Zeeland-based AllRout invested more than $500,000 into expansion, creating six new jobs. Courtesy Lakeshore Advantage
Lakeshore Advantage supported 27 business expansion projects in Allegan and Ottawa counties last year.
The Zeeland-based economic development organization’s work in 2018 represents $235 million in private investment and the creation of more than 750 jobs.
In 2017, Lakeshore Advantage assisted with 18 expansion projects that leveraged over $90 million and created 650 new jobs.
Jennifer Owens, Lakeshore Advantage president, said the number of projects typically hovers around 25. While last year’s number isn’t considerably higher than that, she said the types of investments many of the companies have been making seem to be changing, leading to much more private investment.
“We're seeing a lot more investment in machinery, equipment and automation and a little bit less in building improvements,” Owens said, adding she believes it may be due to the ongoing talent shortage. Since companies cannot hire enough workers, they are investing in updated machinery to make production more efficient.
“But the automation-related equipment is quite pricey, so that really ties into the increased private investment we’re seeing,” Owens said.
A big win for the organization was the $100-million investment and creation of 250 jobs by Zeeland-based Gentex. Lakeshore Advantage also landed the $50-million investment by dairy producer Fairlife and the $30-million investment by officer furniture manufacturer Herman Miller.
The majority of projects leveraged less than $5 million. One of those was Zeeland Township-based AllRout, a company that specializes in routing projects for automotive packaging, furniture components and more. The company’s $511,801 expansion investment includes a 10,000-square-foot addition to its facility and six new jobs.
“We have experienced significant growth in 2018, which has resulted in nearly doubling the size of our current building and increasing our workforce by 40 percent,” said Jeff Robinson, president of AllRout.
By partnering with other manufacturing companies in West Michigan, Robinson said they were able to leverage each other’s strengths and compete with out-of-state and out-of-country companies.
Owens said she thinks 2018 was one of the strongest for food processing expansion and investment, as well as for automation.
She said about half of the land in the counties is agricultural, so an increased global and local demand for food is benefitting West Michigan.
“Domestically, I think people are more conscious about wanting to buy locally sourced and produced products, so it’s kind of doubly benefited our processors,” she said.
“It allows many local companies to stay strong.”
With the area’s wastewater systems near capacity, however, attracting additional agriculture companies in that specific area may be difficult, but Owens said she would encourage these companies to consider Muskegon, as well, which has considerable wastewater capacity.
New investment in any area of West Michigan ultimately benefits the whole region, she said.
The Holland-Zeeland area does produce its own power, which leads to rates that are 30 percent lower than the rest of the state and could be attractive to some of those companies that use a lot of machinery.
To ensure Lakeshore Advantage’s area of focus can continue competing, Owens said the organization is focused on research and investigating its competition throughout the country. Her team has identified and is visiting four similar communities throughout the U.S. to learn how West Michigan compares. They include Cleveland; Indianapolis; Nashville, Tennessee; and Spartanburg, South Carolina.
“We're doing very well, but we definitely have some strong competition nipping at our heels,” Owens said.
Greenville, South Carolina, for example, has a 300,000-square-foot manufacturing facility owned by the community college, which companies can use rent-free for up to two years as they establish themselves or are building their own space.
With such information, Owens said her team will be able to continue bettering and promoting its strengths, as well as continuing to work toward solutions for the area’s weaknesses.
Talent continues to be the organization’s No. 1 challenge, Owens said, and she will keep working to improve the situation. She said the organization has worked with local school districts to expose students to in-demand careers, and it will continue striving to attract more talent to the region.
Owens also said there will be an increased focus on working entrepreneurs and startups. Last August, she hired Amanda Chocko, formerly of venture capital fund Start Garden, to lead that effort.
Owens said Lakeshore Advantage’s annual portfolio typically is about 80 percent company expansions and 20 percent attractions, though she thinks the expansion rates may increase in 2019.
With such a low employment rate, she said companies looking to locate to West Michigan have to bring talent or compete with other high-paying employers.
For companies that do want to move in, she said West Michigan’s “culture” of making products from early stage innovation through mass production is attractive and has created a diverse portfolio of companies and skilled workers.
“Manufacturing is in the blood here,” she said.
Of course, every economic development organization can tout the region’s quality of life, particularly proximity to the Great Lakes.
“You have to make a point to get to West Michigan. We're not a drive-thru part of the country,” she said. “But once people make a point to come up north, they don't want to leave.”