2001 SB&D Investment 100

Record Investment Total Set - Power Plants Lead Big Deal List

Threshold of $80 Million Ties Last Year's Best-Ever Mark

By Lee Burlett

The year 2000 was a good one for the South in regards to corporate investment. If the 2001 SB&D Investment 100 is any indication, total corporate investment in the region probably set an all-time high. This year's 100 largest investment deals in the South totaled $25.75 billion. The $25.75 billion spent by companies making up the Investment 100 topped last year's then record total of $24.6 billion. In 1999, the Investment 100 created a total investment of $23.8 billion.

This year's Investment 100 featured two deals topping $1 billion (Turner Broadcasting-Atlanta-$1.2 billion and Infineon Technologies-$1.1 billion-Richmond). In comparison there was but one besting the magical $1 billion investment level on last year's Investment 100. The 1996 SB&D Investment 100 still holds the record with five $1 billion-plus deals making the list.

Last year's SB&D Investment 100 created a threshold of $80 million, the highest ever. This year's "100" threshold tied that mark created in 2000. Any deal that generated an investment of $80 million or more made up the top 100 corporate investments announced in the South in calendar year 2000.

Industry Trends

Industry and political leaders in California will study this year's Investment 100 with great envy. Leading the 2001 SB&D Investment 100 for the second consecutive year were electric power plants. But this year, a new addition to power generation made the list: wind farms. These "green" power generators are beginning to pop up in the western South, especially in Texas and Oklahoma. Look for more of them on next year's list.

There are 20 power plants on the 2001 Investment 100, down one from last year's record of 21 power plants making the 2000 Investment 100. The 1999 SB&D Investment 100 featured 12 power plant announcements. The 41 new power plants built in the South the last two years proves that the region is serious about meeting the energy needs of prospective industry now and in the future. New electric power generating facilities were built in Kentucky, Tennessee, South Carolina, West Virginia, Oklahoma, North Carolina, Texas and Louisiana in 2000. Louisiana led all Southern states with 10 new power plants announced in 2000.

Placing second, with 11 deals making the top 100 investments in the South for 2000 is the Internet services industry. This high tech sector is flourishing in Northern Virginia. There's no question that Northern Virginia is the IT capital of the South right now. Of the 11 largest Internet related investments in calendar year 2000, eight were announced in Northern Virginia, specifically Fairfax and Loudoun counties. It remains to be seen if this relatively new capital intensive industry makes a mark on the Investment 100 next year after the recent Net meltdown. Yet, in 2000, the Internet business in the South saw some incredible cash infusions, led by America Online ($555 million-Prince William County, Va.), MCI WorldCom Web Hosting ($210 million-Loudoun County, Va.) and Archon Group ($200 million-Loudoun County).

A couple of traditional Southern stalwarts follow the new-rich power generation and Internet services industries on this year's Investment 100. Checking in with 10 of the largest 100 capital investments in the South for calendar year 2000 is the almost always dependable wood products and paper industry. With over 100 million people, the American South is the most populated region in the country. Yet, there are probably 1 trillion-times (if not more) trees than there are people in the South. This is a very "green" region and the wood products industry thrives here, especially in the South's rural areas. The wood products sector certainly thrived in 2000 with Willamette Industries ($475 million-Kingsport, Tenn.), Weyerhaeuser ($300 million-Valliant, Ok.) and Bowater ($281 million-Catawba, S.C.) sitting at the top. Without this vital industry, many rural regions of the South would not be as economically viable as they are today. In fact, wood products employs more people in several Southern states than any other industry.

The industry that sits in fourth place in the Investment 100 is the always active automotive sector. Nissan chose the Jackson, Miss.-MSA for its new $930 million motor vehicle plant. The company's choice solidifies the fact that the South is quickly becoming the nation's most attractive automotive manufacturing and supplier location (see articles page ___). In just 20 years, Nissan (two major plants), Mercedes, BMW, Toyota, Honda, Saturn, General Motors and Volvo have picked the South for their primary North American manufacturing facilities. As I write this, automotive suppliers are combing the South for sites with a great sense of urgency. This region is proving that it is a major automotive player. You can read what experts say about the future of automotive in the South on page __.

