Last month, Hosokawa Custom Processing Services, a New Jersey contract chemical processor, announced it was moving to Goldsboro, about an hour southeast of Raleigh. It was not a Toyota-sized announcement. Around 16 jobs and a lot of expensive machinery will be coming to a 50,000-square-foot building in a Wayne County industrial park.
But every corporate relocation to North Carolina is a window into the economic development process; each one is its own business case.
The Hosokawa U.S. subsidiary’s roots go back a century, when it was founded as the Pulverizing Machinery Co. It was purchased in 1985 by the Hosokawa Micron Group, based in Osaka, Japan, a leader in powder and particle technology. The New Jersey operation’s machines grind and, yes, pulverize and sort compounds into extraordinarily small particles (roughly the size of blood cells) and powders that manufacturers use to make things, like copy machine toner.
The parent company, Hosokawa Micron, mainly makes the machinery that manufacturers use to create their own particles and powders, and the New Jersey facility was originally used to test new equipment for buyers. But it kept getting requests from customers who needed to process, say, 10,000 pounds of material for a market study, or 2,000 pounds for a prototype.
“And it was just killing us,” says Rob Voorhees, who runs the New Jersey operation. “So we took some older equipment that we had and set it up in a different part of the facility, and we just process materials for a fee. So, if a customer says ‘I want 10,000 pounds of this product reduced from 1/8th inch particle size to 25 microns’, that’s what we do.” The trick is not just reducing materials down, but removing smaller debris and impurities so that the remaining particles are the same size.
Some good timing
The story of how Hosokawa decided to move from New Jersey to Goldsboro says a lot about how economic developers work. Landing an out-of-state factory of any size requires preparation and persistence.
Two things happened in early 2020 that ultimately led Hosokawa here. First, it needed to expand. Business was growing, but it had run out of room for additional equipment and material handling. It was looking for a new location.
Second, a group of North Carolina economic developers was making a recruiting trip up north, in March 2020, a week before the COVID lockdown. Among them were Joe Melvin, who was then director of business development for North Carolina’s Southeast, and John Nelms, senior economic development manager at Duke Energy for Eastern North Carolina and current president of the N.C. Economic Development Association. (Melvin just last week left for Michigan to be the lead global industry hunter there.)
Sometimes, before a recruiting trip, economic developers will hire a company familiar with a region to set up appointments with good prospects. Who has had big revenue gains, who is looking to expand? One of the appointments on this 10-meeting trip was set up with Hosokawa, which is an hour west of the Newark airport in Summit, N.J.
Once the meeting was scheduled, Voorhees started looking online at industrial properties in Eastern North Carolina, and that’s how he found an available shell building in ParkEast Industrial Park in Goldsboro. It wasn’t hard to find: It was on the Wayne County Development Alliance site, NC Southeast’s site, and the Global TransPark Economic Development Region site.
Room to grow
Not only was there 50,000 square feet ready to upfit, with 35-foot ceilings, but it sat on about 20 acres. The building was configured to easily allow a 50,000-square-foot expansion. It had sufficient power and utilities, and because it was located in an industrial park, it wasn’t near any homes, which is a plus for a chemical processor.
“It was the combination of the perfect size,” says Voorhees, “and it allowed for a major expansion, based on the property size.”
So there’s one obvious insight. Success in recruiting industry requires sites, like industrial parks, and available buildings. Wayne County and Goldsboro business and government leaders have worked hard to create ParkEast over the years. “You’ve got to be prepared,” says Mark Pope, senior vice president for the GTP economic development region, which includes Greene, Lenoir and Wayne counties and the Global TransPark in Kinston. “If you don’t have tools in the toolbox, you really can’t do a lot.”
No unimportant prospects
Hosokawa had not been looking at North Carolina before Melvin’s group made contact. “To be honest, we were looking for something closer to our New Jersey facility,” says Voorhees. “That’s really why we looked in Northern Virginia and Western Pennsylvania, something within four hours, and nothing showed up that was as good as this piece of property.”
But there was something else. The folks from North Carolina seemed to really want the business. “The other states that we looked at, it was very difficult to get responses . . . any kind of response,” says Voorhees. “We kind of went out [to] a couple of different development boards in Virginia and Pennsylvania, and said ‘Here’s what we’re looking for. Some cases, they just never got back to us, or it took them months to get back to us.”
So that’s another economic development insight, direct from a prospect. It pays to be very responsive. A 16-employee business could grow into 100 or 200 employees in a few years, so treat every lead like it is important.
Hosokawa will pay an average annual salary of $50,994, above the Wayne average of $38,401. The state is kicking in $50,000 in incentives if job and capital investment targets are met.
The community college
Voorhees told me another thing that I hear constantly, but when you hear it from a company it makes a bigger impression. Incentives are, for smaller companies, one of the last things on the table. A more significant attraction is our community college system, which is an important source of workforce training for relocating companies. Voorhees was aware of this, but the full impact didn’t hit him until the announcement ceremony last month. It was held at Wayne Community College. There was a nice picture in Goldsboro’s News Argus of Voorhees and state and local officials at the event.
Voorhees’s tour of the college was eye-opening. “I was just amazed,” he says. “They have an excellent welding program. They have an excellent program for teaching all types of metal-working, from the fabrication part of it to actual machining.”
There were CNC machines, automated machine tools operated by computer, used to teach students how to use equipment in advanced manufacturing. “I was very impressed at the capability of that small community college, and the fact that it could supply all our needs for future expansion down there.”
That’s why they held the announcement there, because the community college system is a key component of North Carolina’s economic development strategy – training the workforce for better jobs.
I mentioned that Melvin is now in Michigan. He had been recruiting companies for rural southeastern counties for 14 years. There is a tendency sometimes to think that site selection is a highly automated process with consultants and companies who sit at computers and sift through mountains of data to find the right place to build a new plant. There is some of that, which is why updated, complete local web sites are very important. But economic developers like Melvin don’t wait for the phone to ring, and they don’t do all their business on Zoom.
“Virtual meetings work well,” says Melvin, “but call me old-fashioned.” He says that prospects are more impressed when people, say, fly to Newark, rent a car and drive to a town like Summit, N.J. “I’m paying my money to set up the appointment and travel in market to meet with you.”
While Melvin was recruiting Hosokawa, Michigan was recruiting him. That’s how it goes in economic development. He will be missed in the southeastern counties.