7/1/2014
Joshua L. Jarrell
The Future of West Virginia is Here!
Deputy Secretary/GeneralCounsel
West Virginia Department of Commerce
AGENDA
TELLING OUR STORY
1. WV Business Facts
•
Over $22 billion in new business investments since 2005
2. WV Department of Commerce
•
$6.2 billion in new investments since November 2010
3. WV Development Office
•
West Virginia is one of the most taxpayer-friendly states in the
4. Client success stories
nation (property, consumer, business taxes)
5. ASCENT
•
6. Derivative development opportunities
over past 7 years)
TELLING OUR STORY (CONTINUED)
•
Moody’s Analytics ranks West Virginia
4th
$126 million in tax burden removed in fiscal year 2012 ($450 million
•
Fitch Ratings affirmed West Virginia’s AA+ Rating
•
West Virginia’s Rainy Day Fund is the third best in the Country
OTHER FUN FACTS ABOUT WV BUSINESS
lowest cost of doing
business in USA
•
West Virginia ranked 3rd best fiscally managed state in America
•
West Virginia ranked 10th best place in the world for oil and gas
• WV has among the lowest utility rates in
the country
development
•
West Virginia’s cost of living is 14% lower than national average
•
Education Week ranked WV Public Schools 9th in the nation
1
7/1/2014
OTHER FUN FACTS ABOUT WV BUSINESS
• Within an 8 hour drive, businesses can
reach more than 1/2 of the U.S.
population, and 1/3 of the Canadian
market
OTHER FUN FACTS ABOUT WV BUSINESS
• WV is tied for fifth lowest turnover rate
among manufacturing industries
OTHER FUN FACTS ABOUT WV BUSINESS
• WV has one of the lowest crime rates in
the country
OTHER FUN FACTS ABOUT WV BUSINESS
• WV was the only state to cut taxes in
2012
OTHER FUN FACTS ABOUT WV BUSINESS
• WV leads the nation in home ownership
OTHER FUN FACTS ABOUT WV BUSINESS
• WV is one of only 18 states that has not
borrowed federal funds to pay
unemployment compensation benefits
2
7/1/2014
OTHER FUN FACTS ABOUT WV BUSINESS
IN SUM
WV provides access to :
• WV has reduced Workers
Compensation rates 9 consecutive
times, 62% since privatizing
1. A business-friendly climate and a productive, skilled workforce
2. Available state and federal workforce training resources
3. Low cost of doing business: taxes, labor, energy
4. A strategic location
5. High quality of life, low cost of living, unparalleled outdoor
recreational activities
WHAT IS THE WEST VIRGINIA DEPARTMENT OF
COMMERCE?
WHAT IS THE WEST VIRGINIA DEPARTMENT OF
COMMERCE?
The mission of the WV Department of Commerce is to promote and
preserve the well-being of the citizens of West Virginia by:
•
Stimulating diverse economic growth and increased employment
opportunities for all West Virginians
•
Encouraging the appropriate use of our state’s abundant natural
resources
•
Improving the safety and productivity of our work force
•
Promoting the beauty and desirability of our state as a world-class
tourism destination
WV DEVELOPMENT OFFICE
• Improve the quality of life for all West Virginians by strengthening our
communities and expanding the state’s economy to create more and better
jobs. Work in partnership with local communities.
• Organization:
1.
Business & Industrial Development - Retention, Expansion,
Recruitment
2.
Community Development
3.
International
4.
Small Business Development Center
3
7/1/2014
GESTAMP, WEST VIRGINIA
MACY’S
•
Gestamp West Virginia
•
Located in South Charleston
•
Gestamp investing $100 million in West Virginia
•
400 new jobs over 5 years
•
Tax credits, location, workforce, lifestyle all important to Gestamp
AMERICAN WOODMARK
•
Has invested over $150 million in West Virginia
•
$15.2 million new investment in West Virginia
•
Located in Martinsburg
•
Currently employs over 550
•
1.3 million sq. ft. fulfillment & distribution center
•
Tax credits, equipment loans, State Job Training Assistance, Pilot
•
Largest Macy’s facility
•
Selected Berkeley County over 157 other locations
•
1,200 full time workers; over 3,000 during holidays
•
Tax credits, location, workforce key reasons for investment in West
program with Hardy County key reasons for investment in West
Virginia
Virginia
CARBONYX, MILLWOOD
•
November 2013, Carbonyx Inc. announced it will build a new facility
Natural Gas can be a game changer for
West Virginia!
that will process West Virginia coal into carbon alloy replacements for
traditional coke, a key element in making steel.
•
Expected to create 60 jobs initially
•
Construction scheduled to begin later part of 2014; expected to take
two years to complete
•
Investment valued at tens of millions of dollars
4
7/1/2014
ASCENT
ASCENT
Parkersburg has been named as the site of choice by
the Odebrecht Organization of Brazil for an enormous
• The plants would be operated by global chemical leader
Braskem.
• Presently conducting due diligence.
 Recently applied to DEP for air quality permit and
evaluation permit under state’s Voluntary Remediation
Program.
new ethane cracker plant and three polyethylene
plants, establishing West Virginia as a hub for
natural gas production and the more sophisticated
 Feasibility analyses (Financing, supply, “does it pencil”)
business of transforming natural gas into consumer and
industrial goods
 Antero: Anchor ethane supplier – 30,000 barrels/day
ETHYLENE CHAIN
GAS-BASED MANUFACTURING CHAIN
(SIMPLIFIED)
•
Links in the chain:
1. The natural gas coming out of the ground – transportation / infrastructure /
processing
2. Ethane Cracker makes it usable – Ethylene
3. Another plant that turns ethylene into polyethylene – resin pellets
4. Converter plants – resin pellets into [bottles] wind up in shopping carts all over the
world.
SCALE OF PROPOSED CRACKER VENTURE
•
Footprint larger than 40 football fields
•
300 miles of piping
•
1,000 miles of cable
•
100,000 tons of concrete
•
Projected construction cost
of $3.8 billion
•
Every link of the chain translates into future jobs.
•
More links of the production chain in your state means more jobs you can create.
•
Thus, the more you can grow your tax base
•
Thus, the more you can then invest in education and infrastructure, etc.
WHY WV WAS THE OPTIMAL LOCATION (OUR CASE)
1. Lower Operating Costs
•
Proximity to globally competitive raw materials (feed stock) and supply chain partners =
lower transportation costs
•
Low cost energy leader
2. Workforce
•
Strong industrial workforce
•
Lowest manufacturing turnover
3. Logistics Cluster
•
Historical petrochemical hub of the region
4. Business-friendly state
•
Thousands construction jobs
•
Hundreds permanent jobs
•
No general tax increases in 18 years
•
Fiscal stability and predictability
•
Fewer layers of bureaucracy, proximity to decision makers
5
7/1/2014
CLUSTERING EFFECTS
SELLING WEST VIRGINIA
• We’ve worked very hard to build a competitive business climate
• A northeastern producer of polyethylene resin (cracker and PE plants) in the
market is like an anchor tenant (there isn’t one on this scale in our region)
• Plastic converters will have a compelling economic case to locate in the
Appalachian Basin, giving WV a competitive advantage in certain markets
• Proximity to lower cost resin, customers
• Biggest cost: raw materials and transportation
A bright and hopeful future for economic
development in West Virginia.
• reducing taxes
• getting our fiscal house in order
• On top of the fundamentals, we also provide meaningful development
assistance.
• Paperwork, language barriers, site location, incentive-road map
• These programs are available to existing companies, not just the new
companies listed.
• We work everyday with small businesses, not just big names
Thank you!
6