Manufacturing Finds A Home On The High Plains

North Dakota has embarked on an ambitious plan to retain its largest manufacturer, and to lure others to the state, by creating a commerce center that, when complete, will marry air, rail, and truck transport all in one site.

BISMARCK, ND - Spread out over 240 acres adjacent to the airport, the barren tract of land on the south side of town doesn’t look like much.

But for Bismarck, and North Dakota’s now-vibrant manufacturing community, it could be a goldmine.

The city, state, and various other entities have embarked on an ambitious plan to create a center for commerce that, when complete, will marry air, rail and truck transport, as well as warehousing services, all in one site.

Several years in the making, The Northern Plains Commerce Centre is another effort by the state to maintain and attract manufacturing companies at a time when the industry is enjoying a virtual renaissance in North Dakota. The state was one of just three to grow its manufacturing job base over the past five years, and North Dakota officials have been aggressively wooing manufacturers, emphasizing the state’s highly educated workforce (in 2004, North Dakota was ranked No. 1 in states with the highest percentage of high-school graduates), its diverse population, certain tax incentives, and the relatively low cost of doing business here.

North Dakota manufacturing employment. For larger chart, click here.

But the NPCC could be the most visible sign yet of how serious North Dakota is when it comes to its commitment to manufacturing. The project has attracted more than $20 million in investment from various private and public sources, and the first phase of the project, which includes the main rail component and installation of water, sewer and utilities, should be completed by fall. Phase two will include an addition to the rail line to extend into the center of the complex to service the transload center, ramp and the intermodal area.

Rail service will be provided through Burlington Northern Santa Fe, Canadian Pacific and Dakota Missouri Valley & Western Railroads.

North Dakota rail map. For larger photo, click here.

The NPCC was conceived back in 2003, when Bobcat, North Dakota’s largest manufacturing employer, was planning to expand its operations but was concerned about the state’s existing transportation infrastructure. The increasingly competitive global marketplace was putting pressure on Bobcat to run its business in a more efficient manner.

Bobcat approached North Dakota about ways to improve the business backdrop, and Governor John Hoeven, a Bismarck native, urged city officials to come up with ideas to, essentially, keep the company from skipping town. From that the NPCC was spawned.

“Communities of this size are fairly conservative, and it’s highly unlikely we would launch an enterprise requiring at least $20 million-plus in initial investment without some serious customer being involved,” said Russell Staiger, the President and CEO of the Bismarck-Mandan Development Association. “We couldn’t build it and just sit back and wait for something to happen.”

Bobcat, a unit of Ingersoll-Rand, has a plant on the site and is currently the only formal tenant signed on as part of the NPCC, though a large agricultural-related company is expected to commit soon. The city of Bismarck recently tapped logistics company Mallory Alexander to run the facility, and among the services offered will be cross docking, transloading, international and domestic freight forwarding, bulk commodity handling, and warehousing.

Bobcat’s participation includes a 100,000-square foot manufacturing support center (MSC), which will enable existing facilities to accommodate additional fabrication and assembly. A "sequencing center" at the MSC will enable supplier components to be sub-assembled prior to shipment to existing facilities for final assembly.

The MSC also will include a "just-in-time" parts control area to support North Dakota plants, with a routing and information management system that will communicate directly with the factories' assembly lines. Bobcat has a manufacturing facility in Gwinner, ND, in the southeast corner of the state, and will be able use the rail system to ship its products to West Coast ports.

Northern Plains Commerce Centre. For larger photo, click here.

“Our long-term goal is to export all of our international business through that rail (system) at the NPCC,” said Mike Seifert, Bobcat’s director of global business development. He said the company has invested about $10 million in the project so far.

“We received just an incredible amount of support from local, state and even federal representatives relative to helping us get the Burlington Northern service to this facility,” Seifert said. While he wouldn’t discuss any economic incentives Bobcat may have been given, he said Bismarck “worked very proactively” to move the process along.

In developing the site, Staiger and others traveled to similar centers around the country, including one in Columbus, Ohio, and another in Texas. Staiger said those visits were helpful in avoiding potential pitfalls at the new center.

“Each of these sites has their own advantages and disadvantages, but it helped with things like the physical layout, where things should be in relationship to the rail lines,” Staiger said.

Shane Goettle, the commissioner of North Dakota’s Chamber of Commerce, said the biggest hurdle to overcome in turning the idea of the NPCC into reality was, not surprisingly, finding the funding. But he also said the establishment of a foreign trade zone has proven to be an obstacle.

“The property is located adjacent to the airport and that would mean companies could import products without incurring duties,” Goettle said. “We’re still working on it.”

Meanwhile, on Friday, Ingersoll-Rand said Bobcat's revenue increased by 7 percent in the second quarter compared with last year. Margins improved in the quarter, but the showing would have been better if not for higher transportation costs.

The ribbon cutting ceremony is slated for later this month.

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