Of the top 25 investment deals announced in the South in 2000, six came from the automotive sector. More impressively though, five of the six deals made up almost one-half of the South's top 12 investment deals announced last year. Those five massive investments were Nissan ($930 million-Canton, Miss.), General Motors ($800 million-Oklahoma City), Mercedes-Benz ($600 million-Vance, Ala.), Nissan ($500 million-Smyrna, Tenn.) and Nissan ($500 million-Decherd, Tenn.). The top five automotive deals made in the South in 2000 created nearly 10,000 new, high-paying jobs.

Telecommunications and financial services posted decent investment years in 2000. Capital One made huge investments in Virginia last year. MCI/Worldcom, the most prolific corporate member of the SB&D 100 over the last nine years, kept its hitting streak going with one deal posted on this year's "I-100." Fujitsu turned a $500 telecommunications deal in Texas and there were several other impressive telecom and financial services deals done last year in the South.

The semiconductor industry, which continues to be the elusive darling of many states in the South, turned in another lame year. While Infineon Technologies expanded to the tune of $1.1 billion (that's with a "b") in Richmond and Dominion Semiconductor also expanded ($700 million) in Virginia, nothing happened in Florida and only one small (if you call $100 million small) expansion occured in Texas. That's a mere three major semiconductor deals in the South for 2000. Six semiconductor deals made last year's Investment 100, one in 1999 and none in 1998. In comparison, there were 10 that made the 1997 I-100 and 12 in 1996. If anything, the semiconductor industry's short-range future in the South is unpredictable. However, with California's power supply problems, that could change. Regardless, Southern states shouldn't fall too in love with the chip biz. It's fragile, unpredictable and other than Virginia and Texas, no state in the South has shown it can land those deals with any kind of regularity.

Also making a no-show this year was the aerospace and aviation industries. Since this magazine added Kansas to its coverage last year, we had hoped to see some added punch in the aerospace and aviation sectors. Aero was a no go this year. Only three aerospace/aviation deals made the 2001 SB&D Investment 100. But that was better than last year, when only one aero-deal made the "I-list."

Chemicals and oil and gas wimped out this year as well. That's got to make officials in Louisiana and Texas somewhat concerned, considering those two states rake in millions in taxes in that sector. Only five chemical/oil and gas deals made this year's list. In 1998, 30 of the top 100 corporate investment deals in the South were chemical and oil and gas related. What's more, 30 made the 1999 list as well. Apparently, in '98 and '99 the oil an gas industry was making the necessary investment into its infrastructure in the South and now we're paying for it.

SB&D Investment 100: The States

For the first time in the Investment 100's history, the state of Texas did not lead all Southern states in large investment corporate deals. Virginia did. Furthermore, Texas was passed this year by Louisiana and South Carolina as well. Texas' nine SB&D Investment 100 deals was its lowest in "100" history. And Virginia's total of 15 was its highest in "100" history. In comparison, Virginia turned six Investment 100 deals last year and only two the year before.

The absence of large oil and gas deals certainly affected Texas' poor performance. But what a drop it was! Last year 28 of the 100 largest capital investments in the South were announced in Texas. Compare that figure to nine making the list from Texas this year. Furthermore, last year was a subpar year by Texas standards. In 1999, 35 of the largest investment deals posted in the South came from Texas and there were 36 making the list from Texas in 1998.

It should be noted that not a single one of Virginia's 15 Investment 100 deals was a power plant announcement. The large capital deals in Virginia were almost exclusively high-tech related, such as Internet services and semiconductor announcements.

Those states that significantly increased their number of big investment deals this year from last year include South Carolina, Virginia, Tennessee, Oklahoma and West Virginia. Clearly though, Virginia and West Virginia had the largest increases. As mentioned, Virginia turned but six Investment 100 deals last year and West Virginia didn't turn a single one. This year they had six.

States that lost notable ground in this year's Investment 100 include the aforementioned Texas, Alabama, Mississippi and Missouri. States that performed about the same as last year include Louisiana, Georgia, North Carolina, Kentucky, Florida, Arkansas and Kansas. Maryland did not report.

2001 SB&D Investment 100: State Performance

State # of I-100 Deals

Virginia 15
Louisiana 13
South Carolina 12
Texas 9
Oklahoma 8
Kentucky 7
Tennessee 7
Georgia 6
West Virginia 6
Alabama 5
North Carolina 5
Florida 4
Mississippi 2
Kansas 1
Missouri 1
Arkansas 0
Maryland (did not report)

Just Missed Deals

Just missed deals, or JMDs, are those projects that are not quite large enough to make the "100," yet are large enough to merit mentioning. This year, all corporate investments between $30 million and $79.99 million were deemed JMDs (JMD slots change each year based on what the 100th largest investment in the region totals. This year it was $80 million).

