Manufacturing First Coast2 Manufacturing on the First Coast 2012–2013 February 6, 2012 Dear Friends: On behalf of the citizens of Jacksonville, I thank First Coast Manufacturers

Clements Publishing Company

Manufacturing First Coast

2012–2013

onthe

Sharing the First Coast Manufacturing Sector with the world

Eyebrow

Manufacturing on the First Coast 2012–2013 1

Table of ContentsJAXPORT Plays Key Role in Growth of Northeast Florida ........................... 6

International Trade is the Future of Florida Manufacturing ........................14

What’s Made Here ...................................................................................20

Manufacturers Contribute To Environmental Conservation.......................26

Florida TaxWatch Study Finds Manufacturing to be the Economic Driver of Florida’s Future ....................................................32

How FCMA Leads in the Economy, Education and the Environment .......36

How to Make Florida More Competitive for Manufacturing ....................40

Advances at FCMA...................................................................................48

This publication is proudly produced by:

Clements Publishing Co.PO Box 51000

Jacksonville Beach, FL 32240(904) 249-1719

[email protected]

PublisherMichael A. Clements

(904) 249-1719

WriterEric Cravey

(904) 349-2761

Advertising sAlesJane Bachtell

(904) 215-9467

CreAtiveBrian M. Sieber(904) 525-7371

[email protected]

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Copyright 2012-2013. Reproduction, in whole or part, of this publication

without expressed or written consent of the publisher is prohibited. All claims, materials, and photos fur-

nished or used are to the publisher’s knowledge, true and correct.

Clements Publishing Company

2 Manufacturing on the First Coast 2012–2013

February 6, 2012

Dear Friends:

On behalf of the citizens of Jacksonville, I thank First Coast Manufacturers Association for its dedication to this community. Because of FCMA’s commitment to excellence in the manufacturing sector, as well as its dedicated activism and regional leadership, our city is not only growing, it is on the path to prosperity.

As mayor, I am committed to economic development, job creation, environmental responsibility

and port expansion. FCMA is a vital partner in our city’s efforts to achieve these goals. Jacksonville is paving the way for a thriving future, one that will enhance the quality of life for its residents and its economy exponentially. And, FCMA plays an integral role in reaching that future.

I appreciate FCMA’s partnership as we work to take Jacksonville to the next level. Thank you for

all you do to make Jacksonville a leader in international business and local economy.

Sincerely,

Alvin Brown Mayor

AB/skk

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In Washington DC, Tallahassee, Florida or our own First Coast Florida; our people and leaders are beginning understand the importance of our manufacturing base. As jobs have drifted away from the nation, the question continues how do we get create jobs and improve our workforce. The public attitude is improving and we find manufacturers in the center of economic growth and opportunity Manufacturing on the First Coast will discuss several issues of importance and explore opportunities in the manufacturing sector of the economy. Our focus in the fifth edition is international trade; freight movement through Jaxport; our Tax Watch Study conducted last year; and businesses in the region. First Coast Manufacturers Association (FCMA) produces the publication in an effort to inform our members and the public of manufacturing activities in our six county area. Manufacturers in our area produce numerous and varied products—including aircraft, medical instruments, food products, chemicals, paper and building materials. Leading edge technologies and products have been on the First Coast for years. FCMA continues to emphasize three basic objectives our goals to add 25,000 industrial jobs by 2015:

Improve the Economy – Manufacturers’ large capital investment requires above average employees that are paid on average 20 to 30 % above the average wages for the region. The large capital investment means a continuing increase in direct and indirect jobs. Nearly 20% of the major capital projects in our region since 1997 have been by manufacturers. Manufacturers pay 25% for the tangible personal property tax, thereby providing increased stability for local and state government. Educating the Workforce – Manufacturers in today’s markets require intellect and skill to operate and maintain the highly technical equipment necessary to be competitive. Partnerships with local educational institutions from K-12, community colleges and higher institutions of learning have been developed to educate the workforce. Emphasis is placed by employers on in-house education using FCMA resources to insure that First Coast workers perform at a world class level. Protecting the Environment – Green and sustainable energy saving processes have been in place before it became popular with the public. Manufacturing continues to be involved in protecting air quality and water resources, especially the St. Johns River. Conservation and reuse of our resources is of prime importance to our manufacturers. Industry’s environmental expertise in recycling and improvement of air and water quality is continually shared with the FCMA community.

Learn more about FCMA, by visiting our website at www.fcmaweb.com. We are very proud of our First Coast manufacturers and their continual efforts to improve the quality of life in Northeast Florida. Please read and enjoy Manufacturing on the First Coast fifth edition. If we can be of assistance to you please let us know. Lake Ray President First Coast Manufacturers Association

Can You Protect Jobs And The Environment At The Same Time?Our Answer Is, Yes.

If Georgia-Paci c’s Palatka mill were to vanish tomorrow, 1,000 Floridians would be out of work. Those people love and respect a natural environment that we’ve spent 12 years and $200 million trying to protect. Today, the water we are returning to the environment is cleaner. And we’re proving that good jobs and a cleaner environment can, in fact, go hand-in-hand.

cleanerstjohns.com©2011 Georgia-Paci c LLC. All rights reserved. The Georgia-Paci c name and logo are owned by

Georgia-Paci c LLC


Father Time may have ushered in

2012, but if you ask anyone in

the Northeast Florida business

community what year is constantly on

their minds, they will probably answer

2014, the target year for completion

of a massive widening project in the

Panama Canal.

The multi-billion dollar canal widen-

ing will increase the volume of trade

and the number of trading partners

between the U.S. eastern seaboard and

Asia. When the project is completed,

one U.S. Southeast seaport will serve as

the primary port of call for the gigantic

ships that are being engineered specifi-

cally to flow in and out of the widened

Panama Canal.

And the reason the Panama Canal

project is on every Northeast Florida

business person’s mind is because of

what’s at stake.

Officials project as many as thou-

sands of new jobs lie in the balance if

Jacksonville becomes the primary U.S.

Southeast port of call for these larger,

post-Panamax class vessels. The Jack-

sonville Port Authority, also known as

JAXPORT, is competing against Charles-

ton, S.C. and Savannah, Ga. for the

lucrative larger fleet.

However, before the post-Panamax

vessels can enter the Port of Jacksonville,

the local terminals will require a variety

of infrastructure improvements. Officials

estimate costs of the outlined infrastruc-

ture and port deepening improvements

range as high as $1.2 billion.

“The most important investment this

nation and state can make right now are

improvements to the harbor, which will

allow us to maximize the job creation

benefits the port offers,” said Paul An-

derson, CEO of JAXPORT.

The first major harbor improvement

is fixing the cross currents where the

St. Johns River meets the Intracoastal

Waterway, an area of the river known

as Mile Point. “Because of Mile Point,

currently the largest, most heavily-laden

ships are restricted from calling on our

terminals to two four-hour windows each

day,” Anderson said. If Mile Point is not

fixed, the river will effectively remain

JAXPORT Plays Key Role in Growth of Northeast Florida


JAXPORT Plays Key Roleclosed to larger vessels for 16 hours

a day. Lost time equates to lost dollars

and lost jobs that will choose other ports

of call that can accept the larger vessels.

The second harbor improvement is the

post-Panamax deepening project, which

the U.S. Army Corps of Engineers is

currently studying. The major challenge

this project addresses is the depth of

the harbor whose current 40 feet needs

increasing to “somewhere between 45-

and 50-feet,” said Anderson, in order

to become a viable post-Panamax trade

stop.

As JAXPORT works with the Corps to

advance these projects, the port is con-

tinuing to grow business in Northeast

Florida.

JAXPORT recently came off its tenth

straight year of increasing revenue de-

spite a sluggish economy, and recently

both Moody’s Investor Services and

Fitch Ratings affirmed JAXPORT’s sound

financial performance with stable rat-

ings. Container traffic to JAXPORT in-

creased nine percent in 2011 with 8.1

million tons of goods moving in and out

of the seaport.

Overall, the port and ancillary busi-

nesses that involve the shipping and

logistics sector account for 65,000

jobs in Northeast Florida. Factor in the

multiplier effect and the Jacksonville

port accounts for an annual economic

impact of $19 billion a year on the

Northeast Florida economy.

“Every dollar invested in seaport

progress returns seven to the commu-

nity,” said Anderson. “The return on

investment is so significant that we have

no choice. It’s for our children and our

children’s children that we must build

the port of the future.”

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Paul Anderson, CEO of JAXPORT


JAXPORT Plays Key Role

The First Coast Manufacturers As-

sociation has always been a strong

advocate for the port, and in 2011, the

group expanded efforts to raise aware-

ness that all of Jacksonville’s port op-

erations can become the major driving

force for economic development in the

region. And when the region flourishes,

the manufacturing sector will grow as

well. And when manufacturing grows,

the quality of life is enhanced for all.

“We are grateful for the support and

understanding of our area’s manu-

facturers,” Anderson said. “Ensuring

this seaport maximizes its potential is

everyone’s business as it impacts our

economy, our quality of life and the

future attractiveness of this region.”

Anderson has taken the case for the

Mile Point project directly to Congress.

In October 2011, he testified before the

U.S. House Water Resources and En-

vironment Subcommittee of the Trans-

portation and Infrastructure Committee,

whose chair is U.S. Rep. John Mica of

Florida.

A multi-pronged approach is un-

derway to capture funding for the

infrastructure upgrades at JAXPORT. At

press time, a high-ranking panel within

the U.S. Army Corps of Engineers voted

unanimously to approve the Mile Point

project. The five-person Civil Works Re-

view Board’s vote now goes to various

state and federal agencies for review

and comment. After the comment pe-

riod, the Corps of Engineers will present

and approve a final Chief of Engineer’s

report recommending the project for

approval and funding in Congress.

