Markets & Companies

Top Business Climate Meets Excellent Talent Pool

Investors Benefit from Ohio’s Infrastructure for Chemical and Advanced Manufacturing Industries

21.11.2016 -

In the last few years, the US market has been focused more and more again by European companies. This largest single market in the world has been recognized again with a top score in the latest World Competitiveness Yearbook (WCY) published by the renowned Swiss IMD Business School. The analysis is based on 340 criteria out of four factors; in two of them, “infrastructure” and “economic performance”, the US has been ranked #1. The WCY annual study ranks competitiveness of 61 countries, and the US regularly achieves top results.

Within the US, Ohio has consistently been named for the past ten years as one of the best investment locations. This is proven by the nationwide Governor’s Cup award of the Site Selec-tion magazine. This annual prize is awarded to federal states for business expansions or newly founded subsidiaries in their area. To be included in the analysis, the project must meet at least one of three criteria: involve a capital investment of $1 million; create over 20 new jobs; or add 20,000 sq. ft. (1,850 sq. m.) of new floor area. Trade, state projects, hotels, schools and hospitals are excluded. In 2015, numerous European companies contributed to this success through expansions and new locations such as Valeo Bayen, TFF Group (both from France), and Ravizza Packaging (Italy), and German companies including Storopack, Röchling, and Peter Cremer.

Leading in Plastics and Rubber Product Manufacturing

A closer look on chemical and advanced manufacturing industries shows that Ohio is the No. 1 US location for the plastics and rubber product manufacturing. The state leads the nation with more than 1,800 establishments, producing $5.49 billion in products in 2014 – the largest volume of plastic and rubber products in the US (by GDP). World-famous companies like Goodyear, Parker Hannifin, PolyOne, or Omnova are headquartered here. Overall more than 68,500 people are employed in the polymer and plastics industry in Ohio.

The plastics and rubber processing industry in Ohio centers on two core regions: the Northeast around the cities of Akron, Cleveland and Youngstown, and the Cincinnati-Dayton Corridor in the Southwest. Ohio has considerable resources of shale gas and wet gas, which are particularly relevant for companies within the chemical, polymer, rubber and plastics industries, among other things, for the production of ethylene-based products.

One of the latest success stories in chemical industry in the Greater Cincinnati region comes in of Peter Cremer North America (PCNA), a leading supplier of oleo-chemical products and part of Cremer, based in Hamburg, Germany. In 2015, the company expanded its North American subsi-diary in Cincinnati for $9 million, creating 122 new jobs. Established in 1999, PCNA offers a wide range of oleochemicals: fatty alcohols, fatty acids, biodiesel, esters, glycerine, and care products.

JobsOhio along with its regional economic development partners and the local chambers of commerce facilitate market entry for foreign companies and are the driving forces in relocation and expansion projects. The services offered and range of free services differ considerably from one state to the other. In Ohio, the JobsOhio team has close connections to specialists such as banks, lawyers, tax consultants and energy providers. They also offer assistance and advice on all aspects of market access, and have a broad range of incentive programs, all offered free of charge.

Important Criteria for Site Selection

Small and medium-sized businesses often locate close to their customers they already have in the USA, but it is also important to keep in mind the geographic proximity to potential markets. Business criteria for site selection can be classified:

  • economic environment and tax aspects
  • proximity to customers, suppliers, and market partners
  • talent and close proximity to universities, research institutions and enterprises
  • infrastructure for easy business travel and distribution of goods

Other political and economic factors and the overall long-term investment climate in the state of choice are important as well. Studies have shown that medium-sized companies with focused budgets and limited human resources approach their expansion abroad differently than large corporations that have far greater financial and personnel resources. Also, medium-sized enterprises allow themselves more time in their international expansion processes.

Economic Environment and Tax Aspects

Ohio has one of the top five business climates in the entire US with a surplus of $2.1 billion and a balanced budget. Low taxes, the lowest in the Midwestern US for new capital investment, and strategic logistics options keep the cost of doing business in the state low. In addition, the assembly in Free Trade Zones supports precise investments and tax planning.

Proximity to Customers, Suppliers, Market Partners

Because the country is 26 times larger than Germany, for example, choosing the right location is of critical importance in the USA. Ohio is strategically located in the heart of the Midwest industrial heartland: 60 % of all US production sites and 50 % of US consumers, which are 160 million people, are located within a day’s drive from Ohio. The most populated and industrialized region of Canada is also within this radius.

Talent and Proximity to Universities and Research Institutions

Out of its over 200 universities and colleges, Ohio has eight universities with programs dedicated to polymer science, e.g. the University of Akron’s college of polymer science and polymer engineering which enjoys an excellent reputation as one of the best programs worldwide. With 11,700 engineering and technician graduates per year, Ohio provides an excellent talent pool for the industry. Apart from university education, a dual training system based on a German model was incrementally implemented by German company Festo Didactics with state support.

Easy Business Travel and Distribution Of Goods

A number of international and regional airports give access to all the important markets in North America in order to reach the customers. With a total of 21 interstate highways, Ohio has the fourth-largest Interstate Highway System in the US. The fine-meshed railroad network in Ohio facilitates the transportation of heavy goods to the Ohio River and from there via the Mississippi to the Gulf of Mexico. The "Cleveland-Europe Express" connects Cleveland on Lake Erie via container ship with Europe.

European Companies have Positive Influence on Business Climate

Due to the state's stable economic base, its longstanding European heritage and central location, European companies have more than 2,200 establishments in Ohio – over 500 of them from German companies. With an advanced infrastructure for plastics and rubber manufacturing companies, Ohio provides the environment for industry, science and talent to contribute to an innovative economic climate in progressive manufacturing.