Ohio: Plastics and Metals Thrive with Ohio's Third Frontier Project
31 Mar, 2003By: Trade & Industry Development
While the plastics and metals industries may not have always received the type of attention afforded to the high-tech industries, they remain dominant forces in the American economy and highlights of Ohio’s industrial sector. Both sectors are critical industries that the state of Ohio will support and foster in the years to come.
During 2001, just over 300 iron and steel industry establishments in Ohio employed almost 51,900 people while approximately 1,300 rubber and plastics industry companies employed more than124,000 workers. Totaling more than 176,000 jobs for Ohioans, the plastics and metals sectors are crucial to the state’s economy.
Moreover, Ohioans employed in the industries are earning above-average salaries. These skilled workers within the iron and steel industry averaged over $46,400 in wages during 2001, earning more than the national average of $43,100. Meanwhile, wages in the plastics industry vary by specialty, but are consistently close to national averages.
Part of Ohio’s success is that many of the state’s leading companies in these two industries are on Fortune’s U.S. 1,000 or global 500 lists. For example, 39 companies in the plastics sector are named, and 10 have their world headquarters in the state, including Goodyear Tire & Rubber, Dana, and Ferro. In the metals industry, 17 companies are listed, such as AK Steel, Timken, and Worthington Industries. All are headquartered in Ohio.
And the future looks bright for both industries, particularly plastics. The Ohio Department of Development (ODOD) recorded 23 major industry investments totaling $461 million by 10 steel and iron companies during 2001 and 2002. . ODOD also recorded 217 major industry investments totaling $1.3 billion by 196 plastics companies between 1998 and 2001 with Delphi, M-Tek, Owens Corning, and Plastipak Packaging being the largest investors.
Steel Numbers "Encouraging"
Leading indicators for Ohio steel producers in the first quarter 2003 showed marked increases that are probably due to the inclusion of data from International Steel Group, Inc. (ISG), which is a new member of the Ohio Steel Council.
ISG, which purchased the assets of LTV Corp. in February 2002 and began operating facilities in Ohio last May, has not been a member of the Council until recently and therefore had not been reporting data.
"With the inclusion of ISG to the Ohio Steel Council's data, we now have a clearer picture of steel production in the state," said Edward Caine, president and CEO, WCI Steel, Inc. in Warren."While the overall increase is encouraging, individual Ohio steelmakers continue to face immense challenges."
In first quarter 2003, Ohio's steel production was 3.2 million tons, an 18 percent increase from the 2.7 million tons in the same period a year ago. Steel shipments were 3.4 million tons in first quarter 2003, a 14 percent increase over first quarter 2002.
Ohio steel employment was more than 16,000 in the first quarter this year, an increase of 1.4 percent from first quarter 2002. Meanwhile, first quarter payroll was $219 million, a 15 percent increase compared to the same time period a year ago.
Capital investment spending also increased year-over-year, from $21.4 million during the first quarter in 2002 to $22.3 million this year, a 4 percent increase.
Introducing the Third Frontier Project
Ohio is no longer content to let its plastics and metals industries rest on their respective long-standing, industry-leading reputations. If the state is to maintain leading industry positions, we need to tout our expertise and skilled workforce, promote our strategic location, and acknowledge the industries’ significance to Ohio’s overall economic well-being and to the quality of life for future generations of Ohioans.
A development that will prove to be most significant to the two industries is Governor Bob Taft's introduction of the Third Frontier Project, a blueprint designed to make Ohio a leader in the knowledge economy and to ensure Ohio’s long-term economic future. The Third Frontier Project is the state’s largest-ever commitment to creating high-paying jobs and ensuring Ohio's success in the knowledge economy. The $1.6 billion in state investment is expected to be matched with an additional $4.5 billion in federal and private funding. Together, this will create a $6 billion initiative, which will focus on Ohio’s five areas of core competencies:
Instruments, Controls & Electronics
Power and Propulsion
If Ohio is to prosper in the years ahead, the need to embrace and adapt to the technology-driven new economy is crucial. The Third Frontier Project is already serving as a catalyst, and is driving the state to be globally competitive, cutting edge, high-value-added and jobs-driven.