With an increase in goods flowing in

and out of the port, other related lo-

FY2010 JAXPORT tonnage

Total: 8,043,925

• Containers: 4,419,331 • Bulk: 1,515,161• Vehicles: 1,119,080• Breakbulk: 990,353

Container TEUs: 826,580

Vehicle units: 518,880

FY2010 top import trade lanes by tonnage

1. Puerto Rico

2. Brazil

3. Finland

4. Japan

5. People’s Republic of China

FY2010 top export trade lanes by tonnage

1. Puerto Rico

2. Brazil

3. Saudi Arabia

4. People’s Republic of China

5. Venezuela

Key Statistics

*Fiscal Year 2010 began Oct. 1, 2009 and ended Sept. 30, 2010.

Source: JAXPORT


JAXPORT Plays Key Rolegistical infrastructure, such as rail lines,

will need upgrading. Officials are cur-

rently planning a railroad hub known

as an Intermodal Container Transfer

Facility or ICTF at JAXPORT’s Dames

Point facility. The ICTF, projected to

open as early as 2014, will comple-

ment existing on-dock rail facilities at

JAXPORT’s Talleyrand Marine Terminal

and Blount Island Marine Terminal and

will further enhance the competitive-

ness of the TraPac Container Terminal

in providing swift, efficient movement

of growing cargo volumes through

Northeast Florida.

In December 2011, the U.S. Dept.

of Transportation announced that JAX-

PORT will receive a $10 million grant

for development of the ICTF. The grant

comes from the U.S. Department of

Transportation and its Transportation

Investment Generating Economic Re-

covery or TIGER grant program. Federal

funds will be added to the $20 million

already allocated from the State of

Florida Dept. of Transportation to fund

the development and construction of the

new facility.

As part of the federal TIGER program,

public and private entities are encour-

aged to collaborate on projects they

view as having mutual benefits. The

State of Florida, the City of Jacksonville,

Jacksonville-based railroad giant CSX

Corp. and JAXPORT banded together to

compile the TIGER grant.

Efforts are also underway to obtain

more state funding for JAXPORT. State

Rep. Lake Ray, who also serves as the

new president of FCMA, has introduced

a bill that will boost funding for all of

Florida’s ports by way of the Florida

Changing Global Trade Lanes

Historically, the major trade flows to and from the United States have been over the surface borders with Canada and Mexico, across the Atlantic Ocean with Europe, and across the Pacific Ocean with Asia (Figure 2.3). These trade patterns are rapidly realigning in response to several trends:

• Strong population and economic growth in the southern United States is drawing more trade to this region;

• A series of labor disputes and rail service disruptions, along with rising congestion, increased costs, more stringent environmental policies, and increasing security concerns have prompted steamship lines to reduce reliance on Pacific Coast seaports and spread cargo to the Atlantic and Gulf Coasts;

• The widening of the Panama Canal will reduce ocean carrier costs and the time associated with an all water route between east Asia and the U.S. Atlantic and Gulf Coasts;

• Increased production and export activity in India – which today accounts for only a fraction of U.S. imports – and other parts of south and southeast Asia may favor trade lanes to the eastern United States through the Suez Canal;

• More stable economic growth and a shift in low cost production to eastern and southern Africa is creating new trade lanes across the south Atlantic Ocean; and

• Continued growth among Florida’s traditional trading partners in Latin America and the Caribbean, and the potential reopening of relations with Cuba, will increase north-south trade through the Atlantic Ocean, Caribbean Sea, and Gulf of Mexico.

Figure 2.3 Global Shipping Lanes and Gateways

Top 30 Global Container Seaports2009 Volume in Twenty-Foot Equivalentswith Commercial Shipping Lane Density

30 million

10 m

5 m

Source: Container volume from American Association of Port Authorities, 2009. Commercial shipping activity from National Center for Ecological Analysis and Synthesis.

6 6

Sour

ce: F

lorid

a C

ham

ber F

ound

atio

n


JAXPORT Plays Key RoleSeaport Transportation Economic De-

velopment Program.

Created in 1990 by the state legisla-

ture with the understanding that each

of Florida’s 14 working ports operate

independently, the Florida Seaport

Transportation Economic Development

Program Council solicits projects annu-

ally from each individual state seaport.

Ray is working on legislation to increase

FSTED funding to $35 million for larger

ports and $15 million for Florida’s

smaller ports. Ports apply for FSTED

funding through the Florida Department

of Transportation.

“These funds could be used for port

infrastructure improvements; it could be

for projects like Mile Point, new struc-

tures, or new equipment, such as gantry

cranes,” Ray said.

However, Ray suggests the best use

of FSTED grants locally would be to

enhance the intermodal capabilities at

the port.

“The ICTF is the first thing we’ve got

to have before we can really be serious

about freight movement in Jacksonville,”

Ray said. “If we’re going to change the

drivers of what we’re doing, we’ve got

to be able to rapidly and effectively

move freight.”

In the long-term, Ray said, the de-

velopment of a flourishing ICTF that

inter-connects rail and tractor-trailers

and an improved JAXPORT where post-

Panamax ships dock daily will positively

impact tens of thousands of jobs in the

region. Ray and Anderson encourage

the entire community, not just manufac-

turers, to support the port’s economic

development initiatives.

Ray envisions the development of a

high-tech intra-state rail system that

would connect to other Florida seaports.

The net result would be this massive

super-powered network of logistics and

inter-modal commerce that hums loudly

as it drives the state economy and gives

Florida national, if not, international

exposure.

“When we develop a logistical freight

plan for the state, all of our ports

would be connected together with a

comprehensive rail system,” Ray said.

We’d be able to literally connect to the

world crisscrossing the state with rail

and truck to accommodate Florida’s

manufacturers.”

Ray and Anderson encourage ev-

eryone to join the grassroots JAXPORT

initiative online at www.SupportOurPort.

com in addition to writing your city

council member and your members of

the Florida Legislature and U.S. Senate

and U.S. House of Representatives in

support of funding for the port.

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The University of North Florida College of Computing, Engineering and Construction

The UNF connection:Research to

advance your industry

watch to alert emergency medical personnel when the wearer’s heart rate becomes erratic and in need of medical attention. Their efforts will change the way people with heart conditions live and thrive. We have ongoing research with local companies to solve specific technical problems in advanced manufacturing, controls and robotics; and our work in advanced fuel-cell technologies has attracted almost $9 million in federal support. Our researchers are not only preparing the next generation of professionals to live and work in Jacksonville, they are researching and developing the next generation of technologies that will help keep Jacksonville globally competitive.

One of the newest initiatives within the College is the establishment of a Small Business Innovative Research (SBIR) Center, to help local small business develop research proposals on new technologies and submit them to the Federal government for funding. Our initial project with a local, family owned business produced a $150,000 grant proposal to develop a new, patented technology that could significantly grow the company and lead to increased employment. We are working to pair other small companies with researchers in the college and, if appropriate, throughout the University, to submit additional proposals and provide the needed research infrastructure and support that are essential for a growing, competitive manufacturing sector.

The College is poised for greater excellence. The Dean’s Office, the faculty and the staff of the College — and our community — are here to help your com-pany and our students succeed on the path to excellence and success.

Come join us, and together we can build a better tomorrow for you, our city, state, nation and the world.

No one like you.No place like this.

The economic leadership of the United States that emerged in the 20th Century was built on a foundation of discovery and innovation driven by well-funded scientific research. Although the U.S. is still leading the world in science and research investment, there are clear indicators that other countries are suc-cessfully emulating the American model. If companies are to stay competitive in these difficult economic times, staying at the cutting edge of technological advances, from robotics and controls to new “green” processes and materi-als, is an essential part of day-to-day operations. The College of Computing, Engineering and Construction at the University of North Florida stands ready to partner with local industries to solve critical technical research issues, help develop new processes and apply the most recent scientific, engineering and computing advances.

As economic realities have forced more and more companies to abandon in-house research facilities, the importance of partnering with local research institutions to leverage limited dollars for research has grown exponentially. The result has been beneficial both for American industry and the economy. In the bioscience industry alone, the Association of University Technology Managers (AUTM), an association that represents managers of academic intel-lectual property, reports that approximately 76 percent of U.S. companies have licensed technologies from universities which grew out of research. Even in the worst economic times since the Great Depression, the partnership between universities and companies supported economic growth. In 2009, 596 startup companies formed from university research — 81 percent in the home state of the university.

UNF has developed a strong reputation of preparing our students to make sig-nificant contributions to their chosen professions, the northeast Florida region and beyond. One of the College’s hallmarks is the interaction of the faculty and students on research projects; from working with the region’s health care industry to mine data patterns to produce better health outcomes, to develop-ing new fuel cell technologies to replace batteries in military laptops. What we are doing in the classroom is just one small part of the way we are preparing students for the challenges of a truly global society. The College is finding new ways to partner with industry to provide solutions to real-world problems while giving our students hands-on, practical experience with some of the best en-gineering minds in the country. Four of our students and one faculty member recently worked with a Boston-area cardiologist to develop a heart monitor

Call or visit today.

(904) 620-1350www.unf.edu/ccec

ccec ad.indd 1 1/12/12 10:38 AM

The University of North Florida College of Computing, Engineering and Construction

The UNF connection:Research to

advance your industry

watch to alert emergency medical personnel when the wearer’s heart rate becomes erratic and in need of medical attention. Their efforts will change the way people with heart conditions live and thrive. We have ongoing research with local companies to solve specific technical problems in advanced manufacturing, controls and robotics; and our work in advanced fuel-cell technologies has attracted almost $9 million in federal support. Our researchers are not only preparing the next generation of professionals to live and work in Jacksonville, they are researching and developing the next generation of technologies that will help keep Jacksonville globally competitive.

One of the newest initiatives within the College is the establishment of a Small Business Innovative Research (SBIR) Center, to help local small business develop research proposals on new technologies and submit them to the Federal government for funding. Our initial project with a local, family owned business produced a $150,000 grant proposal to develop a new, patented technology that could significantly grow the company and lead to increased employment. We are working to pair other small companies with researchers in the college and, if appropriate, throughout the University, to submit additional proposals and provide the needed research infrastructure and support that are essential for a growing, competitive manufacturing sector.

The College is poised for greater excellence. The Dean’s Office, the faculty and the staff of the College — and our community — are here to help your com-pany and our students succeed on the path to excellence and success.

Come join us, and together we can build a better tomorrow for you, our city, state, nation and the world.

No one like you.No place like this.

