Arkansas: Diversity is the Story of the State
26 May, 2014
By David Hodes
“We are working on a number of fronts both large and small,” Grant Tennille, the executive director of the Arkansas Economic Development Commission (AEDC), says, acknowledging the legacy of the state having world-famous entrepreneurs over the years as a driving force in current and future economic development.
There is Sam Walton in Bentonville, founder of Walmart Stores, the largest retailer in the world; and John Tyson of Tyson Foods in Springdale. “On a per capita basis, it is stunningly impressive,” Tennille says. “There is definitely something in the water down here, and we are working hard to make sure to continue to thrive and prosper in a new era.”
Tennille says to do that, they have made a lot of investments in incubator-style projects to ensure that they are identifying the next great companies. “We think that is equally important to our more typical mission of trying to attract new investment into the state and encourage existing established companies to reinvest and grow,” he says.
One example of the state’s dedication to entrepreneurial activity is the Arkansas Regional Innovation Hub, a nonprofit organization dedicated to increasing innovative and entrepreneurial activity in Arkansas by creating a collaborative ecosystem and pipelines that mobilize the resources, programs and educational opportunities necessary to develop, attract and retain talent and to build the state’s economy. The new center of the hub, in a former police station in north Little Rock, just received a $575,000 grant from the AEDC for renovation work. That innovation hub will spur new investment and hopefully increase the earning ability of the state’s businesses.
Joey Dean, vice president of economic development and executive director of the Metro Little Rock Alliance, says that the economic downturn didn’t really affect the state. “Our economy stayed relatively calm compared to other economies around the country,” he says, adding that it’s the state’s diversity of businesses that accounted for that continued strength.
Many of the cities in the state report that agriculture, advanced manufacturing and finance/insurance businesses all stayed solid over the last few years. “Manufacturing is not a bad word around here,” Dean says. “Because that is part of our diversity. And diversity is the story of our economy. We are not really dependent on one or two sectors.”
Industries and Innovations
Tennille says that the AEDC recently closed the funding and construction is beginning on Big River Steel LLC, a new flat rolled $1.1 billion steel mini-mill in Mississippi County.
The project is expected to create 2,000 construction jobs and 525 high-paying permanent jobs. “That will make Arkansas’ Mississippi County, by our count, the second largest steel producing county in the U.S.,” Tennille says.
The steel industry is making a comeback across the country in Arkansas and other states, Tennille says, because of the increased cost of trans-Pacific shipping for steel from China. More efficient, high-tech mini-mills like Big River are being built and operated today as the older integrated mills mostly on the East Coast, come to the end of their useful life. “These mini-mills, which are essentially enormous recycling plants, are the wave of the future,” he says. Much of the steel being made in the plant will go into the electrical industry for use in the building out and expansion of the modernized power grid.
Dean says that aerospace is a strong industry in Little Rock, where the French-based Dassault and their Falcon jet leads the way with a $60 million expansion to their 1 million-square-foot facility. Dassault Falcon’s facility is the site of two strategic Falcon operations: the main completion center for all Falcon jets worldwide, and the company-owned service center, which is dedicated solely to Falcon customers.
Just outside of Fort Smith, in Fort Chaffee, there are five different industries that have opened in the last five years, says Ivy Owen, executive director, Fort Chaffee Redevelopment Authority, with two that are already expanding.
One of those industries is gun manufacturing represented by Walther Arms. In June of 2012, Arnsberg, Germany-based PW Group, owners of shooting sports companies, Carl Walther Sportwaffen and Umarex Sportwaffen, announced the formation of Walther Arms Inc. to handle all the importation, sales, marketing, distribution, and servicing of Walther products in the United States.
On Jan. 1, 2013, that responsibility was transferred to the newly formed Walther Arms. “They already doubled in size to accommodate a handgun acquisition,” Owen says. “They originally were air gun and air rifle manufacturers.”
Down south in Columbia County is the city of 12,000 people, Magnolia, where the timber industry is represented by Weyerhaeuser Co.’s Magnolia Nursery and their hardwood seedling crop; and Hixson Lumber Sales Inc., makers of lumber, timber, boards, decking and plywood from Southern yellow pine. Both are expanding, says Cammie Hambrice, executive director of the Magnolia Economic Development Corp., along with Southern Aluminum, a manufacturer of tables for the hospitality industry.
