The time is now: a manufacturing & distribution opportunity for Florida
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Florida has been called the flattest state in the nation, the sunshine state, and the gateway to Latin America. It is world-renowned for beaches, Walt Disney World, and the Kennedy Space Center. However, other than its traditional industries, such as fertilizers and citrus, it hasn’t been widely recognized for its manufacturing or distribution businesses.
That’s changing, according to Lake Ray, President of the First Coast Manufacturers Association (FCMA).
A CONFLUENCE OF FACTORS
Lake Ray has seen manufacturing and related jobs grow in Florida. “Some long-term programs are now coming to fruition. We looked at ways to diversify the economy, and that included manufacturing. For every job created in manufacturing, you get three jobs,” Ray said.
He added the time has come to tap into an unprecedented confluence of three factors: technological developments like smart manufacturing, restructured demand in the booming ecommerce era, and a varied inventory of commercial and industrial sites. All this is happening at a time when Florida’s population is growing by roughly 300,000 people a year and that spells opportunity.
For every job created in manufacturing, you get three jobs. -Lake Ray, President of the First Coast Manufacturers AssociationClick To TweetTRANSPORTATION INVESTMENT HELPS GROW ECONOMY
Florida’s leaders want to grow the economy. Over the past decade the state has made multi-billion dollar investments in transportation infrastructure to stay globally competitive and leverage other state assets to attract new businesses and jobs. Building more efficiency and economies of scale into Florida’s supply chains helps Florida businesses compete now and in the future.
There has been heavy investment in Florida ports too. Equipped with the right intelligence, infrastructure and initiative, Florida ports will continue to move more and more of the state’s consumption, raw materials and production. According to the Florida Seaport Transportation Economic Development Council’s five-year seaport mission plan, in 2019 Florida seaports moved nearly 112 million tons of cargo valued at $86.6 billion. Their five-year capital improvement plans tally $3 billion.
JAXPORT’s capital investment plan starting in 2019 outlined $656 million in expenditures. Better facilities means more competitive global access, and that’s the way forward for Northeast Florida.
Transportation investments stimulate other industries. Jacksonville imports everything from furniture and consumer electronics from China and Vietnam, to new automobiles from Japan and Mexico, and pharmaceuticals from Puerto Rico.
Robert Peek, Director and General Manager of Sales and Marketing for JAXPORT, said, “Consumers and the industries that serve them depend on JAXPORT’s competitively priced, regularly scheduled container liner services to collect globally sourced goods. The port also exports everything from US-built automobile exports, to forest products and agricultural goods.”
TARGETED BUSINESSES
Enterprise Florida tries to attract industries that best match the state’s assets, which include competitive costs, a large talent pool, comprehensive infrastructure, global connectivity, and a huge market. The industries are: aviation and aerospace, life sciences, advanced manufacturing, defense and homeland security, information technology, financial and professional services, logistics and distribution.
TECH FORWARD
Educating young people to help create the best possible pool of talent for the future is a statewide initiative that also attracts manufacturers and DCs. The University of Florida is developing a world-class artificial intelligence (AI) supercomputer with the objective of deploying AI training in every single university discipline, from engineering to the arts. Giving students the tools to apply AI across a multitude of areas will “improve lives, bolster industry, and create economic growth across the state,” according to UF’s announcement in July 2020.
Amanda Bowen is Executive Director of the Manufacturers Association of Florida. Bowen said collaboration has been important to the state’s business case. “In this state, we’ve got industry working with tech leaders, communities, and educational partners – we have high school students working in a manufacturing program and making products that are on the international space station right now. It’s a perfect marriage.”
Ray said, “We are looking at AI and the telemetry of manufacturing in Northeast Florida. There are companies that do not exist today that will exist and thrive in five years. Manufacturing is becoming better, faster and cheaper. Everything we’ve known before is on the board to be transformed. It will be transitional, but every industrial age ends up bringing more jobs and a higher standard of living.”
TIMING IS EVERYTHING
Technological advancements are a primary trigger for recent decisions to locate manufacturing and distribution-based businesses in Florida. In the Jacksonville region, houseware product manufacturer Hans-Mill Corp, and solar module manufacturer JinkoSolar have both introduced successful advanced manufacturing facilities.
The time is also now for ecommerce, distribution and fulfillment centers. Aundra Wallace, President of JAXUSA Partnership, said, “In Jacksonville, Wayfair, Amazon, and 11 other ecommerce companies have announced new facilities over the last few years.”