The economic leadership of the United States that emerged in the 20th Century was built on a foundation of discovery and innovation driven by well-funded scientific research. Although the U.S. is still leading the world in science and research investment, there are clear indicators that other countries are suc-cessfully emulating the American model. If companies are to stay competitive in these difficult economic times, staying at the cutting edge of technological advances, from robotics and controls to new “green” processes and materi-als, is an essential part of day-to-day operations. The College of Computing, Engineering and Construction at the University of North Florida stands ready to partner with local industries to solve critical technical research issues, help develop new processes and apply the most recent scientific, engineering and computing advances.

As economic realities have forced more and more companies to abandon in-house research facilities, the importance of partnering with local research institutions to leverage limited dollars for research has grown exponentially. The result has been beneficial both for American industry and the economy. In the bioscience industry alone, the Association of University Technology Managers (AUTM), an association that represents managers of academic intel-lectual property, reports that approximately 76 percent of U.S. companies have licensed technologies from universities which grew out of research. Even in the worst economic times since the Great Depression, the partnership between universities and companies supported economic growth. In 2009, 596 startup companies formed from university research — 81 percent in the home state of the university.

UNF has developed a strong reputation of preparing our students to make sig-nificant contributions to their chosen professions, the northeast Florida region and beyond. One of the College’s hallmarks is the interaction of the faculty and students on research projects; from working with the region’s health care industry to mine data patterns to produce better health outcomes, to develop-ing new fuel cell technologies to replace batteries in military laptops. What we are doing in the classroom is just one small part of the way we are preparing students for the challenges of a truly global society. The College is finding new ways to partner with industry to provide solutions to real-world problems while giving our students hands-on, practical experience with some of the best en-gineering minds in the country. Four of our students and one faculty member recently worked with a Boston-area cardiologist to develop a heart monitor

Call or visit today.

(904) 620-1350www.unf.edu/ccec

ccec ad.indd 1 1/12/12 10:38 AM


Prior to the recession that began in

2008, Florida’s economy relied

heavily on three main sectors:

tourism, agriculture and development,

the industry that constructs residential

and commercial buildings.

But when construction came to an

almost standstill and families took fewer

vacations because they had less dispos-

able income, the Sunshine State ended

up with a sharp drop in tax revenues and

one of the highest unemployment rates

on record. Looking back, and having

seen the economy slowly improve, mem-

bers of the manufacturing and economic

development community say they never

want Florida to be caught in such an

unpleasant position again.

The First Coast Manufacturers Asso-

ciation is not only pushing to get manu-

facturing a starring role in the state’s

economy, it is working to get Florida-

manufactured goods spread all across

the globe. Former FCMA president Lad

Daniels is one of many experts who be-

lieve the future of Florida manufacturing

lies in the realm of international trade.

When more Florida-made goods are

exported overseas, the state’s economy

will become more diverse and more

stable. More stability in an economy will

create an environment that is equipped

to withstand any future economic down-

turn. At present, manufacturing accounts

for five-percent of the Florida economy

or State Domestic Product.

“If we are going to be successful in

trading, we have to have a balance in

trade,” Daniels said, “which means we’re

going to have to make things. Now, more

International Trade is the Future of Florida Manufacturing

Lad Daniels, Past President of FCMA


than any time in the history of our state,

there are tremendous opportunities for

Florida-based manufacturers to sell their

goods overseas on the export markets.”

The numbers prove Daniels’ point.

Although the U.S. leads the world in the

number of goods manufactured yearly,

95-percent of the world’s consumers live

outside of the U.S., which if capitalized

on properly, could only create new op-

portunities for Florida manufacturers.

New opportunities equates to new sales

and new sales means new jobs and an

increase in corporate profits.

And there are multiple studies to back

up claims of how international trade

can enhance the growth of Florida’s

manufacturing sector. The Boston-based

Boston Consulting Group, a manage-

ment consulting company with 70 offices

worldwide, says U.S. manufacturing is

going to realize a renaissance in the next

10 years.

“The U.S. manufacturing sector remains

robust. Output is almost two and a half

times its 1972 level in constant dollars,

even though employment has dropped

by 33-percent. Despite the recent wave

of outsourcing to China, the value of

U.S. manufacturing output increased by

one-third, to $1.65 trillion, from 1997

to 2008—before the onset of the reces-

sion—thanks to the strongest productivity

growth in the industrial world,” states the

white paper titled “Made in America

Again: Why Manufacturing Will Return to

the U.S.”

International Trade is the Future

Florida Manufacturing Facts

Manufacturers in Florida account for 5 percent of the total output in the state, employing 4.3 percent of theworkforce. Total output from manufacturing rose throughout the past decade before decreasing somewhatdue to the recession (see figure); it was $26.8 billion in 2009. In addition, manufacturing compensation is nearly55 percent higher than other nonfarm employers in the state.

Manufacturing Output and Exports

Florida Total Manufacturing Output $36.5($billions, 2009)

Manufacturing’s Share of Total Gross State Product 5.0%(2009)

Manufacturing Establishments in Florida 12,862(2009)

Manufacturing’s Share of Florida’s Exports 85%(2010)

Total Employment Related to Manufactured Exports 144,900(2008)

Employment and Compensation

Manufacturing Employment 306,800(2010)

Manufacturing Employment (% of Overall Nonfarm) 4.3%(2010)

Average Annual Compensation in Manufacturing $62,859(2009)

Average Annual Compensation in Nonfarm Sectors $40,594(2009)

Manufacturing Pay Premium (as a % of Nonfarm) $22,265(2009) (54.8 %)

Source: U.S. Bureau of Economic Analysis Sources: U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics

Florida Manufacturing Output(Billions of Dollars, from 1997-2009)

Source: U.S. Bureau of Economic Analysis

Top 10 Florida Manufacturing Sectors(in Millions of Dollars, in 2009)

Source: U.S. Bureau of Economic Analysis

nam.org/statedata • [email protected]

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Rep. Lake Ray echoes the findings of

the white paper. Ray, who is also the

newly-appointed president of the FCMA,

says U.S. manufacturers have to seize

on a tremendous opportunity as more

and more U.S. companies find it cost-

prohibitive to manufacture their products

overseas.

“By and large, manufacturing pro-

cesses are less labor-intensive now than

they have ever been in history,” Ray said.

“I read one analysis that concluded if you

look at the differences in labor costs in

China and here in the U.S., then if you

take the cost of their currency value and

the productivity and the quality of work

we have here in the U.S., the differences

are marginal.”

The Boston Consulting Group found

many U.S. manufacturers are bringing

jobs back to the U.S. from China. For ex-

ample, Manatee County, Florida-based

Sleek Audio recently moved production

of its high-end headphones from a

Chinese facility back to its plant along

Florida’s alluring Gulf Coast. In Colum-

bus, Ga., NCR moved production of its

ATMs to its Georgia plant, a move that

will create 870 jobs by 2014.

So what has to happen next for Florida

manufacturers to capture export mar-

kets? What needs to be done to prevent

Florida manufacturers from outsourcing

manufacturing jobs overseas?

For the past year, Florida Gov. Rick

Scott has made international trade a top

priority by working in concert with of-

ficials from Enterprise Florida. Together,

Scott and economic development of-

ficials from Enterprise Florida traveled

to Canada, Brazil, Israel and Panama

to generate trade opportunities with

Florida. Enterprise Florida officials are

working harder than ever to identify inter-

national trade opportunities for Florida

companies.

“Enterprise Florida and our team

understands the importance of manu-

facturing and its link to international

trade,” said Gray Swoope Jr., president

and chief executive officer of Enterprise

Florida. “In 2010-2011, our export

development programs have resulted in

$563 million in export sales by Florida

companies.”

Florida manufacturers can take part

in international trade shows where En-

terprise Florida has researched there is

a fit for the company’s products abroad.

Enterprise Florida officials then serve as

the intermediary or link to establishing

trade routes and the transfer of goods

from Florida to the world. Swoope says

Enterprise Florida and Gov. Scott are on

the right path.

“The governor is tackling unnecessary

business regulations, making it easier

to obtain permits and simply making

it easier to do business in Florida,”

Swoope said. “Gov. Scott wants to fully

eliminate the corporate income tax in

the state and as we move forward, the

State of Florida and our team is very


3.0 Trade and Logistics in Florida Florida Trade Flows Today

Domestic and international trade flows in Florida are large and growing. They support a sizable share of the state’s economy and create significant transportation impacts. Domestic and international trade flows to, from, and within Florida are estimated at about 623 million tons in 2009, or about 33 tons per resident.14

Trucking is the dominant form of goods movement, accounting for more than 73 percent of all tonnage; most freight trips use a truck at some point in their journey (Figure 3.2). Water accounts for about 15 percent of all freight flows, followed by rail at 12 percent. Air accounts for less than 1 percent by volume, but a significant share of high value goods. This distribution across modes reflects the diversity of Florida’s intermodal transportation system.

Of this total, more than one half (328 million tons) originated and terminated within the state of Florida; these are shipments of raw materials and intermediate goods, as well as shipments from distribution centers to retail stores. About one third of the total, or 188 million tons, are imports from other nations and states to businesses and consumers in Florida. The remaining 107 million tons are exports produced in

Florida and shipped to other states or nations (Figure 3.1).

• Trucking – Internal movements with both origin and destination in Florida

account for 65 percent of tonnage handled by trucks; 19 percent are inbound; and 16 percent are outbound. Outbound flows of aggregates and phosphates help balance total trucking tonnage; for containerized cargo, inbound trucking flows exceed outbound flows by a wide margin.

• Water– Inbound movements account for 62 percent of international water tonnage; 38 percent are outbound.15

• Rail – Internal movements account for 41 percent of rail tonnage; 44 percent are inbound; and 15 percent are outbound.

• Air – Inbound movements account for 70 percent of domestic air movements; 30 percent are outbound.16

Figure 3.1 Total Freight Flows to, from, and within Florida, 2009

Source: Florida Trade Flow database, prepared by Martin Associates

Inc. Includes both domestic and international shipments.

Figure 3.2 Total Freight Flows by Mode, 2009 (in millions of tons)

Source: Florida Trade Flow database, prepared by Martin Associates Inc.