A Focus On Polymer Research
A focus on polymer research is helping Ohio take action to support its plastics industry. We have awarded more than $5 million in Third Frontier Action Fund grants, through the Ohio Department of Development, to polymer-related research and development projects. Ohio companies and organizations benefiting from the funding include Maverick, WebCore, AlphaMicron, PolyDisplay and Theken Surgical, in collaboration with the University of Akron, Case Western Reserve, Kent State, University of Toledo, NASA Glenn and the Air Force Research Lab.
Funding and grant opportunities abound through the Third Frontier Project, through Third Frontier Action Fund grants, Wright Centers of Innovation awards and other related incentive programs.
In June 2003, Ohio Governor Bob Taft announced awards for the polymer industry totaling more than $3 million. These awards were Wright Capital Project Funds to the University of Dayton and to the National Composites Center.
One Wright Capital Fund totaling $1,2 million was awarded to Dayton's “Conductive Multifunctional Polymer Nanocomposite and Aerospace Composites,” project. The project is collaboration between the University of Dayton, the Air Force Research Laboratory, NanoDispersion Technologies, Inc., Applied Sciences, Inc., Materials Research Institute, GE Aircraft Engines and Goodrich Corp., and Aircraft Braking Systems. The award will aid in the research and development necessary to produce nanocomposite materials for use in paints, aerospace parts and fuel cells and is expected to create 40 to 70 new jobs.
"Without this money we wouldn't be able to take this technology from the lab scale to a commercial scale," said Brian P. Rice, a senior research engineer at University of Dayton. "This money enables us to take it to the next level."
Additionally, Ohio’s National Composite Center’s “Creating Affordable Large-Scale Complex Composite Products” project will receive $2 million in funding. The collaboration involves the University of Dayton, WebCore Technologies, Boeing, Ashland Specialty Chemical Company and the Air Force Research Laboratory. The project will help advance the manufacturing process of large-scale polymer parts utilized in the aerospace, defense, marine and transportation markets. The project is expected to create more than 100 jobs.
Throughout the state, Ohio is encouraging additional polymer technology initiatives through various incentives and grant programs. For example, Viztec, Inc. received $1 million for the work that may very well revolutionize display panels in cell phones and other electronic devices. The company recently relocated to Twinsburg, Ohio, and is using a license from Kent State University to manufacture plastic flexible displays for liquid crystal screens. Viztech’s technology, which combines liquid crystals with polymers, is expected to make displays in electronic devises stronger than displays made with glass.
Another success story is that of Norwegian company PolyDisplay. Trygve Vigmostad, CEO of PolyDisplay, was searching for a U.S. site where PolyDisplay could locate research offices for its work on a next-generation flexible plastic display. He chose Akron, Ohio, in part because he was impressed with the state’s government program. Vigmostad was particularly interested in the Ohio Polymer Enterprise Development, Inc., designed to help new plastics-oriented firms develop into full-scale manufacturing. The innovative company is developing a new way to tint and un-tint car windows using Pliquid crystals on thin, flexible plastic laminated to glass.
Another company that has benefited from Ohio’s unique position and state programs is M&G Polymers USA LLC, which made a move from its longtime home in downtown Akron to a new, $4.6 million research and development headquarters in nearby Sharon Center, Ohio. M&G Polymers, a unit of M&G Polimeri Italia S.p.A., has 31employees and plans to conduct research on new and improved polyethylene terephthalate, a hard plastic known as PET, and is used for bottles. The research center will support its Italian parent company's manufacturing plant in Point Pleasant, W.Va., which makes two-liter plastic bottles.
The Ohio Department of Development recently approved a job creation tax credit for the company to keep its high-paying jobs in the area. The Development Department state franchise tax credit will help retain M&G''s 31 jobs and will create an additional 16 jobs during the next several years. The new research jobs are expected to pay an average hourly wage of $36.15, and benefits account for another $18.05 per hour for a total hourly employment cost of $54.20. M&G will save approximately $182,000 during the seven years with the franchise tax credit.
It is clear that the state is taking advantage of its industry-leading polymer reputation and creating jobs for Ohioans. New uses for plastics are being discovered every day. Polymers are being engineered in innovative ways that will benefit the medical industry, the manufacturing industry, and the entire world. Ohio plans to be on the cutting-edge of these new technologies.
For more information please contact the Ohio Department of Development at (800) 345.OHIO or visit www.thirdfrontier.com. The Ohio Department of Development assists businesses and local government agencies in identifying opportunities for job creation and community development.