Run, do not walk, to Houston.
This is the advice of Bob Unanue, CEO of Goya Foods Inc.
Why Houston? And what’s the hurry? Speed seems to be the defining characteristic of both the city and the companies who are expanding there.
“I would urge other manufacturers to come to Houston, to take advantage of the available workforce, strong investment climate and lack of state taxes,” Unanue explains. “Soon prices of resources will start climbing. “
Goya, which has been in Houston for the past seven years, is taking its own advice and last month opened a new 350,000 square foot facility where speed is at the heart of the new operation. The expansion, which creates the company’s most technologically advanced facility, will allow the company to double its production rate and produce 1,000 cans of beans per minute.
The increased production rate will help the company accommodate predicted growth in the Hispanic market. In fact Goya purchased more land than as necessary for current production. “The extra land (130 acres) is for both distribution and manufacturing expansion, including possibly a can manufacturing factory,” explained Evelio Fernandez, vice president of Goya Foods.
The city too is in a growth pattern that just doesn’t seem to quit. Houston had the largest influx of residents of the top five metropolitan areas last year. From July 2012 to July 2013, the city grew 2.2% to hit, 6,313,158.
Employment figures flourished as well placing Houston in the top spot for U.S. industrial employment. As of Jan, 1, 2013, there were 242,212 manufacturing employees (an increase of 3% from 2012) working at 5,152 companies. (And this isn’t a fad as Houston has maintained this ranking for the past seven years.)
One company that keeps this employment ranking high, is Toshiba International Corp, which is continually adding to its Houston workforce. In the past five years the company has expanded three times and now employs 1500.
While the last expansion in July of 2013 was a $20 million investment that enabled the company to double its production of its medium-voltage adjustable-speed drive product line, it’s the company’s 2012 expansion that is of particular interest. That expansion marked the first time the company began manufacturing hybrid motors in the U.S., moving production from Japan. The plant produces 130,000 motors annually which are used in Ford vehicles.
When asked why Toshiba chose Houston for this operation, Tatsuo Doko, CEO of Toshiba International Corp. said that the city “is truly unique when it comes to the workforce. While the city has long been recognized as a global energy hub, it is fast becoming a global engineering hub out of necessity. Houston’s diverse talent pool and stability also allow us to leverage a highly- skilled workforce that typifies that of the future.”
Unanue echoes that sentiment and offers a practical reason for the workforce growth. “Investment flows to business-friendly areas, and Texas is very cost competitive compared to many other areas,” he says. “Where capital flows, people follow, so the state, and Houston in particular, is attracting skill sets necessary for future growth.”
Developing the talent to serve future needs is an angle that Toshiba succeeds at. “We have found that bringing in students on a part-time basis, while they are still at school, and giving them local projects within various departments to ensure a variety of experiences, is good for attracting capable employees,” explains Mike Ayers, general manager of Toshiba’s Houston plant.
Another strategy to attract employees to manufacturing is to shift from focusing solely on four -year degrees to looking at career skills development and all that entails, according to Bob Harvey, CEO, of the Greater Houston Partnership. “Through one of our incentive programs, the Skills Development Fund, we are involved with customizing training programs for employees through the community college system.”
Harvey also pointed out that the recent passage of House Bill 5 creates a “pathway model so we have codification of a system educating kids toward a variety of colleges and careers.”
Another valuable model is the level of co-operation between Houston’s 10-county region. A marketing program called “Opportunity Houston”, which provided $40 million in funding, aims to help create 600,000 regional jobs, attract $60 billion in capital investment and expand foreign trade by $120 billion for the greater Houston area by the end of 2015.
Foreign trade has been increasing. Last year the top two exports commodities produced in Houston grew at a healthy rate; mineral fuel and oil was up 5.6% to $50.9 billion, while industrial machinery increase 4.1% to $19.3 billion.
Exporting from Houston was a major consideration in Goya’s Houston expansion as well. “This location is strategic as an export launching pad both from Houston’s port and the Panama Canal.”
Houston’s upward projection will continue in 2014, according to the Greater Houston Partnership with forecasts an increase of 69,800 jobs this year, which will create a total of 500,000 jobs created since January 2005.
And why is this number particularly important? It’s because only two other metropolitan areas can make a claim similar to this number -- Dallas-Fort Worth and New York.