Includes both domestic and international shipments.

11 11

3.0 Trade and Logistics in Florida Florida Trade Flows Today

Domestic and international trade flows in Florida are large and growing. They support a sizable share of the state’s economy and create significant transportation impacts. Domestic and international trade flows to, from, and within Florida are estimated at about 623 million tons in 2009, or about 33 tons per resident.14

Trucking is the dominant form of goods movement, accounting for more than 73 percent of all tonnage; most freight trips use a truck at some point in their journey (Figure 3.2). Water accounts for about 15 percent of all freight flows, followed by rail at 12 percent. Air accounts for less than 1 percent by volume, but a significant share of high value goods. This distribution across modes reflects the diversity of Florida’s intermodal transportation system.

Of this total, more than one half (328 million tons) originated and terminated within the state of Florida; these are shipments of raw materials and intermediate goods, as well as shipments from distribution centers to retail stores. About one third of the total, or 188 million tons, are imports from other nations and states to businesses and consumers in Florida. The remaining 107 million tons are exports produced in

Florida and shipped to other states or nations (Figure 3.1).

• Trucking – Internal movements with both origin and destination in Florida

account for 65 percent of tonnage handled by trucks; 19 percent are inbound; and 16 percent are outbound. Outbound flows of aggregates and phosphates help balance total trucking tonnage; for containerized cargo, inbound trucking flows exceed outbound flows by a wide margin.

• Water– Inbound movements account for 62 percent of international water tonnage; 38 percent are outbound.15

• Rail – Internal movements account for 41 percent of rail tonnage; 44 percent are inbound; and 15 percent are outbound.

• Air – Inbound movements account for 70 percent of domestic air movements; 30 percent are outbound.16

Figure 3.1 Total Freight Flows to, from, and within Florida, 2009

Source: Florida Trade Flow database, prepared by Martin Associates

Inc. Includes both domestic and international shipments.

Figure 3.2 Total Freight Flows by Mode, 2009 (in millions of tons)

Source: Florida Trade Flow database, prepared by Martin Associates Inc.

Includes both domestic and international shipments.

11 11

“Despite the recent wave of outsourcing to China, the

value of U.S. manufacturing output increased

by one-third, to $1.65 trillion…”

Rep. Lake Ray, President of FCMA

Charts Courtesy Florida Chamber Foundation


focused on how we can grow manufac-

turing in Florida.”

But even before the Panama Canal’s

new widened lanes open up in two

years, Florida manufacturers have op-

portunities they can cash in on now.

Mark Vitner, an economist for Wells

Fargo who studies international trade,

says Brazil and other Latin American

countries present the largest opportu-

nity right now for Florida businesses to

enter the export markets.

“It’s a great opportunity for Florida be-

cause Latin America is growing rapidly,”

Vitner said. “The region is seeing a lot of

growth particularly in capital goods and

machinery.”

Even before The Great Recession,

international trade played a key role in

Florida’s economy or SDP. According to

the National Association of Manufactur-

ers, 100-percent of Florida’s manufac-

turing growth since 2000 has come from

the export markets. And one-seventh

of Florida’s economy, the equivalent of

one out of every 6.5 jobs, is tied to in-

ternational business. Overall, 1.2 million


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Billions of Dollars

0

10

20

30

40

50

2003

2010

Exporting Is Critical to Florida’s Small Businesses • Small businesses comprise 96 percent of Florida’s 38,210 exporters (2009).

• Small businesses average $792,000 in exports per firm.

• Small businesses account for 62 percent of total state exports.

Additional Trade Facts

• Over the past three years, manufacturers in the U.S. sold $70 billion more in manufactured goods to our free trade agreement (FTA) partners than we boughtfrom them. The United States had a manufacturing trade deficit of $1.3 trillion incountries where no FTAs existed (see chart 2).

• FTA countries: Australia, Bahrain, Canada, Chile, Costa Rica, Dominican Republic,El Salvador, Guatemala, Honduras, Israel, Jordan, Mexico, Morocco, Nicaragua,Oman, Peru, Singapore.

• Visit www.nam.org/statedata or www.nam.org/trade. E-mail us at [email protected].

Source: U.S. Department of Commerce. Unless otherwise noted, data reflects 2008

Florida Benefits from Exports!

Chart 1. Florida’s Manufactured Goods Exports

-1500

-1200

-900

-600

-300

0

300

FTA Countries

$70 Billion

Non-FTA Countries

-$1.3 Trillion

Chart 2. U.S. Manufacturing Trade Balance (2008-2010)FTA Countries Versus Non-FTA Countries

Manufactured goods exports are the strongest part of Florida’s economy even though Florida and otherstates export only half as much of their production as the world average. America’s exports and the related jobscould double if Congress passes strong pro-export legislation.

• Manufactured exports support 13 percent of Florida’s manufacturing jobs.

• Since 2003, Florida manufacturing exports rosenearly three and a half times faster than the state’soverall economy.

• 96 percent of Florida exporters are small businesses (2009).

• Florida exported $14 billion of manufactured goodsto Free Trade Agreement (FTA) partner countriesin 2010—30 percent of Florida's total.

Manufactured Exports Drive Florida’s Economy

• Manufacturing accounts for 85 percent of Florida’s exports (2010).

• Since 2003, Florida manufacturing exports grew 102 percent while the national average was a 70 percent increase.

• Manufactured exports support 13 percent of Florida’s manufacturing jobs (U.S. average is 22 percent).

Florida Manufacturers Are Engaged in Exporting around the World

• Top five U.S. export markets: 33 percent of Florida exports (2010).

• Brazil (10%), Venezuela (7%), Canada (7%), Colombia (5%) and Mexico (4%).

Florida Trade Statistics

Manufactured Goods Exports, 2010 (billions) $46.9

Total Jobs in all Sectors Supportedby Manufactured Goods Exports 144,900

Export Share of Manufacturing Jobs 13%

2003-2010 Growth of Manufactured Goods Exports 102%

Source: National Association of Manufacturers


Florida jobs are connected to interna-

tional trade.

“I personally believe that the future of

manufacturing in Florida lies in the ex-

port markets abroad,” said Manny Men-

cia, senior vice president of international

development for Enterprise Florida. “This

recession and the continued slow growth

of the economy is increasing the impor-


Billions of Dollars

0

10

20

30

40

50

2003

2010

Exporting Is Critical to Florida’s Small Businesses • Small businesses comprise 96 percent of Florida’s 38,210 exporters (2009).

• Small businesses average $792,000 in exports per firm.

• Small businesses account for 62 percent of total state exports.

Additional Trade Facts

• Over the past three years, manufacturers in the U.S. sold $70 billion more in manufactured goods to our free trade agreement (FTA) partners than we boughtfrom them. The United States had a manufacturing trade deficit of $1.3 trillion incountries where no FTAs existed (see chart 2).

• FTA countries: Australia, Bahrain, Canada, Chile, Costa Rica, Dominican Republic,El Salvador, Guatemala, Honduras, Israel, Jordan, Mexico, Morocco, Nicaragua,Oman, Peru, Singapore.

• Visit www.nam.org/statedata or www.nam.org/trade. E-mail us at [email protected].

Source: U.S. Department of Commerce. Unless otherwise noted, data reflects 2008

Florida Benefits from Exports!

Chart 1. Florida’s Manufactured Goods Exports

-1500

-1200

-900

-600

-300

0

300

FTA Countries

$70 Billion

Non-FTA Countries

-$1.3 Trillion

Chart 2. U.S. Manufacturing Trade Balance (2008-2010)FTA Countries Versus Non-FTA Countries

Manufactured goods exports are the strongest part of Florida’s economy even though Florida and otherstates export only half as much of their production as the world average. America’s exports and the related jobscould double if Congress passes strong pro-export legislation.

• Manufactured exports support 13 percent of Florida’s manufacturing jobs.

• Since 2003, Florida manufacturing exports rosenearly three and a half times faster than the state’soverall economy.

• 96 percent of Florida exporters are small businesses (2009).

• Florida exported $14 billion of manufactured goodsto Free Trade Agreement (FTA) partner countriesin 2010—30 percent of Florida's total.

Manufactured Exports Drive Florida’s Economy

• Manufacturing accounts for 85 percent of Florida’s exports (2010).

• Since 2003, Florida manufacturing exports grew 102 percent while the national average was a 70 percent increase.

• Manufactured exports support 13 percent of Florida’s manufacturing jobs (U.S. average is 22 percent).

Florida Manufacturers Are Engaged in Exporting around the World

• Top five U.S. export markets: 33 percent of Florida exports (2010).

• Brazil (10%), Venezuela (7%), Canada (7%), Colombia (5%) and Mexico (4%).

Florida Trade Statistics

Manufactured Goods Exports, 2010 (billions) $46.9

Total Jobs in all Sectors Supportedby Manufactured Goods Exports 144,900

Export Share of Manufacturing Jobs 13%

2003-2010 Growth of Manufactured Goods Exports 102%


tance of engaging in business interna-

tionally. I think that Florida companies

that don’t engage in international busi-

ness do themselves a great disservice.”

Companies that take part in interna-

tional trade on the export markets grow

an average of 15-percent faster than

their competition, pay higher wages and

are more likely to remain stable during

an economic downturn, Mencia said.

Like pieces of a puzzle, Enterprise

Florida’s role in increasing international

trade for Florida will tie in heavily with

the completion of the 2014 Panama

Canal widening project. Mencia refers

to the wider canal as “a game changer

for Florida.”

“When the Panama Canal is com-

pleted, it will increase the importance of

the Asian markets to Florida,” said Men-

cia, who is based in Miami. “The wider

canal will open the doors for many trade

and investment opportunities for Asian

companies that traditionally enter the

U.S. through the West Coast. Now, they

can come to the U.S. through the eastern

seaboard, which will create opportunities

for Florida’s manufacturers due to the

location.”

Through its seven Florida field offices,

Enterprise Florida offers counseling and

research services to Florida compa-

nies seeking ways to link up with the

international markets. The economic

development agency also has numerous

offices around the world where its staff

sells businesses abroad on the benefits of

doing business in Florida.

