Arkansas' Teamwork Makes Rural Areas Attractive for Growth

By Virginia Johnson

The Natural State appears to be a "natural fit" for businesses, particularly in its rural areas. In addition to the homegrown Fortune 500 firms already located in Arkansas including Alltel Corp., Dillard's Inc., Tyson Foods Inc., and Wal-Mart Stores, countless other companies are recognizing the rewards of an Arkansas address.

Scoring High Points
One major advantage for Arkansas companies is the spirit of cooperation that exists between state government and local communities. By partnering together, these entities have discovered that they can offer outstanding benefits none could offer alone.

"Partnering is multi-layered. The state is partnering with rural communities, and rural communities in the same region are partnering with each other to offer the success factors businesses require," said Linda Merritt, communications director for the Arkansas Department of Economic Development.

A Winning Strategy
Because so much of Arkansas is considered "rural," the Arkansas Department of Economic Development is strongly committed to rural development. A key player in Arkansas' cooperative approach, this agency helps individual communities and the companies located there achieve long-term success.

Evidence of the state's commitment to teamwork, in 1999 officials from the Arkansas Department of Economic Development traveled the state listening to the needs of established companies, communities, local officials, educational leaders and economic developers. With collaboration and cooperative input, the department then became the first state agency in the nation to establish a workforce recruiting website. Overwhelmingly successful, the site received nearly half-a-million hits in its first two months. This product of teamwork allows Arkansas companies-even in the most rural areas to recruit skilled workers at no cost.

"The website is just one example of what happens when we work together in Arkansas. We accomplish our objectives to the benefit of the state as a whole, the local communities and, most importantly, the companies that choose to locate here," Merritt said.

Partnerships also exist between the Department of Economic Development and other state agencies. For example, the Department of Education, Department of Higher Education and Department of Work Force Education are working closely with the Department of Economic Development to ensure that the Arkansas work force is ready for growth. Along with the state's Customized Training Incentives Program, which provides pre-employment and on-the-job training for new and expanding industry, the groups are also partnering to provide vocational training, altered secondary curriculums and new university programs-all with the goal of economic growth.

The Power Play
One way to dominate the game is to become an active agent of change. That's exactly what Arkansas teamwork has accomplished in the state's individual communities. To ready each area for businesses, the Arkansas Department of Economic Development has developed the Arkansas Community of Excellence Program. This program, originally designed in 1992 and modified in 1998, is especially beneficial to rural areas.

"ACE is an overall strategic planning process focused on both economic and community development," explained Merritt. A community is charged with completing a self-analysis, determining the desired direction for its future, and then developing a blueprint to achieve its goals. The Department of Economic Development also encourages rural communities to form regional alliances, strengthening what each can offer.

Bringing Home the Trophy
Perhaps some of the biggest winners in Arkansas' economic development cooperation are companies that have located in rural corners of the state.

A portion of the state that has experienced particular growth is southwest Arkansas. There, a strong area partnership paid off when Ox Bodies, Inc; a leading manufacturer of dump truck bodies, flat dumps, steel flats and roll-off containers; chose the community of Nashville, Arkansas for a $7.5 million, 170,000-square-foot plant. The city of Mineral Springs and the Murfreesboro Industrial Development Corporation partnered with the Nashville Industrial Development Corporation to attract the new facility.

"We are proud to be a supporting partner in the announcement of Ox Bodies," Merritt said. "This project has been a team effort with the state and the communities working together with the company to secure a commitment to Arkansas."

According to company president, Lehman Pendley, with the Department of Economic Development's support and guidance, local communities and other Arkansas companies banded together to convince Ox Bodies that rural southwest Arkansas was the ideal location. These Arkansas "team players" performed labor surveys, located property for the plant, provided local incentives (such as free transportation and lodging during construction), and conducted employee training. Even Nashville's local businesses raised money to help with Ox Bodies' expenses.

In addition to the outpouring of support his company received, Pendley explained that a primary reason for choosing the rural South was the people. "Our experience has been that it is easier in rural areas to find good employees that enjoy working," he said.

Another company benefiting from Arkansas' teamwork is SMI Steel Products, located in the rural community of Hope. Due in large part to united efforts of state and community, SMI decided to build a new plant only three miles from its parent company. Local and state governments teamed up to offer financial incentives in the form of rebates and gifts.