Weyerhaeuser makes a multiple laminate used in housing, and it’s the recovery of the housing industry that is making a difference. “The slight increase in the economy is really what is driving the expansions,” Hambrice says.
In Maumelle, located in the heart of the state, Judy Keller, the director of the city of Maumelle’s community and economic development, says that one of their biggest manufacturers is the 359,000-square-foot Kimberly-Clark Corp. facility, makers of all the Huggies brand baby wipes in North America and employing over 200.
Two years ago, Little Rock-based Dillard’s Inc., moved their Internet fulfillment center from Tennessee to Arkansas and took Maumelle’s largest vacant building — an 850,000-square-foot former Target distribution center that was constructed in 1980 and expanded in 1990 — and hired 300.
But there’s more. “We just completed a strategic plan and last year the citizens approved three bond projects,” Keller says. “So we are expanding one road and extending another that will result in third entrance into the city with accessible property that is really not accessible now.”
Talent and Education
Tennille says that AEDC just finished a legislative fiscal session that included the creation of a $15 million fund of one-time money to pour into their workforce education fund. “And that is a fund that has never had more than a couple of million in it at any one time,” he says. “And so it is a serious rededication to the concept that in order to be competitive you have got to have the workforce.”
He said that Gov. Mike Beebe years ago created a workforce cabinet that originally include Tennille (Tennille is the former deputy chief of staff for Beebe) and now includes Tom Kimbrell, the director of the Arkansas Department of Education; Shane Broadway, the director of higher education; Ed Franklin, director of the Arkansas Association of Two Year Colleges; and others. “These are people all in the same room, meeting on a monthly basis to work on workforce issues,” Tennille says.
Tennille says that, being in the logistical center of the Western Hemisphere, as well as being close to Memphis, Tenn., across the Mississippi (the Arkansas River is a major Mississippi River tributary) where both the largest rail hub in the country and the largest FedEx air service is located, offers tremendous advantages. “Modern logistics as we know it was invented in Bentonville, by Walmart basically,” he says. “Before, guys were just driving around in trucks. Now it’s a science. And you can get a degree in logistics now at the University of Arkansas in Fayetteville.”
Tennille says that they tell people that the state is “midway between Montreal and Mexico City.” Arkansas has five navigable waterways; with class 1 rail carriers going north and south, east and west; and east-west Interstate 30 going from Fort Worth, Texas to Little Rock, where it connects to Interstate 40, which transverses the entire country, going from Arkansas through Memphis to points east; and north-south Interstate 55 that crosses Tennessee into Arkansas and heads up to Chicago.
One of the biggest new assets in the Fort Chaffee area is the new, $58 million private osteopathic medical college, the 200-acre Arkansas College of Osteopathic Medicine, set to break ground around the first of next year, Owen says. That school will accommodate 600 students, beginning classes in the fall of 2017. “That is really changing the complexion of what is going on here, not just at Fort Chaffee but at Fort Smith and the region.”
In Magnolia, there is a new golf course in nearby El Dorado that is just top of the line, Hambrice says. The area is also home to Lake Columbia, a 3,000-acre reservoir that was built 20 years ago as a water source and is a popular fishing spot.
The city also boasts a vibrant downtown area — “our calling card,” Hambrice says — with a quaint town square featuring a courthouse over 100 years old.
There is also the large Magnolia Blossom Festival and world championship steak cook-off — where more than 4,000 steaks are cooked on the town square — that brings in up to 8,000 people every year.
Dean says that making the Arkansas River navigable, one of the largest U.S. Army Corps of Engineers projects in the 1970s that led to business leaders building a port authority and industrial park near the river, was where a lot of the heavy manufacturing for the Little Rock area settled. “And that has been a real driver in our economy,” he says. They have committed $10 million to expand the port and buy more property over the last few years. “I think the business leaders of this region really took diversity into consideration when they were creating companies and planning some of those significant investments that were going to spur the economy.”
Illustration by suphakit73 at Free Digital Photos.net