“The state needs to continue to do

what it has to do to generate opportuni-

ties by both investing in our infrastructure,

airports, seaports, roads, maybe even

logistics centers, and continue to invest in

small medium-sized enterprises in market

entry and market diversification,” Mencia

said. “Manufacturers are typically small

companies and smaller companies need

more support to keep growing exports

and diversifying.”

Part of the challenge, Mencia said,

is also educating manufacturers on the

benefits of doing business abroad. If the

state continues improving the regula-

tory policy climate for doing business

in Florida and keeps up international

economic development while ensuring

Florida captures its share from the wider

Panama Canal, international trade could

account for 20-percent of Florida’s SDP

“in the next decade.”


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Manny Mencia, Sr. Vice President of International Development for Enterprise Florida

Gray Swoope Jr., President and Chief Executive Officer of Enterprise Florida.


What’s Made Here?The manufacturing sector of

Northeast Florida is as varied

and diversified as the colorful

squares on a patchwork quilt.

And it’s this diversity that helps pro-

vide balance and stability to the region

through both abundant and challenging

economic times. The list of products

coming from the region’s manufactur-

ers range from household brand name

consumer goods to high-tech medical

equipment to chemical fragrances that

go into thousands of other products

worldwide.

The regional economy has a healthy

mix of manufacturing, service indus-

try, tourism and healthcare jobs, as

well as public sector employment to

provide balance. If one sector in any

economy dominates over another, the

community becomes less attractive for

future economic

development.

JAXUSA Part-

nership For Re-

gional Economic

D e v e l o p m e n t ,

formerly known as

the Cornerstone

Regional Develop-

ment Partnership,

which serves as

a unified effort to

bring industry to

Baker, Clay, Duval,

Flagler, Nassau,

Putnam and St. Johns counties, recently

helped lure a new manufacturer to Jack-

sonville’s Cecil Commerce Center.

In September 2011,

Saft America moved into

its new 235,000-square-

foot facility that will also

serve as the French

company’s American

headquarters. When it

reaches full production,

the manufacturer of

lithium ion batteries for

the consumer and mili-

tary electric and hybrid

vehicle markets expects

to employ 280 workers.

The annual average


salary of Jacksonville’s Saft employees

should be $40,000.

According to Florida TaxWatch, Saft

is a shining example of how a commu-

nity’s quality of life is positively impacted

by the manufacturing sector.

“When a new manufacturer moves

into a community, not only does it cre-

ate immediate jobs, the manufacturer

diversifies the local and state economy,”

said Jerry Parrish, Ph. D. who studied

the Florida manufacturing economy’s

impact for six months in 2011. “Manu-

facturing provides high-wage, high-skill

jobs and creates more indirect jobs in

the economy than any other industry

sector.”

The Jacksonville Saft plant is the cul-

mination of local, state and federal gov-

ernment working together to provide an

incentive package for the manufacturer.

Saft received $96.5 million in funds

from the U.S. Department of Energy

while the City of Jacksonville provided

$20.8 million in grants, bonuses and

tax exemptions. The State of Florida

added another $14 million in incentives

to ensure the plant located in Jackson-

ville instead of other U.S. cities it was

considering.

What’s Made Here?

In 1987, Johnson & Johnson Vision Care, Inc. introduced the world’s first mass-marketed disposable soft contact

lens under the ACUVUE® brand name. Today, ACUVUE® is the world’s most widely prescribed lens, manufactured

by VISTAKON®, a division of Johnson & Johnson Vision Care, Inc. Vision Care’s global headquarters, research and

development facility, and one of its two state-of-the-art manufacturing plants is located in Jacksonville, the other plant is

located in Limerick, Ireland.

In September 2011, Saft America moved into its new 235,000-square-foot facility


A 2009 study by the U.S. Bureau of

Economic Analysis supports data from

the Florida TaxWatch study. The federal

study shows the Saft plant will create

688 indirect jobs locally. Indirect jobs

are ancillary jobs that involve every-

thing ranging from the purchase of raw

materials to the logistics company Saft

chooses to ship its products to other

What’s Made Here?

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states and overseas.

At full production, Saft expects to

produce 370 megawatt hours of battery

power a year, the equivalent of run-

ning more than 37,000 electric-drive

vehicles.

Green Cove Springs is now home to

one of America’s oldest, most stable

manufacturers of passive solar panel

systems for the residential and com-

mercial markets. In December 2011,

Alternative Energy Technologies opened

a 66,000-square-foot facility on an

18-acre site off U.S. Highway 17. AET

had been located in a leased facility on

Jacksonville’s Westside where it began

in 1987 with 18,000-square-feet of

space.

AET makes solar panels that capture

and store heat from the sun. The water

then circulates through tubes, which

heats the water in homes. All of AET’s

raw materials are American made while

75-percent of its customers are in the

U.S. Twenty-five-percent of AET’s cus-

tomers are international.

An economist who studies Florida’s

manufacturing sector says the future of

manufacturing on the First Coast could

be filled with more “green jobs” such as

the likes of Saft and AET.

“Historically, Florida has produced

durable goods,” said Mark Vitner, an

economist for Wells Fargo. “The region

is probably well-positioned to have

growth in the alternative energy sector.

Jacksonville’s manufacturing sector is

more diverse than people realize.”

Despite the post-recession economy

remaining slow in some sectors, manu-

facturing appears to be on the upswing.

“I think it’s starting to improve be-

cause I see more manufacturers getting

involved again in association activities,

which generally means they are more

What’s Made Here?

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optimistic about

their revenues,” said

Nancy Stephens, ex-

ecutive director of the

Manufacturers Asso-

ciation of Florida. “I

am hearing positive

things from all of

them.”

Rolls and packs of

Brawny and Sparkle

paper towels and

Quilted Northern and

Angel Soft bathroom

tissue continue to fly

off the production

lines at Palatka’s

G e o r g i a - Pa c i f i c

Corp. plant, which

has 1,050 full-time

employees.

Since it shipped its

first beers in 1969,

Jacksonville’s Anheuser-Busch brewery

has been a stalwart providing economic

diversity to the First Coast region. One

of 12 U.S. breweries in the AB family,

the local plant has more than 600 em-

ployees and an average annual payroll

of $38 million. The plant produces an

average of 13 million cans and bottles

of Budweiser, Bud Light and Michelob

Ultra daily.

Not far from the brewery is another

maker of fine spirits, Bacardi Bottling

Corp., which has just over 300 workers

at its facility that produces and bottles

rum. The plant produces 45,000 cases

of rum per day that ship all over the U.S.

North of Jacksonville’s Downtown, in

the historic Springfield community, more

than 1,400 employees from Swisher

International crank out 13 million cigars

and various types of tobacco products

daily that ship worldwide. The plant,

often described as the largest humidor

in the state, has been in Jacksonville for

100 years.

In the city’s Southside, Vistakon’s

Johnson and Johnson Vision Care Inc.

makes world-class medical products,

such as ACUVUE contact lenses. John-

son and Johnson has around 2,000

employees in the city.

And Medtronic’s Jacksonville facility

produces a full line of life-enhancing

products for the ear, nose and throat

medical specialty field. The company

employs more than 600 workers in this

high-skill, high-wage sector.

Pilot Pen Corp.’s Jacksonville facil-

ity manufactures and distributes pens

worldwide from this Southside manu-

facturer. The plant has just under 200

workers.

What’s Made Here?

Medtronic’s Jacksonville facility manufactures more than 2,500 different medical devices used in the treatment of ear, nose and throat diseases.


Helicopter manufacturer Kaman

Aerospace Corp. has 450 employees at

its Northside facility.

From its Northside facilty, Renessenz

uses pine tree and citrus essences to

make flavor and fragrance ingredients

that go into personal and household

goods such as soaps, detergents, sham-

poos and chewing gums.

And no story about Jacksonville

manufacturing is complete without

mentioning one of the cornerstone

manufacturing plants that towers along

the city skyline. Maxwell House’s 280

workers roast one million pounds of

coffee a day giving the city a toasty fresh

aroma that drifts for miles.

And what will Jacksonville make in the

future? At least one answer is beer. In

the past three years, four microbrewery

operations have opened in the area.

Bold City Brewery recently celebrated

its third year brewing craft beers. Its

products are distributed to more than

300 venues in Northeast and Central

Florida. The brewery also bottles its own

products on site at its Rosselle Street

location in Jacksonville.

Each local microbrewery has tapped

into an amazingly fast-growing mar-

ket. The craft beer industry brought

in an estimated $8 billion nationwide

in 2010 in the middle of the worst

recession on record since The Great

Depression.

What’s Made Here?

Kaman Aerostructures is one of North America’s leading aerospace subcontractors.

Located in Jacksonville, Florida, Kaman Aerostructures uniquely brings major structural

assemblies, sheet metal parts and machining capabilities to the world’s aircraft OEMs.

www.kaman-aerostructures.com

Aerostructures SolutionsWe are Kaman.

Often called “Florida’s largest humidor,” Swisher’s 1,400 employees produce 13 million cigars a day.

Gary Frost had worked in man-

ufacturing for years in Maine

and Wisconsin, but never

had access to an organization like the

First Coast Manufacturers Association.

One of the aspects that impressed

Frost and led him to become active in

FCMA is the fact that the organization

goes to great lengths to make sure its

members are responsible manufactur-

ers when it comes to environmental

regulations.

“As an individual company, there are

no two aspects of doing business that

are more important than employee

safety and environmental performance,”

said Frost who serves as vice president

and plant manager of Georgia-Pacific’s

Palatka, Fla. facility. “Realistically, we

don’t have the right to do business un-

less we get it right when it comes to our

environmental performance. One of

the things we concentrate heavily on is

doing what is right, not doing what is

Manufacturers Contribute To Environmental Conservation


Phot

o C

ourte

sy o

f Alle

n Fo

rrest

Georgia-Pacific’s Palatka mill produces such household brands as Brawny and Sparkle paper towels, as well as Quilted Northern tissue.


necessarily only what is required.”

