The most recent issue of Business Facilities Magazine takes a look at the progress of “advanced manufacturing” across America and highlights a few states that seem to be moving in the right direction. Oklahoma is featured prominently for its efforts in the aerospace and energy sectors.
Oklahoma’s advanced manufacturing industry is soaring with activity in aerospace, energy and other high tech industries and is supported by a hub of collaborative partnerships—from higher education and the Oklahoma CareerTech system to local economic development organizations and industry associations, the story says.
Employing approximately 132,000 Oklahomans, manufacturing now generates more than 10 percent of the state’s economy and plays a vital role in many other key industries. From 2010 to 2015, the state saw manufacturing jobs increase by 6.8 percent, outpacing the national average.
“Oklahoma is doing a terrific job in helping our manufacturers understand the changing dynamic of the manufacturing industry and how to best embrace it,” said Deby Snodgrass, Oklahoma Secretary of Commerce and Tourism. “While a great deal of our manufacturing is tied to the oil and gas sector, a large percentage has diversified into aerospace and other high-tech areas. This positions our state well to take advantage of advanced manufacturing concepts.”
For example, the Oklahoma Center for the Advancement of Science and Technology (OCAST), along with the Oklahoma Manufacturing Alliance and i2E (Innovation To Enterprise), form the Oklahoma Innovation Model, an integrated solution for innovation and real-world commercialization. OCAST funds qualified research, i2E then delivers concept validation and secures growth-stage capital.
“The Manufacturing Alliance helps ramp innovation from the concept or startup-stage to full-scale manufacturing implementation,” said Snodgrass. “Together it provides the best return on investment in the creation of high-wage jobs, especially in traditionally underserved rural areas of the state.”
Another example is the Oklahoma Manufacturing Alliance, which works to transfer technology developed through research and push the industry forward.
“The Oklahoma Manufacturing Alliance is where the rubber meets the road—sometimes literally—in the commercialization of technology,” said Snodgrass. “The alliance partners with numerous organizations throughout the state to combine local expertise with state and national resources.”
One of their key partners is Oklahoma’s renowned CareerTech system. CareerTech provides industry and company specific training at no-cost or low-cost through the nationally recognized Training for Industry Program. This training can be delivered on-site, in mobile training units or at a nearby technology training center.
In addition, Oklahoma offers one of the best incentive packages in the nation. The state’s Quality Jobs Program offers up to 5 percent cash back for qualifying jobs. Attractive options include a 5-year property tax abatement in both real estate and personal property and a sales tax exemption on the purchase of machinery, goods and energy used in the manufacturing process.
Consequently, Oklahoma is a hub of aerospace activity with many operations that focus on aerospace and manufacturing parts for the aerospace industry. Two of the latest locations and expansions include Commercial Metals Company (CMC) and Ferra Aerospace, Inc.
In July 2016, Commercial Metals Company (CMC) announced it will locate its second technologically advanced micro mill in Durant, Oklahoma.
This new investment will mirror CMC’s existing micro mill in Mesa, Arizona and will be built with improved technology developed from CMC’s operating experience with the world’s first micro mill, which CMC successfully commissioned in Mesa in 2009. The addition of a second micro mill to CMC’s portfolio of highly efficient, customer focused and cost effective steel production facilities will enhance CMC’s position as a leading supplier of long products in the U.S. market.
The Oklahoma micro mill, utilizing Danieli technology and equipment, is expected to be commissioned in the fall of 2017 and to create approximately 300 jobs in the Durant area. The direct and indirect investment is expected to be in excess of approximately $250 million. CMC expects that its investment will be funded from internally generated capital.
“The location of the mill in Durant, Oklahoma, 80 miles north of Dallas, Texas, will allow us to better serve a growing North Texas market as well as expand into markets in Oklahoma, Kansas, Nebraska, Arkansas and Missouri,” said Joe Alvarado, Chairman, President and CEO of CMC.
Activity and growth in and around the Dallas market has been huge over the past decade. Oklahoma has positioned itself well as a lower cost alternative to serving the rapidly growing I-35 corridor as well as the North Texas area.
“The facility will produce low cost, high quality steel products, which will complement our existing manufacturing capability to better serve our customers,” said Alvarado. “This new micro mill will also complement CMC’s existing recycling and fabrication footprint, enhancing CMC’s ability to further leverage our raw material supply chain and optimize product mix within our existing operations.”
In December 2015, Australian-based Ferra Aerospace Inc. held a groundbreaking in Grove, Oklahoma, for a new 35,000-square-foot plant. The company manufactures aerospace parts, including air frame and wing components. Ferra is a supplier to the some of the largest organizations in the world, including Boeing, Lockheed Martin, Northrup Grumman and Airbus. Ferra expects to employ 100 workers by 2020.
Mike Tackkett, Ferra project manager, pointed to the aerospace growth in Grove, including aerospace company Pride Plating, as a key factor in choosing the community.
“Pride Plating is well known worldwide, and we started using them,” Tackkett said. “We also needed machining suppliers, and Grove was well situated—close to a lot of great suppliers.”
Ferra Director Karl Strauss said the rural setting, the community, state support as well as support from other businesses, were all reasons he’s chosen Grove for the Ferra expansion.
“We could have built in Los Angeles and the city would have said, ‘This is just another business,’” said Strauss. “Everyone in Grove has been friendly and welcomed the company.”
Companies can also take advantage of the state’s low power costs, which are 28 percent below the national average with an average industrial price per kilowatt-hour of 4.35 cents. Oklahoma, which is part of the Southwest Power Pool, is one of the most reliable states when it comes to electricity. Peak demand reserve margins are 38 percent, compared to other regions which are as low as 15 percent.