In addition to being home to successful food processing and fabricated metal companies, Nebraska also offers significant advantages to manufacturers of plastics products. Few states are as attractive as Nebraska when it comes to expanding or building a plastics manufacturing facility. There are good reasons why world-class manufacturing companies thrive in the Cornhusker state. Nebraska offers an attractive business climate, a productive and well-educated labor force, competitive labor and energy costs, and a central location.
As the state’s largest electric utility, Nebraska Public Power District (NPPD) works with local, regional and state economic development organizations to position communities and regions for economic growth, to assist with the expansion and retention of existing industry, and to attract new businesses. In a recent study, “Nebraska Profit Opportunities for Manufacturers of Plastics Products”, Dr. Ken Lemke, Ph.D. (an economist at NPPD) reveals how a Nebraska plant location can help companies better respond to market conditions and significantly improve their competitive positions. Dr. Lemke’s study provides cost comparisons among 16 states (including the top ten states in terms of employment and value of shipments by the Plastics Product Manufacturing industry. These are states Nebraska typically competes with regarding industrial location projects.
Low Cost of Doing Business
In NPPD’s plastics industry study, estimated labor-related costs include the direct wages paid to production workers and costs associated with workers’ compensation insurance, unemployment insurance, social security, and fringe benefits. Compared to the 15 alternative states, Nebraska is found to offer an annual savings of $397,191 in labor-related costs, which is 15.5 percent less than the average labor costs for the other states. These are certainly desirable statistics to plastics manufacturing businesses.
This study also concludes that a Nebraska plant location offers a significant energy cost advantage when compared to the average cost of the other 15 states. Industrial electric rates in the alternative states average 16.4 percent higher, and the average industrial gas rate is 26.7 percent higher. Nebraska is also the only state in the nation with electricity provided entirely by public power. Public power electric utilities in Nebraska are not-for-profit, which keeps costs down and prices competitive for customers. Nebraska’s two largest electric utilities, Nebraska Public Power District and Omaha Public Power District, have under their control an efficient and dependable “mix” of generating systems to supply current and projected needs; the mix includes coal, nuclear, hydro, gas, oil, wind, solar, and diesel sources.
Nebraska utilities also operate 12 hydroelectric plants and receive a power allotment from the Western Area Power Administration hydroelectric facilities on the Missouri River. The utilities operate with a reserve capacity that protects users against voltage reductions and brownouts. Furthermore, the utilities are members of the Mid-Continent Area Power Pool, the Southwest Power Pool, and the Western System Power Pool.
Natural gas in Nebraska is also attractive to industry for service, supply, and price. A gas-producing state, Nebraska is close and well-connected by pipeline to the major gas fields of the central and southern plains. The state’s average cost of industrial gas is less than both the regional and national averages.
Combining these advantages, Nebraska’s energy cost for the model plant is 15.0 percent less than the average for the other 15 alternative locations. Together, Nebraska’s annual labor and energy costs for the model plant are $470,893, or 15.5 percent less than the average costs for the 15 alternative states. Conversely, the average labor and energy costs in the other 15 states are 18.3 percent more than the Nebraska labor and energy cost. Overall, Nebraska’s average electric rates remain among the lowest of all 50 states.
Nebraska’s central location offers an integrated system of interstates, mainline railroads and airports for manufacturing companies. Communities are connected by an excellent highway system that includes 8,539 miles of interstate, freeway, and arterial roads. The system includes a 455-mile stretch of Interstate 80, the most traveled east-west transcontinental route of the interstate highway system. Within one day, goods shipped by truck from Nebraska reach more than 25 percent if the U.S. population; add a day and the percentage jumps to more than 90 percent.
In addition to being a strategic location to serve national markets, Nebraska is well situated to serve international markets — vital to many plastics products manufacturers. The nation’s two largest rail companies—BNSF Railway Company and Union Pacific Railroad—provide rail service to many Nebraska communities. For example, the Union Pacific’s main railroad line in central Nebraska is the busiest freight corridor in the world. Ten freight railroads operate more than 3,200 miles of track throughout Nebraska. And, no major city in the United States is more than five days by rail from Nebraska.
Commercial airline service is available in nine Nebraska cities, providing direct service to major hubs. Scheduled air freight service is provided to five additional communities with on-demand service available. A total of 81 public-use airports are located throughout the state.
With the Missouri River forming Nebraska’s eastern border, the state is a western terminus for barge traffic. Barges have access to both the Gulf of Mexico via the Mississippi River and to the Atlantic Ocean via the Great Lakes and the St. Lawrence Seaway.
High Quality Workforce
Nebraskans take pride in the quality of their work, and the workforce consists of productive, dependable, educated, and well-trained individuals who care about what they do. This contributes to high productivity and success rates, low absenteeism, and turnover rates. Unemployment insurance costs and worker’s compensation insurance also are lower than the national average.
As part of a growing and rapidly changing industry, plastics products manufacturers can benefit greatly from flexible state-of-the-art educational resources. The University of Nebraska, state colleges, and the community college network are important elements in providing resources to assist manufacturers in maintaining an educated and trained work force. The University of Nebraska, is comprised of four campuses: The University of Nebraska-Lincoln, the University of Nebraska at Omaha, the University of Nebraska Medical Center, and the University of Nebraska at Kearney. It has the largest facilities among the state’s 21 colleges and universities and offers advanced degrees in most professional fields.
NPPD, in conjunction with the Nebraska Department of Economic Development and other allies, aggressively target the plastics sector through targeted advertising, trade show attendance, and personal visits with decision makers. The Nebraska Advantage Act includes incentives for six “tiers” of investment and/or job creation, small business advantage, research and development advantage, microenterprise tax credit advantage, and rural development advantage. It also includes a customized job training advantage, a research and development advantage and a micro-enterprise tax credit advantage. Nebraska also offers additional development assistance programs, including tax increment financing, community development block grants, customized job training programs, and industrial revenue bonds.
The state’s attractive business climate, a productive and well-educated labor force, competitive labor and energy costs, and central location are among the wide range of advantages the state offers manufacturers. For an industry characterized by many small- and medium-sized plastics production facilities, Nebraska provides substantial advantages to companies by helping them reduce costs, expand capacity, and otherwise become more competitive.
To obtain a full copy of “Nebraska Profit Opportunities for Manufacturers of Plastics Products”, stop by booth #S10160 at the NPE Expo or visit Econdev.NPPD.com/links-resources/. Also, more information about Nebraska can be found at www.GoodLifeGreatLocation.com.
Visit http://www.expansionsolutionsmagazine.com/nebraska_ed for local economic development office directory listings.