Frost, who also serves as one of

FCMA’s 2012 Tri-Chairmen, exemplifies

the care and concern FCMA members

have for the environment. Each member

knows it must function in harmony with

the environment and that means being a

good steward of our natural resources.

“Since 2000, we’ve spent approxi-

mately $280 million on environmental

improvements, of that $80 million we

would have needed to do ourselves

in order to meet requirements,” Frost

said. “The other $200 million was re-

ally voluntary investments we did that

upgraded our bleach plant, our pulp

mill, as well as made some changes in

our effluent treatment, all centered, on

primarily improving our water effluent.”

Included in this massive $280 million

investment is new equip-

ment that simultaneously

enhances air and water

quality in and around the

Palatka plant. New equip-

ment that filters the brown

stock, pulp or stock used

in the paper-making pro-

cess, reduces both odor-

ous discharges and allows

Georgia-Pacific to use less

water in each process.

“We installed new brown

stock washers that also

included a gas collection

system that allows us to collect odorous

gases that are incinerated in a boiler,

which destroys any of the odorous

components,” Frost said. “At the same

time, those same washers allow us to

do a much better job so the effluent

will be lower in conductivity, have lower

amounts of salt in our effluent.”

The brown stock washers have al-

lowed Georgia-Pacific to cut its water

use in more than half. And plant re-

searchers are looking at ways to make

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FCMA members understand the importance of water conservation and the overall role it plays in environmental care.


even further reductions.

“We used to use 40 million gallons of

processed water a day and now we’re

down to about 18 million gallons and

we’re continually working it down,” Frost

said. “We have a couple of projects in

the works that would allow us to reduce

our water use even further than that.”

The brown stock washers also lower

the amounts of chlorine compounds

Georgia-Pacific uses in the pulp bleach-

ing process, the process used to make

white paper products. Frost says the new

equipment reduces the potential for any

bad elements to be in its effluent, the

amount of treated water it is permitted

to discharge into nearby waterways.

Georgia-Pacific is also in the permit-

ting process to build a pipeline that will

vastly improve the ecosystems around

the plant. The pipeline will allow the

plant to discharge its treated effluent

into the center of the St. Johns River

channel rather than into Rice Creek

where the plant has discharged effluent

since it was built in the late 1940s.

“One of the direct impacts is that the

pipeline will improve the potential for

submerged vegetation along the banks

of the river to come back and flourish,”

Frost said.

Water is one of the primary natural

resources used in many manufactur-

ing processes. Georgia-Pacific is only

one example of how FCMA members

are continually striving to manage this

precious resource and care for our en-

vironment. Renessenz, a manufacturer

of flavorings, is another example of how

FCMA members are involved in envi-

ronmental conservation.

During the past 20 years, this north-

side Jacksonville plant has reduced the

amount of water it draws from the local

aquifer by 70 percent. And it’s realized

this amazing feat in a manner similar

to Georgia-Pacific, by installing newer,

more efficient equipment.

“We’ve done that thru a combo of

equipment upgrades, consolidation of

water using equipment, such as cooling

towers, water management programs,

process improvements, and engag-

ing our employees to be more water

conscious,” said Mike Templeton, vice

president of operations at Renessenz

and a 2011 FCMA Tri-Chairman.

“Those things have rewarded us with a

tremendous reduction of the amount of

water we have to pull out of the aquifer.”

Renessenz makes flavor and fragrance

ingredients that go into personal and

household goods, such as soaps, deter-

gents, shampoos, toothpaste, chewing

gums, and all of its products come from

a renewable raw material source, which

is primarily the pine tree or the citrus

plants, primarily orange.

“In the process of making those flavor

and fragrance ingredients, we will use

water in order to make steam that drives

all of our processes and water for cool-

ing and temperature control on our pro-

cesses,” Templeton said. “The water that

is not in contact with any of our process

chemicals, that water will be collected.”

In the days when Renessenz used

higher volumes of water, the manufac-

turer would donate its water discharges

to nonprofit The First Tee, which used

the water to irrigate its golf course on

Brentwood Avenue. However, as Renes-

senz lowered its water use, The First Tee

saw less donated water flowing its way.

“We have continued reducing our wa-

ter usage that we have actually lowered

the amount of water that we supply to

the golf course, so it’s sort of a good-


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news bad-news situation,” Templeton

said.

As Renessenz continues lowering its

water usage, it also means it is reducing

the amount of water it discharges into

nearby waterways. And like Georgia-

Pacific, the environment wins again.

“We have a permit to discharge

treated water into Moncrief Creek, but

we no longer utilize that permit, we

use it internally,” Templeton said. “We

maintain the permit and don’t have to

use it.”

In the past year, Renessenz installed

a new $4 million boiler system that is

reducing the amount of nitrogen oxide

the company emits into the atmosphere,

another example of how FCMA mem-

bers are good environmental stewards.

“The new boiler was not a mandate;

we had an opportunity to take two boil-

ers out of service and replace them with

a new modern boiler and this was the

result,” Templeton said. “It was a really

a multi-goal project. We knew going in

that we would be reducing the nitrogen

oxide; it was an efficiency project. It will

lower our costs and require less fuel

to produce the same amount of steam

because it is a more efficient.”

Like many manufacturers, Renes-

senz’s manufacturing processes create

by-products. Templeton has found a

way to put the company’s leftovers to

work in other markets around the world.

“We make a biofuel that allows us

to reduce our dependency on natural

gas,” Templeton said. “This has a posi-

tive impact in lowering greenhouse gas

emissions.”

The biofuel byproduct, dubbed Glid-

Fuel, is shipped to various customers in

Europe.

“We’ve been doing this for years,”

Templeton said. “It’s only recently that

the opportunity arose to sell it overseas

as awareness of the dangers of green-

house gas emissions has increased

globally.”

Recycling is another way manufactur-

ers minimize the impact they have on

the environment. Since shipping its first

package of Jacksonville-made beer in

1969, Anheuser-Busch has been con-

stantly reviewing ways it can enhance its

environmental performance.

“We recycle 99.6 percent of the by-

products from brewing and packaging

our beers,” said Ken Wilkey, resident

environmental health safety manager

at Jacksonville’s Northside Anheuser-

Busch plant. “It takes all of our employ-

ees here to pull that off and we have a

lot of awareness among our employees

to make it happen.”

While numbers were not available at

press time for all of 2011, Wilkey said,

the brewer “we’re right at 91,160 tons

of by-products that we have recycled.”

Products that get a new life or re-pur-

posed run the gamut from plastics and

glass to scrap metals, pallets and wood,

as well as the beechwood that is used

to age some of Anhesuer-Busch’s sig-

nature products. The brewer also takes

the spent grains from which the beer is

brewed and sells it to dairy farms within

a 200-mile radius of the plant.

Anheuser-Busch is also constantly

exploring ways in which the Jacksonville

plant can lower it use of water, as well as

the amount of water it discharges after

treatment at its on-site wastewater treat-

ment plant. Its innovative Bio-Energy

Recovery System or BERS, which was

built in 1991, converts wastewater into

methane, a renewable fuel.

“We have achieved a 30 percent

reduction in water use since 2008,”

Wilkey said. “The bacterium in the


Employees at Jacksonville’s Anheuser-Busch plant recycle 99.6 percent of the by-products involved in the brewing and packaging of its world-class beer.


wastewater actually converts the waste

to methane gas. That way, we don’t

have to purchase natural gas to make

steam. BERS really fits in with the other

leg of our conservation plan and re-

duces the amount of energy we have to

purchase.”

Anheuser-Busch owns 1,800 acres of

land in Northeast Florida that the plant

uses to discharge its treated wastewater,

which is rich in nitrogen and other nu-

trients. The lands are not only home to

grain crops, such as sorghum and turf

grass, but deer, wild hogs, and wood

storks call the land home. The beer gi-

ant harvests the turf grass and sells it to

contractors for use in highway construc-

tion, while the sorghum is sold to area

farmers for livestock feed.

Plant workers are currently testing a

waterless lubrication product on one of

the Anheuser-Busch production lines, a

move Wilkey hopes will reduce water

usage by another million gallons per

year at the facility.

“Depending on how the trial run goes,

we’ll share that information with another

food manufacturer within the FCMA,

where possible,” Wilkey said. “We have

a worldwide company goal of getting

down to 3.5 gallons of water per gal-

lon of product we produce by the end

of 2012. In Jacksonville, we are well on

the way to meeting that as we currently

stand at somewhere around 3.7 gallons

of water per gallon of beer produced.”

With all of the water conservation

measures adopted at the Jacksonville

brewing giant, the plant was able to

review its permit for the amount of well

water it draws annually from its onsite

wells. Wilkey said the St. Johns River

Water Management District gladly re-

worked its 20-year permit with lower

water usage amounts attached.

“That would not have been possible

without the efforts we had been under-

taking,” Wilkey said. “It’s a good envi-

ronmental thing for us to conserve water

but it also makes a lot of business sense

for us too.”

Wilkey said another aspect that is key

to driving home the message of environ-

mental awareness and conversation to

his employees is to make such aware-

ness part of the culture of the plant. His

employees take part in river cleanup

campaigns, Keep Jacksonville Beautiful

and other organizations.

“In the past 18 months, our employ-

ees have picked up 800 pounds of trash

while taking part in about five-to-six

events a year,” he said.


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The State of Florida is home to a

number of regressive tax policies

that, if kept in place, will only be

detrimental to the long-term sustain-

ability of the manufacturing sector in the

Sunshine State.

That’s the bottom line finding of a new

study conducted by Florida TaxWatch,

a nonprofit, non-partisan tax watchdog

group. The study, which was commis-

sioned by the First Coast Manufacturers

Association and the Manufacturers Asso-

ciation of Florida, makes a solid case for

tax reform pertaining to the manufactur-

ing sector.

The study recommends the elimination

of all taxes on manufacturing inputs,

eliminating sales taxes on purchases

of machinery

and equipment

and allowing

an accelerated

dep rec ia t i on

schedule on

valuations for

Tangible Per-

sonal Property Taxes.

