people when it opens this year. The 315,000-square-foot facility will replace an aging Ocean Spray juice plant in Bordentown, N.J.
The company is owned by 750 cranberry and grapefruit farmers who run the business with long-term goals, not short-term interests, company President Randy Papadellis said at a recent meeting of the Greater Lehigh Valley Chamber of Commerce. Because of that, the company will be a presence in the Lehigh Valley for generations, he said.
Ocean Spray is one in a string of food processing companies to open new locations in the Lehigh Valley. It's a roster that includes Bimbo Bakeries, the Mexican company whose products include Sara Lee and Entenmann's baked goods.
Bimbo, whose U.S. headquarters is in Horsham Township, Montgomery County, is building a $75 million plant off Route 100 in Upper Macungie. The 240,000-square-foot plant on 30 acres along Boulder Drive is expected to employ 100 people when it opens in 2014.
Beverage companies with plants in Lehigh County include Coca-Cola, Nestle Waters and Samuel Adams brewer Boston Beer Co. Candy and nut company A.L. Bazzini, which supplies peanuts to the New York Yankees, moved its production from the Bronx to Upper Macungie in 2011.
SunOpta, a Canadian firm that makes baby food, sports drinks, fruit purees and other products packaged in flexible, resealable pouches, opened its own plant in Upper Macungie last year, renting the facility and employing roughly 50 people.
The trend is good news for the Valley job market because local food manufacturing jobs pay about $15 an hour, more than the average in the fast-growing warehousing industry, according to the federal Bureau of Labor Statistics.
The Valley has also seen an expansion in the pharmaceutical packaging industry. While it still pales in comparison to northern New Jersey's roster of major drug makers, the Lehigh Valley has scored two major drug-packing firms.
Daiichi Sankyo, which opened in 2012, employs about 80 people in Bethlehem Township.
In February 2012, the company purchased the 140,000-square-foot Amcor facility in Lehigh Valley Industrial Park VI for $10.2 million. The state offered $3.6 million in assistance to lure the company, on the condition that it employ at least 82 people at the end of three years.
Japan's third-largest pharmaceutical company, Daiichi Sankyo focuses on branded cardiovascular and cancer therapy drugs.
Quality Packaging Specialists International moved its facility from Bergen County, N.J., to Industrial Park Way in Lower Macungie Township. It moved into an existing 157,000-square-foot warehouse, where it planned $10 million in improvements, according to the state. The state offered the company $3.4 million in loans and grants to lure it to Pennsylvania.
With headquarters in Burlington, N.J., QPSI offers packaging and supply-chain services to various companies, mostly in the pharmaceutical, personal care, confection, consumer packaged goods, and electronics industries. Its customers include Johnson & Johnson, Proctor & Gamble and Bethlehem candy-maker Just Born.
Bringing in those companies should help the Valley expand its appeal beyond food processing and packaging by demonstrating some of its benefits as a business location, including a reasonable cost for operations, Cunningham said.
"The reality of our economy in the Lehigh Valley is we can still be a manufacturer and a producer of goods, but it is going to be medical supplies, food and beverage, it is in consumer products," Cunningham said. "Things where the link to distribution to a large part of the East Coast metropolis is important."
The Valley is already home to roughly 1,200 manufacturers out of about 15,000 businesses, he said.
The region has already scored a few wins in the manufacturing sector. Westport Axle opened a new truck chassis manufacturing plant in Upper Macungie to supply Mack Trucks' factory in Lower Macungie. The facility, which replaces a similar plant in Lancaster that closed last year, employs more than 250 people earning on average between $15 and $16 an hour.
Georgia-based Pratt Industries opened a corrugated packaging plant in Lower Macungie that employs about 100 people. And Windkits, a Bergen County, N.J.-based manufacturer of windmill blade components, relocated its manufacturing facility to Upper Macungie in 2011, bringing with it about 20 jobs.
In order to continue that trend, the Lehigh Valley will need to produce more trained machinists, machinery mechanics and workers with other high-tech manufacturing skills.
"Workforce needs are changing at a rapid pace," said Tony Iannelli, president and CEO of the Greater Lehigh Valley Chamber of Commerce. "You need tradespeople, engineering and architecture, basic economics and math. That could be one question, both regionally and nationally. Will our workforce keep up with the very defined technical needs of the 21st century?"
Institutions such as Lehigh Carbon and Northampton community colleges and Lehigh County Technical Career Institute stand ready to help, said Jan Klevis, the career institute's director of post-secondary and career and workforce education.
The institute already does lots of custom training for companies in the Valley, such as medical device-maker B. Braun, whose high-tech manufacturing needs require sophisticated technical skills.
"We have been doing a lot of incumbent worker training. Hundreds of them are coming through and we are bridging that skills gap," Klevis said. "We have the programs, we have the best equipment available, instructional staff that is second to none. It is just getting the word out to the public that these are good, family-sustaining jobs."
That's not to say white-collar jobs are out of the picture. The Valley has seen the addition of several major corporate headquarters in recent years to office parks in places like Upper Saucon Township, and more recently to Allentown's downtown Neighborhood Improvement Zone.
The zone offers developers generous tax incentives to build and fill office buildings alongside a proposed arena in Allentown's long-struggling Hamilton Street business district.
National Penn Bancshares has committed to move its corporate headquarters with 275 employees to downtown Allentown from Boyertown, Berks County, in 2014. It's been joined in that commitment there by a number of smaller Lehigh Valley companies.
"The new Neighborhood Improvement Zone is stoking momentum, part of a national trend of downtown renewal projects," said Bruns, of Site Selection magazine.
The Valley also has a strong supply of urban and suburban office and industrial parks, some with tax benefits, that help to lure new employers, Cunningham said. They include the Chrin Commerce Center in Palmer Township, multiple Lehigh Valley Industrial Park locations and others.
Olympus' North American headquarters is the region's biggest economic development win. But since that company moved here in 2005, the Valley has also scored Avantor Performance Materials, which moved across the river from New Jersey to Upper Saucon's Stabler Corporate Center in 2011.
Last year, Creditsafe, a company that offers online access to business credit reports, opened an office in South Whitehall Township, employing a workforce of 50 that the company predicts could grow to 300.
It all adds up to a renewed confidence within the Lehigh Valley business community.
"I think there is a swagger about the Valley that we never had before," Iannelli said. "In the past, we were very self-deprecating on a good day, hugely critical on a bad day."
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