'07 Forecast: manufacturing
Plastics, medical devices and life sciences continue strong growth
By Phyllis Hanlon
The plastics industry expanded its already significant foothold in North Central Massachusetts over the last year, and coupled with the diverse range of medical device, health care, and technology firms in the region is poised to continue that solid growth through 2007 industry observers say.
The area boasts the largest plastics cluster in New England, comprising more than 140 companies in all aspects of the industry from resins, compounding and mold making, to tool and die, to recycling.Nancy Jackson, economic development director of the North Central Massachusetts Chamber of Commerce, says the vitality of that industry stems from its reputation for well-designed products, highly efficient plants, ample space for growth and low cost of living. North Central Massachusetts has 21 industrial parks, a combined availability of more than 850 acres, and a sizable population of skilled workers with access to advanced education and training support. Wages are 42 percent higher than the average private sector pay in the area.
Even as some manufacturers close, there are numbers of other businesses waiting in the wings, ready to take their spots, says Scott Amos, economic development manager for the North Central Massachusetts Chamber of Commerce. This year’s newcomers included a heat register manufacturer, a plastics injection molder, and pasta maker, while two plastics molders, a chemical company and an automation machine manufacturer all closed their doors.
There are major projects planned, too. New England Developers recently purchased more than 200 acres at the junction of Jungle Road, Route 117, and I-190 in Leominster for a large commercial project.
Innovation, adaptation and restructuring
Lean manufacturing and ISO quality measurements have long been recognized as smart ways to reduce expenses and increase production. Local firms have become increasingly adept at using those tools, as well as other operational adjustments to streamline their operations and allow for growth.
"Manufacturing has seen its major physical growth in internal expansions and restructuring within existing facilities," says Amos. Reorganization has created freed up manufacturing space to accommodate additional contracts, or creating specialized production facilities such as clean rooms or assembly rooms. "The life of manufacturing here is not dependent on new companies locating, but rather the retention and expansion of those already here," he says.
Growing businesses in Massachusetts
One major addition to the manufacturing matrix here will be the construction of a 750,000 square foot, $660 million manufacturing facility for Bristol-Myers Squibb at Devens (see 2006 News Recaps, page 30). Future expansion could bring the plant up to $1.1 billion. Groundbreaking at the 80-acre site started in September. When the plant becomes operatonal in 2009, it will employ 350 initially, growing to 550 at full capacity, with high-paying jobs averaging $60,000 a year, according to some estimates.
The arrival of the BMS facility will be the one of the biggest deals at Devens for MassDevelopment, the quasi-public agency overseeing the redevelopment of that former Army base. It has so far enlisted 85 new businesses at Devens with a combined annual payroll of more than $220 million, and a workforce of 4,200. Among the prospective future tenants is an unnamed plastics manufacturer, which has expressed interest in a 10,000 square foot space, says Robert L. Culver, CEO and president of MassDevelopment.
Other MassDevelopment projects in the area are building up the area’s manufacturing network. It has used the state’s $25 million, three-year-old Emerging Technology Fund (ETF), to help 11 companies locate or expand in the state. Industrial cites Gateway Park and New Garden Park, and biotech firm Blue Sky Biotech Inc. have secured between $150,000 and $1.65 million in financing from the fund.
Technical training opportunities abound |
If training plays a key role in keeping the state’s manufacturing industry competitive, then the newly built Worcester Technical High School should go a long way to ensuring that healthy competition of the manufacturing sector.
Using donated materials from local companies, students at the school learn hands-on skills transferable to the real world after graduation. By pairing technical and academic curriculums, the school offers a better level of training for future Central Mass. workers, says Jack Healy, director of the Massachusetts Manufacturing Advancement Center in Worcester.
Many local companies depend upon the intellectual expertise emerging from the school. Abbott Labs, which employs 700 workers and is one of the biggest manufacturers in Worcester, has a ready pool of potential employees with knowledge and skills in the biotechnology field from which to draw.
Morgan Construction, a 100-year old manufacturing company in Worcester, has reinvented itself several times to maintain its prestigious position in the industry. The school has become a main recruiting vehicle for the company. "If it weren’t for the school, Morgan would have a hard time filling positions," Healy says.
Another key training program focused on manufacturing has been implemented in all six New England states. Called The Machine Operator Skills Training Program (MOST), it is a $750,000 classroom on wheels, fully equipped with the some of the latest in manufacturing technology. During the two-week intensive training session, students learn quality production, develop CAD skills, and operate simulated milling and turning machines. After the classroom, students complete 60 days of on-the-job training.
Healy says the program better orients new employees and enhances job retention.
P.H.
Collaboration will fuel growth
The growth of complementary Central Massachusetts industries poses big potential for the region as a whole.
Many predict the growth of the plastics industry will play a big role in the growth of the medtech industry and the creation of a projected 5,000 jobs over the next three years. "The local plastics industry is poised for major growth, and has already seen a large amount, as medical device designers and OEMs look to outsource component manufacturing in order to lower their own overhead costs and increase time to market for many of their products," Jackson says.
Thomas Sommer, president of MassMEDIC, says medical device exports earned top place last year among products exported from Massachusetts. Sommers says that was driven in large part by complementary businesses located in the state, including research hospitals, and precision engineering and instrument making firms.
Michael Best, director of the Center for Industrial Competitiveness at the University of Massachusetts Lowell, recently wrote in MassBenchmarks 2006 that many technology-driven companies are growing or relocating to the Bay State. The medical device business is thriving as a result of this techno-diversity. Companies like Boston Scientific, Genzyme and Parexel incorporate a variety of technologies, life science applications and research skills to bring their products to market. Many of those skills are found in companies here.
Like plastics, the medical device industry adds high wage manufacturing and management jobs to the local economy and draws on local suppliers, intellectual expertise from the Commonwealth’s many educational institutions, significant venture capital support, and participates in the state’s export industry.
Partnering with colleges and universities
Manufacturing companies should partner with the colleges and universities in the area to develop new ideas and products for businesses, says Robert Culver, CEO and president of MassDevelopment.
Schools like WPI, which has graduated more than 1,000 engineers in the past three years, are involved in research with hospitals and biotechnology companies to develop new proteins and drugs. "They are working on new things to substitute for body parts," says Culver. "These efforts are complemented by the plastics businesses, giving us a new competitive advantage."
Challenges
Some challenges remain in 2007. The state’s competitiveness in manufacturing rests significantly on housing as well as business space, says Culver.
Housing and land prices vary significantly, and easy access to highways and other sources of transportation figures prominently in attracting new businesses. Improving access to both will help draw more companies here and help keep costs down.
Red tape has been another drawback for businesses, streamlined permitting regulations should help ease the burden of relocating or expanding here. To grow, Culver says that the state should look to forge partnerships with other nations, to capitalize on manufacturing products culled from the educational resources here.
Phyllis Hanlon is a freelance writer. She can be reached at PolishPen@mac.com
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