“Lowering taxes on inputs and machin-

ery will encourage capital investment and

its positive effects on competitiveness for

Florida firms,” the study states. “Allow-

ing accelerated

depreciation on

existing equip-

ment will lower

the amount

of Tangible

Personal Prop-

erty Tax, there-

Florida TaxWatch Study Finds Manufacturing to be the Economic Driver of Florida’s Future


fore lowering the penalty for capital

accumulation.”

The study also found that two key

instruments that are currently used

by state and local officials to execute

economic development initiatives are

not well suited for manufacturing. In its

study, Florida TaxWatch recommends

that the state modify its Qualified Tax

Incentive program, or QTI, as well as its

Capital Investment Tax Credit program,

or CITC.

In its current structure, the QTI pro-

gram “favors less capital intensive

industries at the expense of Florida’s

manufacturing” sector, the study states.

“A business that uses the QTI program

must be either a new or expanding busi-

ness, and it must create a minimum of

10 jobs,” according to the study. “Given

that manufacturing is more capital in-

tensive than other industries, the capital

needed to go along with the production

of those 10 new jobs is significantly

higher than for the average business.

A manufacturer that wanted to bring

new capital to Florida and start a small

operation with fewer than 10 employ-

ees would not be able to use the QTI

program.”

For some larger corporations, that

have multiple manufacturing facilities

spread across numerous states, Flori-

da’s current tax policies provide a dis-

incentive for such corporations to ever

upgrade capital equipment at plants

they own in Florida.

“Our tax policies penalize capital

Florida Tax Watch Study

“Lowering taxes on inputs and machinery will encourage

capital investment and its positive effects on competitive-

ness for Florida firms,” the study states. “Allowing acceler-

ated depreciation on existing equipment will lower the

amount of Tangible Personal Property Tax, therefore lower-

ing the penalty for capital accumulation.”

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formation,” said Jerry Parrish, Ph. D.,

chief economist at the Tallahassee-

based Florida TaxWatch and author of

the study. “Capital expenditures lead to

capital formation. If you get taxed on

accumulating stuff, it’s likely that you

will do less. We tax formation by taxing

a more productive machine.”

In a similar vein, the CITC program

typically does not provide any incentives

for Florida manufacturers, Parrish said.

Companies cannot qualify for the CITC

unless they invest $25 million and cre-

ate at minimum 100 jobs. Meanwhile,

a majority of manufacturers in many

Florida communities employ fewer

numbers of employees, so manufactur-

ers end up falling through an incentive

crack.

Gary Frost, FCMA 2012 Tri-Chair-

man, said that Florida manufacturers

simply need a business climate that

will encourage and provide support for

expansion of the operations that have

been contributing to local economies in

Florida for decades.

“I think what we’re seeing in our

economy is that people were not invest-

ing, even just to sustain their businesses

and that’s not going to work long term,”

said Frost, who also serves as vice presi-

dent of Georgia-Pacific’s Palatka paper

mill. “We need to ensure that people

are investing in the current manufactur-

ing base so that the manufacturers we

currently have stay here.”

Frost said hopefully this study will

help everyone realize the opportunity

the state has to enact positive change

for manufacturers, change that will spur

new capital investment and, therefore,

add new jobs. In short, an infusion or


10

Durable Goods Manufacturing are shown in orange. To be clear, when totaled, the personal income from durable plus non-durable equals the Personal Income of the Manufacturing sector.

Figure 8

Source: Bureau of Economic Analysis Regional Data

It is clear from Figure 8 that personal income from manufacturing has a smaller coefficient of variation than any other Florida industry. The utilities industry is second, and is less variable than the durable goods portion of manufacturing. One interesting result shown on the chart is that personal income from Manufacturing is a more stable provider of personal income in Florida than sectors usually associated with stable employment and personal income such as Military, Federal Civilian, and other Government categories.

Figure 9 shows the distribution of Personal Income in Florida from the Durable and Non-durable manufacturing categories. Florida’s mix of manufactured goods averages approximately 70% durable goods with 30% being non-durable. Durable goods production and its related personal income is dependent upon demand, which is dependent upon the state of the economy. The most interesting result of Figure 9 is that even with the variability in Durable Goods Production,

17

Figure 14

Source: U.S. Census Annual Survey of Manufacturers

Section 2 Conclusion: Florida is missing an important capital investment opportunity in the high value-added manufacturing sector, which (as shown in Section 1) is a stable sector linked with high wages and high personal income. Florida is losing to our competitor states (other southern states) in capital investment in manufacturing. Enhancing Florida’s manufacturing sector could lead to capital formation and job creation in the Sunshine State. The next section will examine the possible causes of Florida’s lagging manufacturing-related capital investment.

Section 3: Why Florida Is Less Attractive to Manufacturing-Related Capital Expenditures and Investment. A new National Bureau of Economic Research (NBER) working paper4 shows evidence Florida’s “economic development by retail” is crowding out “economic development by manufacturing.” Researchers tested the theory that governments try to maximize local receipts, so those with local and county taxes prefer retail because retail generates more local sales tax revenue than does manufacturing (or anything else). After controlling for inflation, it is indicated that local sales tax revenue in Florida increased by 380 percent between 1992 and 2008 compared with an eight percent increase in property tax revenues.

4 Fiscal Zoning and Sales Taxes: Do Higher Sales Taxes Lead to More Retailing and Less Manufacturing? Burnes, D., Neumark, D., and White, M. National Bureau of Economic Research. Working Paper 16932. April, 2011.

Charts courtesy of Florida TaxWatch.

Coefficient of Variation in Florida Personal Income by Sector

Per Capita Capital Expenditures on Manufacturing Decrease from 2008 and 2009


uptick in capital investment among

Florida manufacturers will create a

more stable economic environment

and help the state weather any possible

future recession.

Positive change in Florida’s tax laws

will also result in a boost in manufactur-

ing research and development.

“Manufacturing is responsible for

about 70 percent of the research and

development money that is spent each

year,” Parrish said. “So there are a lot of

reasons to support manufacturing.”

The Florida TaxWatch study goes be-

yond simple recommendations designed

to enact tax relief for manufacturers.

Parrish employed the dynamic model

from Regional Economic Models Inc,

or REMI, to demonstrate how tax reform

would generate new Florida manufac-

turing jobs.

“The model

shows that if 1,000

m a n u f a c t u r i n g

jobs were created

in Miami-Dade

County annu-

ally from 2012

to 2021, an ad-

ditional cumula-

tive 24,213 jobs

would be added in

Florida by 2021,”

according to the

study. “In the

first year alone,

a total economic impact of $570 mil-

lion to Florida’s economy should be

realized through personal consumption

expenditures, gross private domestic

investment, change in private invento-

ries, exports and imports of goods and

services, and government consumption

and investment.”

FCMA encourages everyone reading

“Manufacturing on the First Coast” to

write or call his/her Florida legislator

to support passage of tax reform for

manufacturing.


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Since 1955


Since its inception, the First Coast

Manufacturers Association has

served as the voice of manufac-

turers in Northeast Florida.

FCMA is continually working on enact-

ing positive change in the areas of the

economy, education and the environ-

ment. Here is a look at few ways in which

the association tackles these key quality

of life issues.

FCMA recently teamed up with the

Manufacturers Association of Florida to

commission Florida TaxWatch to study

the manner in which the state’s tax struc-

ture impacts manufacturing. The study

found that manufacturing provides stable

high-tech, high-wage jobs that can typi-

cally withstand negative economic shifts.

FCMA members agree that such leader-

ship is key to furthering the manufactur-

ing sector.

“FCMA is successful in raising the

awareness of the value of manufacturing

to the state of Florida and a great exam-

ple of that is our funding of the TaxWatch

study, our awareness with the City Coun-

cil, our partnership with the MAF, and the

legislature,” said Mike Templeton, vice

president of operations at Renessenz LLC

and a 2011 FCMA Tri-Chairman. “Our

goal is to raise awareness and educate

everybody about how manufacturing is

the way to create sustainable jobs.”

The tax study is only one tool that

FCMA is using to provide education

about the importance of manufacturing.

FCMA is committed to developing edu-

cational opportunities for its members

with each other, as well as educational

programs designed for the public at

large.

“One of the things we have done is

How FCMA Leads in the Economy, Education and the Environment

Mike Templeton, Vice President of Operations at Renessenz and a 2011 FCMA Tri-Chairman.


to partner with the local universities,

Florida State College at Jacksonville

and the University of North Florida,”

Templeton said. “We have continued to

do fundraising to provide scholarships

for UNF students. We have hosted sev-

eral seminars to make companies aware

of the excellent skills training programs

that exist through FSCJ locally.”

Internally, members of FCMA get to

learn from each other every month as

members get opportunities to tour each

others’ facilities and share best practic-

es on various topics ranging from water

use to worker safety to energy conser-

vation and recycling. In 2011, FCMA

took to the airwaves to educate the pub-

lic about the employment opportunities

among First Coast area manufacturers

using television commercials.

“We want the public to know that we

are not polluters and that we have very

attractive jobs that can improve the econ-

omy and the TV commercials were just

one way we worked last year to achieve

that goal,” said Carlos Zaneolo, one of

FCMA’s 2012 Tri-Chairmen and vice

president of steel manufacturer Gerdau.

FCMA has instituted a multi-pronged

approach to educating the public about

manufacturing. The association has

hosted training sessions for high school

teachers so they can share the good

news about manufacturing careers with

their students.

“We’ve educated teachers about

different manufacturing processes and

how the sector impacts the environ-

ment,” Zaneolo said. “That way, they

become aware of manufacturing and

can help us to attract more and more

young people.”

And because they have realized the

value of sharing best practices and

resources, some FCMA members will

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Carlos Zaneolo, Vice President of Gerdau and one of FCMA’s 2012 Tri-Chairmen.


be teaming up in 2012 to develop cur-

ricula that can be shared with various

audiences.

“We’re working with a couple of

contacts we’ve made through FCMA to

start developing curriculum for courses

that could potentially be developed

and presented through either the high

school or through the local college,”

said Gary Frost, vice president and

manager of Georgia-Pacific Corpora-

tion’s Palatka operations and a 2012

FCMA Tri-Chairman. “What we want

to do, and its part of FCMA’s mission,

is to share with the public the power of

manufacturing and this is one way to

accomplish that goal.”