Once again leading the JMD category in this year's SB&D Investment 100 is Virginia with 26 JMDs. No other state came close to posting that many JMDs. However, Florida, Georgia, Alabama and North Carolina turned 14, 13 and 12 JMDs respectively, all pretty good performances.

Not unlike this year's big list, Texas performed poorly in the JMD category as well posting only nine mid-sized deals. Last year Texas turned 14 Investment JMDs. Combining its losses from last year in the Investment 100, Texas was behind in large investment deals by 24 deals in comparison to last year. That's a significant drop.

No other states in the South saw significant decreases in their number of JMDs this year compared to last year. States that performed about the same as 1999 include Florida, Alabama, Mississippi, Kentucky, South Carolina, Tennessee, Louisiana, Oklahoma and Kansas. States that turned significantly more Investment JMDs this year include North Carolina, Virginia, Georgia, West Virginia, Missouri and Arkansas.

2001 SB&D Investment JMDs: State Performance

State # of JMDs

Virginia 26
Florida 14
Georgia 13
Alabama 12
North Carolina 12
Kentucky 10
Texas 9
Mississippi 8
West Virginia 8
Arkansas 6
Tennessee 6
Missouri 5
Oklahoma 4
Louisiana 3
South Carolina 3
Kansas 2
Maryland (did not report)

SB&D Investment 100: Per Capita Performance

To correctly measure a state's performance at garnering large corporate capital investments you must factor in the state's size and population. Economic development activity is directly related to population. For example, it's impossible to compare Texas' Investment 100 numbers with Kansas' numbers. Texas' population (20 million) is almost eight times Kansas' population (2.65 million). A better comparison on a state's ability to attract large capital investments can be done on a per capita basis. Each year we factor in the number of SB&D Investment 100 deals and Investment JMD deals turned by each Southern state per million persons.

Unlike other years that saw Alabama, Kentucky, Louisiana, Mississippi and South Carolina jockey for top position in the per capita category of the Investment 100, this year a new No. 1 has emerged. The 2001 SB&D Investment 100 per capita winner took it going away. West Virginia turned 7.77 big investment deals per one million persons. Neighboring Virginia placed second with 5.96 deals with $30 million or more in investment announced per million persons. Kentucky, Alabama, South Carolina, Louisiana, Mississippi and Oklahoma did well in calendar year 2000 on a per capita bases, too. Which state performed the worst per capita in large investment deals? Texas, with 0.90 big investment deals per one million people. Needless to say, Texas pretty much took it on the chin in this year's SB&D Investment 100. This after dominating the South in virtually every category year after year.

SB&D Investment 100/JMD: Per Capita Ranking

State # of Deals PMP*

West Virginia 7.77
Virginia 5.96
Kentucky 4.20
Alabama 3.89
South Carolina 3.87
Louisiana 3.66
Mississippi 3.62
Oklahoma 3.57
Georgia 2.44
Tennessee 2.37
Arkansas 2.35
North Carolina 2.20
Florida 1.19
Kansas 1.13
Missouri 1.10
Texas 0.90
Maryland (did not report)

*per million persons

SB&D Investment 100: Conclusion

Calendar year 2000 was an excellent year for companies making large investments in the South. By the numbers, it was the best year yet. Again, the threshold ($80 million) tied the best year to date (2000 SB&D Investment 100) and the 100 largest capital investments in the South set a new record of $25.75 billion. The automotive industry and the power generation industry continue to swell state tax coffers in the South. The wood products industry made a remarkable comeback this year. And large high-tech investment deals showed up like never before on any SB&D 100.

What didn't show this year were large investments in the oil & gas and chemical industries. New and expanded semiconductor manufacturing remained virtually undetectable, except in Virginia. While metals were nonexistent, many large investments were made in the South last year in the telecommunications and financial services industries.

SB&D Investment 100: Total Deals

Virginia 41
Georgia 19
Florida 18
Texas 18
Alabama 17
Kentucky 17
North Carolina 17
Louisiana 16
South Carolina 15
West Virginia 14
Tennessee 13
Oklahoma 12
Mississippi 10
Arkansas 6
Missouri 6
Kansas 3
Maryland (did not report)