Other factors accelerating the move of manufacturing and DCs into the state include the continued availability of affordable land and sites, even the large footprint locations and spec buildings often wanted by in-a-hurry ecommerce facilities. Peek said that Northeast Florida offers more than 144 million square feet of warehousing space ready to handle a variety of cargo types. The region also has an enviable inventory of ready-to-go property.
SOLID CASE FOR MANUFACTURING IN FLORIDA
The case for manufacturing in Florida, according to Ray, has grown stronger as the cost of labor falls as a percentage of the cost of goods sold. The cost of materials and energy have becomes more influential in attracting manufacturing.
“The world wants Florida’s products,” said Ray. Florida makes quality products, and stands behind them with effective quality control and quality assurance. It comes down to trust, Ray said.
“Our labor cost is higher but the differential may only be about 5 percent. Companies are picking up and moving here because of technology and the fact that we can get things done faster. Our productivity is higher than anywhere else in the world. The world is willing to pay 5 percent or so more for our products,” said Ray.
Florida manufactures: aerospace products, beverage cans, vacuum trucks, pipe, men’s grooming products, bullet-proof vests, contact lenses, pacemakers, fishery products, acoustical panels, batteries, solar panels, and many more products, according to Ray.
Located in Green Cove Springs, employee-owned vacuum truck manufacturer Vac-Con is a poster child for manufacturing in Northeast Florida. As a worldwide distributor, it uses JAXPORT as its preferred port for shipments overseas. “As an OEM with an export arm, the port is a vital asset to our continued success. Having the port in our backyard allows us the opportunity to better manage our logistics cost for these overseas orders. The JAXPORT team fosters the benefits that a local port has on our business, due to their understanding of our needs and the demands of our international customers,” according to Blake Brown, Vice President of Operations for Vac-Con.
One of the FCMA’s goals is to introduce manufacturers to regional advantages, such as JAXPORT. “Businesses benefit from having a port nearby,” said Ray, whether it is used for importing raw materials, exporting finished product, or storage and warehousing. The Foreign Trade Zone is another important benefit – there are cost savings to be had by deferring duties on many products including manufacturer’s raw materials, especially high value materials.
Bowen described manufacturing as having been less than glamorous in the not-too-distant past, and said sometimes the misconceptions persist. “Technology has given us the opportunity to rebrand manufacturing, and to expand the industry. Florida offers such a perfect location. You really couldn’t find a better place to build a manufacturing hub for the world,” she said.
Bowen said one of the state’s best assets is that it is a melting pot for manufacturing trends and developments. The ability of our industry and educational partners to collaborate and “work through the tech” has been a strength. Florida companies support and learn from each other and that in turn allows manufacturers to adapt quickly. “Sometimes the collaboration leads to tech breakthroughs. Many manufacturers are small businesses. Access to or even collaboration with household names like Lockheed Martin and Tesla can be transformational for them,” according to Bowen.
The Manufacturers Association of Florida supports initiatives like UF’s artificial intelligence objectives. “States that don’t work together on things like blockchain, AI, 3D printing, and robotics will get left behind. Florida is supportive of moving forward and not holding things back,” said Bowen.
HIGH-TECH MANUFACTURING STREAMS
Manufacturing for high-tech industries such as aerospace, and also for low-tech products whose makers are turning to advanced manufacturing business models, are an excellent fit for the state of Florida, according to Ray.
For example Florida doesn’t have any auto makers. It was long thought impossible, but with the advent of AI and automated manufacturing, there might eventually be a place in the state for auto manufacturing. Louis Yiakoumi, a UK-based auto industry expert, founder of Automotive Logistic Group and Chief Connector at LConnect, said, “Setting up a new manufacturing plant is a very expensive process … There may be an opportunity with the new carmakers who are growing at a faster rate than ever,” such as the new electric vehicle makers – Tesla, Rivian, Lucid Motors and Nikola.
“Perhaps the new plants may be contract manufacturers,” which is common in the tech industry, said Yiakoumi.
Florida works hard to attract companies like these, and one innovative tool made available to help manufacturers is a supply chain called Connex Florida. It contains in-depth information on a broad range of Florida manufacturers, along with detailed search functions to highlight specific production capabilities, certifications, equipment, material types and more, according to Enterprise Florida. The tool aims to help manufacturers better connect with each other, be discovered, and increase business opportunities.
JAXUSA does something similar with its new GIS web tool that provides information to business owners, brokers, site selectors and others. “The database even provides maps of available workforce and demographic data, and helps provide incentive information. We want to make it easy to choose Jacksonville,” said Wallace.
Florida is on a mission to expand its economy by attracting many different industrial sectors. JAXPORT is a critical partner in this mission, driving economic prosperity in Northeast Florida and throughout the state.
