by John Henry on Monday, Aug. 20, 2007 12:00 am
The Port of Little Rock is finally proving its potential as a transportation hub
Its location at the nexus of one of the most heavily traveled cross-country interstate highway systems, an airport, major rail lines and, of course, the Arkansas River has helped make Little Rock the choice for two major new industries.
After Arkansas experienced a couple of well-publicized losses of "super projects" to neighboring states, the Little Rock Port reeled in two sizable companies.
The 741 acres purchased by Welspun Gujarat Stahl Rohren Ltd. of Mumbai, India, and the 135 acres that Denmark-based LM Glasfiber bought last month had been marketed for a long time.
Those involved in the economic development of the region say they aren't doing anything much different from what they've done before; it's just that the long process of building relationships with site consultants is finally paying off.
"After 10 years' involvement, we're an overnight success," said Mike Maulden, Entergy Arkansas' director of external affairs, head of its Office of Economic Development and chairman of the Little Rock Port Authority board, on which he has served for 10 years.
Jay Chesshir, president and CEO of the Little Rock Regional Chamber of Commerce, said attracting the companies was the result of a team effort over a period of several years. The city has invested the capital to make the port a viable site.
"Economic development is about relationship-building," Chesshir said. Over time, the site consultants "began to get more comfortable with us," he said. "That was our job.
"We lost some upfront, but we did what we said we would do, and we gained an opportunity for the success we've had."
With the formation of the Metro Little Rock Alliance's targeted economic development marketing program, Cardinal Health Inc. came in, Chesshir said, and "attention was directed to us." Site consultants "now look at Little Rock as a viable place to do business," he said.
The Haley-Beebe Team
If there's one common factor to which all involved in the success at the port point, it is the work of Maria Haley, executive director of the Arkansas Economic Development Commission, and Gov. Mike Beebe.
"She refuses to lose," Maulden said. "She's very skilled in international relationships."
"Gov. Beebe is involved in the recruitment process early on," Maulden said, "and that has helped. He is very accessible."
Maulden and Chesshir also credit the governor's Quick-Action Closing Fund, which comes from $50 million in the General Improvement Fund and is specifically directed for economic development. The money gives the state the ability to negotiate for work force training, capital investments and other projects instead of having to wait for legislative approval that could be slow and cause a business seeking to relocate to look elsewhere.
Paul Latture, executive director of the Port Authority, likewise credits Haley and her staff at AEDC. But he also acknowledges the work of the port authority's board of directors, the Little Rock chamber and Joey Dean, vice president of economic development for the chamber and executive director of the Metro Little Rock Alliance, along with Entergy's Teamwork Arkansas.
Welspun said it is building its $100 million steel pipe manufacturing facility at Little Rock to cut shipping costs and serve more projects in this part of the world, where about 60 percent of its exports from India were heading anyway.
The plant will employ about 300 initially and produce about 300,000 tons of material annually. A coating facility expects to be online by March 2008, with the pipe-manufacturing unit up and running by September 2008.
Latture said the company bought 741 acres of private property next to the Port Authority land with further expansion plans in mind down the road. The site will be annexed to the city and placed under the governance of the Port Authority.
LM Glasfiber said it will employ 500 in the fall and eventually more than 1,000 at its $150 million plant. The maker of giant fiberglass blades for power-generating wind turbines wants to break ground in September.
LM Glasfiber said it chose the port site for the project because of its easy access to interstate highways, rail lines and the river. The smallest blades the company makes are 123 feet long. The largest blades reach more than 200 feet.
A recent report released by the American Wind Energy Association predicts strong growth in the wind energy industry. AWEA said the United States is on track to add well over 3,000 megawatts to the nation's power-generating capacity in 2007.
This bullish performance by the industry is tempered, however, by supply chain shortages and policy uncertainty. "Wind power developers report that turbine availability is a limiting factor - in other words, there is demand for even more wind energy but companies can't build more projects because there aren't enough new wind turbines to buy," the report said. "And, in turn, there aren't enough manufacturing facilities for turbines and turbine parts in the country because the U.S. government's intermittent policy toward renewables has discouraged companies from investing in manufacturing facilities."
