Business expansions mean 600 new jobs

May 29, 2012
| By Pete Daly |
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Michigan Business Development incentives from the state government’s Michigan Strategic Fund helped persuade Amway, Center Manufacturing and MedDirect to make a total of $84 million worth of expansion investments in West Michigan, rather than out-of-state locations, with the net result being 600 new jobs here over the next three years.

The incentive awards, announced last week by the Michigan Economic Development Corp. and The Right Place Inc., are cumulatively worth $2.65 million and will enable the three employers to move forward on expansion plans, according to the state announcement.

Amway was approved for a $1.6 million incentive from the MEDC for $81 million worth of investment at its Spaulding Avenue plant in Ada, where it will increase production of its Nutrilite vitamins, minerals and diet supplements. The project will result in 50 new jobs when the expanded facility opens in late 2014, and up to a total of 200 new jobs over the three following years.

Center Manufacturing Inc. in Byron Center was given a $300,000 incentive for a $1 million expansion with 100 new jobs projected over three years for production of parts for Honda Power Sports.

MedDirect Inc., 3200 Broadmoor Ave. SE in Grand Rapids, will receive a $750,000 incentive from the state for a $2.1 million expansion project, resulting in 300 new workers being added to the payroll over three years. The company provides management services for patient customer service and patient payment accounts receivable.

Each municipality where the three companies are located is expected to provide additional support to the businesses in the form of local property tax abatements.

Amway is investing nearly $180 million in four U.S. manufacturing plants to meet growing global demand for its Nutrilite brand products; two of the investments are at facilities that will produce nutrition products for Amway in Michigan for the first time.

In addition to the Spaulding Avenue site, a new nutrition powder products plant at the Amway world headquarters complex in Ada was unveiled in February and is expected to start production this year. That investment is $24 million, with 50 new jobs resulting there.

Amway is investing $42 million in a new production facility in Buena Park, Calif., that will be completed this year. It includes a facility to support tablet manufacturing; new research and development space and pilot laboratories and a two-story office building.

In Quincy, Wash., Amway is planning a new extraction and concentration operation for ingredients grown at the company’s organic farm operations nearby, an investment of $31.8 million and 30 new jobs.

An Amway announcement states the government incentive awarded for the Spaulding Avenue plant expansion “played a key role for Amway in selecting Michigan over competing sites in other states.” Amway worked with MEDC and Right Place in making its decision to build at that site.

Therese Thill, vice president of business development at Right Place, said Amway was considering locations in 11 states for the investment that will now be made on Spaulding Avenue in Ada.

Amway has more than 4,000 employees in Michigan, and its decision to expand here “says much about our improved business climate,” said MEDC President and CEO Michael A. Finney.

Nutrition products last year accounted for 45 percent, or $4.7 billion, of Amway sales. Alticor, parent company to Amway, reported 2011 sales of $10.9 billion.

MedDirect was founded in Grand Rapids in 2000 to serve as a patient finance company. It allowed health care providers to include “elective” components in medical practices so that physicians were not overly dependent on third-party payers, according to the MedDirect website.

MedDirect soon expanded throughout the Upper Midwest, with more than 600 offices, and the company also expanded much further into providing advanced, personalized patient communications with its health care providers.

In January, MedData, of Brecksville, Ohio, a major provider of medical billing services, acquired MedDirect. “Our fear was that they were moving to where the parent company has other physical locations,” Thill said, mentioning Ohio and Illinois.

Honda’s Power Sports division will introduce several new recreational vehicles over the next two years, so Center Manufacturing, one of Honda’s suppliers, is expanding its capacity to support the new orders. The expanded production will be at the company’s corporate headquarters in Byron Center. The company has eight manufacturing sites; five in Michigan, plus others in South Carolina, Virginia and Mississippi, with more than 815 employees. It makes complex assemblies, large and small diameter tubes, fuel tanks, dipsticks, fuel caps and fabrications for markets including commercial vehicles, power sports vehicles, and general industrial, agricultural, military and automotive.

According to Right Place, Center Manufacturing chose to maintain its production of safety critical, complex vehicle frame structures in the Grand Rapids area due to the availability of highly skilled workers and engineering talent. The expansion at Center will be in direct labor, technical support and several engineering and design positions.

“The Right Place is pleased to see Center Manufacturing expand its power sports business in Grand Rapids,” said Megan Sall, business development manager at Right Place. “Our region’s skilled labor force and transportation infrastructure make West Michigan very competitive for this type of work.”

Thill said Michigan was competing with a southern state for the Honda components expansion that will take place in West Michigan.

The Michigan Business Development Program was signed into law by Gov. Rick Snyder in December to provide grants, loans and other economic assistance to qualified businesses that make investments or create jobs in Michigan. Preference is given to businesses that need additional assistance for deal-closing and for second-stage gap financing, according to MEDC.

The Michigan Strategic Fund considers several factors in making the incentive awards, including out-of-state competition, private investment in the project, business diversification opportunities, near-term job creation, wage and benefit levels of the new jobs and net-positive return to the state. Business retention and retail projects are not eligible for the Michigan Business Development Program.

The Michigan Business Development Program replaces the state’s previous MEGA program that was part of the Michigan Business Tax, eliminated under business tax restructuring legislation signed into law by Snyder one year ago.

The Right Place, working with local and state partners, reports that its work has helped lead to $115.8 million in capital investment and assisted in the retention and creation of 739 jobs in West Michigan thus far in 2012.

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