"As a business already located in rural Arkansas, we knew the culture of this area. We liked the people of the area," said SMI President John Robins.

"Hope and Hempstead County were selected for these two projects primarily due to the success of the existing facility," Robins said at the project announcement. "SMI's plant in Hope has grown in large part due to the work ethic and initiative of our employees. This plant during the last few years has garnered a national reputation for quality and our corporate customers have grown accustomed to Arkansas-styled, friendly service."

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Arkansas' Natural Advantages for Business

A higher percentage of workers employed in manufacturing-22.5 percent compared with a national average of 14.9 percent

A growing work force-in the 1990s, the work force grew approximately 13.9 percent

Low cost of living

Low tax obligations through a variety of incentives, exemptions, credits and refunds

Third Time's the Charm

Rural West Memphis, Arkansas attracts major distribution center.

By Don Hampton

When Skil-Bosch Power Tools was looking to build a new distribution center, it didn't have to search far to find an ideal location. The company was already enjoying the benefits of its two manufacturing facilities in rural Arkansas. So, the choice became obvious.

"Doing business in Arkansas, most specifically on this occasion in West Memphis, makes sense," said company president Paddy McGuire.

'A solid financial decision'

Skil-Bosch is a subsidiary of the world's largest privately held corporation. The new facility in West Memphis is a $30 million project. It's a substantial investment, but one the company sees as making a great deal of sense.

"The success of our two manufacturing facilities in Arkansas led us to believe that locating a distribution center in the state would also be a solid financial decision," said Katina Xouria, the company's CFO. "The community of West Memphis proved to be ideal, with an available workforce and cooperative governing bodies."

The positive experiences Skil-Bosch has had with its manufacturing facilities in Walnut Ridge and Heber Springs helped the company reach the conclusion that rural Arkansas had a lot to offer.

A great team

The West Memphis facility will be a 750,000 to 800,000-square-foot regional distribution center responsible for delivery to all of Skil-Bosch Power Tool's North American markets.

Arkansas' central location makes it perfect for housing such a facility. And, in West Memphis, the company has found a community that is strategically positioned to meet its needs.

The location provides access to two major interstates (I-55 and I-40). In addition, Skil-Bosch will take advantage of the Union Pacific intermodal yard located in West Memphis to ship product by rail.

The city is also only 20 minutes from Memphis International Airport, and the new facility will be less than two miles from an airport with 6000 feet of runway accessible for company use.

But, beyond the geographic and transportation advantages West Memphis offered, there was more to the decision. The state economic development office and the local government tenaciously pursued the project.

"We were very aggressive in working with Skil-Bosch to make this project work out," said Sidney Runnels, director of the West Memphis economic development office. "Mayor William H. Johnson helped us all see the potential of this facility and the impact it can have on our community. We really see it as being able to complement the industries that we already have."

Impacting an entire region

The facility will create 125 new jobs, according to Governor Mike Huckabee. It's what the governor refers to as "a continuation of economic development 'good news' for East Arkansas."

And, certainly, the creation of 125 jobs in a predominantly rural area is good news. But the effect of this project goes well beyond the community of West Memphis.

West Memphis, with a population of 30,000, overshadows the rest of the communities in its county (population 50,000).

"We are a catalyst for the outlying counties that are very rural," said Runnels. "We support their economies. The Skil-Bosch facility is going to require joint efforts with all of our neighbors in order to make it work. The only way this project could have been successful in the first place was through a tremendous amount of teamwork."

"The project will help us improve the efficiency of our distribution operations, it will provide jobs to local residents, and it will bring countless other economic benefits to the state as a whole," said McGuire.

The facility will mean increased buying power and better opportunities for local residents. It will generate economic benefits for the entire region. And it may even encourage other companies to consider constructing facilities in eastern Arkansas.

So, the 'good news' for West Memphis is really great news for all of East Arkansas.

A quality situation

Skil-Bosch Power Tools was attracted not only to West Memphis' geographic location, but also to the quality workforce company leadership knew they would find. Through the operation of two Arkansas manufacturing facilities, the company had first-hand impressions of the quality of the people, the quality of life and the many other advantages Arkansas presented.

"They recognized us as a team they wanted to be part of," said Runnels.