It would seem that LM Glasfiber will hit the market at the right time to grow.
Location, Location, Location
Latture also likes to brag about the location.
"There are simply not many places," he said, "that offer quick access to an interstate highway, is only a mile from an airport, is on the water and has its own switching railroad that connects with two Class 1 railroads."
In addition to being near Interstate 440 and Little Rock National Airport, the port has two terminals, one on the main channel of the river and one at the slackwater harbor, and rail connections to Union Pacific Railroad and Burlington Northern Santa Fe Railway Co.
Already the largest port operation in Arkansas, the Little Rock Port will see a major expansion as Welspun and LM Glasfiber add about 1,400 to 1,500 employees to an industrial park area that is home to about 3,000 workers.
In a quick analysis earlier this year, Latture said the capital investment in the land, infrastructure and industry at the port's industrial park area exceeds $500 million.
In addition to the two larger announcements, Boyd Metals of Fort Smith, a full-line metals service center, announced this month that it has bought a 10-acre site at the Little Rock Port where it will...build a 45,000-SF metals distribution facility....
Boyd Metals opened a service center in Little Rock last year at 600 Bond Ave.
"We are pleased with the reception we have received over the last year in the central Arkansas marketplace and excited to show our long-term commitment back to the market with this land purchase," said Mike Rowland, vice president and general manager of the Little Rock operation....
Boyd Metals President Tom Kennon said design and engineering work would begin soon. Boyd Metals was formed in 1991 and, in addition to its Little Rock facility, has operations in Fort Smith, Joplin, Mo., and Oklahoma City.
On the Arkansas River, the Little Rock Port is exceeded only by the Tulsa Port of Catoosa, which focuses on agricultural products and liquids that the Little Rock Port doesn't. Otherwise, Latture said, the two ports would be very close in the amount of tonnage each handles.
The industrial park takes up about 1,600 acres. Much of it is filled. Only 100 acres of unrestricted property are left.
The slackwater harbor area contains 600 acres, 300 acres of it developed, but it is restricted to water transportation users only.
The port handles about 600,000 tons by barge each year, Latture said, and he expects that when Welspun is up and operating, that tonnage will increase by 250,000 to 300,000 tons.
The largest amount of cargo handled by docks at the port terminals is steel and metal products, Latture said. That includes steel, aluminum, steel coils and wire rod coils. The largest single commodity is scrap steel, he said, most of which is going to the Nucor Corp. plant near Blytheville on the Mississippi River. Other major commodities at the docks include cement and waste oil.
Latture is quick to point out the energy and cost efficiencies of barge transportation if time is not a major factor. A barge can hold 1,600 tons of cargo, compared with 160 tons for a railcar and only some 25 tons or so for trucks.
The Arkansas Waterways Commission makes it easier to understand. It says the cost per ton mile for a barge is only 97 cents, compared with $2.53 for rail and $5.35 for trucking.
The port authority's railroad handles 12,000 to 13,000 railcars a year, Latture said. Again, he estimates that once the new plants are up and running, that figure will increase to between 18,000 and 19,000 railcars each year.
He said he's now advertising for bids to upgrade the more than 12 miles of mainline track in the industrial park and double the size of the marshalling yard.
Maulden, Chesshir and Latture said some other solid prospects have inquired about locating at the port.
Recent authorization by Congress for a 12-foot channel on the river, Latture said, will allow for 40 percent more tonnage on the same barge. And that, he said, will allow the Little Rock Port to compete on a more even level with the towns along the Mississippi River.
The Port Authority operates on a budget of $1 million annually. It receives no tax money and makes its revenue through the unloading of railcars and barges. Some income also comes from leasing vacant lots to farmers to grow crops.
The switching railroad's staff of five, including four crewmen, makes up more than half of the Port Authority's work force of eight employees.
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