In terms of the economy, while the

TaxWatch study will play a key role in

enacting long-term economic ben-

efits to both the community and the

manufacturers, FCMA is involved in

other economic initiatives. One such

initiative is helping lower the bills of a

number of manufacturers that use a lot

of electricity.

“Several corporations have facilities

here and also have branches in other

states, where energy rates are lower,”

Zaneolo said. “In the last year, the Jack-

sonville City Council and the JEA worked

to convince JEA that our manufacturers

needed lower rates to allow these com-

panies to be more competitive so they

can create more jobs. FCMA worked

to reach a consensus with JEA and City

Council. We knew that if we got relief

for the manufacturers, we could boost

the economy in the region.”

The new billing model impacted 25

area manufacturers that buy their power

from JEA, which used its 2009 billing rates

as a starting point for the new structure.

“JEA would not lose any money, they

would just make a little less,” Zaneolo

said. “The end result is that manufac-

turers got to reduce their costs, which

made the business environment more

competitive, which allows manufactur-

ers to produce more goods. When we

produce more here, we need more

trucks, we need more rail, we need

more contractors, we need more raw

material, to ship our finished goods and

we end up creating more indirect jobs

and more wealth around us.”

FCMA also works to raise awareness

and advocate for its members regard-

ing the environment and environmental

issues. For example, FCMA has played

a key role in helping Georgia-Pacific’s

Palatka paper mill maneuver through

the stiff regulatory climate involving the

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construction of a treated water pipeline.

“One of the things that impressed me

the most about FCMA was the details they

look at whenever a manufacturer seeks to

join the organization,” Frost said. “They

go to great lengths to make sure they

have responsible manufacturers when it

comes to environmental regulations.”

The association advocates for permit-

ting that is sound and based on science

instead of emotion and misinforma-

tion. Achieving this goal means a lot of

outreach and advocacy work among

FCMA members.

“We are strong advocates of the envi-

ronment and we know that we must pro-

tect the environment and the way that

you do that is with applied science and

technology,” Templeton said. “We have

some of the best scientists in this area

from around the world and science is

really what needs to drive our decision-

making and our program.”

Frost said Georgia-Pacific values the

role of third-party intermediary that

FCMA is allowed to play on behalf of

its members. This aspect of membership

truly adds value for the each manufac-

turing member.

“We get tremendous support from

FCMA when we do have issues crop

up from time to time, support that we

wouldn’t necessarily know how to go get

otherwise,” Frost said. “For example,

the environmental issues we are cur-

rently having with the effluent discharge.

Without FCMA, we wouldn’t even know

who to be in contact with in Tallahassee

and Jacksonville to be able to provide

information to and to be able to under-

stand what people’s issues are.”

Another battle FCMA continues to

wage is with the Federal Environmental

Protection Agency regarding Numeric

Nutrient Criteria (NNC) which regulates

the TMDL (or Total Maximum Daily Load)

measurement of nitrogen and phospho-

rous discharges to bodies of water. Com-

panies with discharge permits are affected

by these strict regulations. The economic

impact on job creation, small business,

agriculture and municipalities (consumers

and localities) must be taken into consid-

eration when developing water quality

standards in concert with sound science.

“We believe we are the leaders in how

we continue to have an environmental

protection program that can continue

to support growth in jobs,” Templeton

said.

How FCMA Leads


It’s no secret that the economy is

global and like ripples of waves in

the St. Johns River, what happens in

one nation’s economy can send shocks

through other countries until we feel the

same economic turmoil that started half-

way around the world.

There is a push to bolster Florida

manufacturing companies taking part in

international trade, but what are some of

the other plans underway to make Florida

manufacturing more competitive with

other states in the Southeast? Florida cur-

rently ranks last among the 12 Southern

states stretching from Virginia to Texas

in the amount of money spent yearly on

capital expenditures in the manufacturing

sector.

Florida TaxWatch studied data collected

by the U.S. Census Bureau’s Annual Sur-

vey of Manufacturers to understand how

Florida’s manufacturing sector compares

to other Southern states. The numbers

show Florida’s per capita expenditure for

capital in manufacturing was $138.20.

The next lowest state was Georgia, which

spent $295.98 per capita. The median

value for this group is $691.49.

“As you see, Florida is not even in the

game,” said Lad Daniels, former presi-

dent of the FCMA. “We can’t continue

on this path if we are to be viable and

compete in the region much less in a

global economy.”

FCMA is working on changing how the

state government quantifies and rewards

success in manufacturing. At present,

state law incentivizes manufacturers on

the number of jobs they create, whereas,

Daniels says, the state should be reward-

ing manufacturers based on increases in

productivity.

How to Make Florida More Competitive for Manufacturing

Lad Daniels, Past President of FCMA


How do manufacturers increase pro-

ductivity? They do so with capital expen-

ditures in the form of newer, high-tech

equipment. Yet, many manufacturers

are reluctant to invest in newer, more

efficient equipment due to the state’s

regressive tax policies.

“Capital expenditures lead to capital

formation,” said Jerry Parrish, Ph. D.,

chief economist at Florida TaxWatch,

an independent, non-partisan watchdog

and research group based in Tallahas-

see. “If a manufacturer is taxed for the

equipment it accumulates, it’s likely

they will buy less equipment. The state

taxes capital formation by taxing the

new, more productive machine that the

manufacturer just purchased.”

And then, in walks the tax collector

to enforce the state’s Tangible Personal

Property Tax, which in effect, places

further restraint on the accumulation

of capital formation on behalf of the

manufacturer.

“For example, the business owner

was taxed when they bought the shoe

machine and is then taxed each year

he keeps the shoe machine under the

Tangible Personal Property Tax,” Parrish

said. “These taxes make it especially

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burdensome on the manufacturing sec-

tor because it is more capital-intensive

than any other industry sector and Flori-

da is way behind these other states in the

dollar amounts manufacturing spends

on capital expenditures.”

FCMA joins the Manufacturers Associ-

ation of Florida in pushing for tax reform

that will make the state more competitive

for manufacturers. Simply put, there are

some outdated tax codes on Florida’s

books that hinder manufacturing job

growth in the state.

“We’re trying to get some consid-

eration on capital investment,” said

Tom Ryan, president and CEO of cigar

manufacturer Swisher International and

FCMA board member. “It just doesn’t

work anymore to tie job creation to tax

breaks on capital equipment. If there is

a tax incentive tied to the purchase of

manufacturing equipment that, at the

same time, did not require us to add

staff in order to get the tax incentive that

would be a better scenario.”

Ryan, who also serves as vice presi-

dent of the MAF, says he believes mem-

bers of the Florida Legislature are taking

note of this regressive policy and he

looks forward to seeing how proposed

tax legislation will do in the upcoming

legislative session.

“I have seen some positive response,”

Ryan said. “I think our voice is being

heard in Tallahassee.”

Manufacturers will be watching

HB 507 and SB 684 make their way

through committees and on to the floor

of the legislature for passage. Both bills

make it easier for manufacturers to re-

ceive incentives for investing in capital

equipment, another move that will make

Florida more competitive in the manu-

facturing sector.

“Current law requires an existing

manufacturer to show that they will be

10-percent more productive in order

to get the sales tax waived for a capi-

tal equipment purchase,” said Nancy

Stephens, executive director of the MAF.

“Anything the state can do to incentivize

capital investments will be good for the

manufacturing sector because we are

capital intensive.”

But Daniels wants the legislature to go

a step further. He supports total elimina-

tion of the Tangible Personal Property

Tax. He says the tax is stifling innovation

and research and development among

Florida’s manufacturing community.

“Manufacturers will have millions

of dollars of capital freed up when the

Tangible Personal Property Tax is elimi-


16

Figure 13


Disturbingly, Florida ranks at the bottom with fewer than half of the average capital expenditures of these states. The horizontal line on the graph below shows the mean value for this group of states, $676.53. The median value for this group is $691.49.

Given that capital expenditures from year to year are variable, one would hope that the 2008 Florida figures were skewed, or Florida had an “off” year. Using the same technique of dividing by the estimated population – this time the July 1, 2009 estimate – the results showed that Florida’s per-capita manufacturing capital expenditures dropped from $176.37 to $138.20. The next-lowest in 2009 was Georgia at $295.88 per capita.

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nated,” Daniels said. “That money will

go to newer, more efficient, even more

green equipment that will increase pro-

ductivity and result in more, high-skill,

high-wage jobs not to mention make the

state more competitive with other states.”

Daniels said manufacturers will also

have more cash to inject into research

and development initiatives, which lag

now in Florida compared to other South-

ern states.

“We want the state of Florida to

eliminate all of the taxes on what we call

inputs—raw materials, labor, the manu-

facturing plant’s power bill—again,


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this will free up much-needed cash for

manufacturers,” Daniels said. “The tax

burden in Florida is higher on manufac-

turers here than it is in other states and

that makes us less competitive when a

manufacturer is looking to expand and

build, for example, a new auto plant.”

Another set of Florida laws that need

updating involve the permitting process.

Rep. Lake Ray has introduced a bill

that would create a one-stop permit-

ting process for the state, which would

lower the time it takes to get a permit.

The bill would require state agencies to

simultaneously review applications and

supporting documentation and give the

permit applicant a response within 60

days.

A number of processes involving

the state permitting arena are under

review at the Florida Department of

Environmental Protection. DEP Secretary

Herschel Vinyard says the agency is

not lowering any type of environmental

standards but simply streamlining the

processes.

“We’re examining every step that we

take in the permitting process and we’re

asking ourselves the question: ‘Does this

step add value?’” said Vinyard, a former

FCMA board member and Tri-Chairman.

“We want to know whether the step adds

value to either the environment or to the

customer, and if that particular step in

the process does not add value, then we

have to ask ourselves ‘Why are we do-

ing it?’ And we’re going to these lengths

because permitting certainly takes time

and every step certainly costs money.”

One of the practices DEP is using

to review its processes is Lean and it

is doing so with help from staff at the

Northeast Florida District Office of the

DEP, which is a member of the local Lean

Consortium. Vinyard said DEP hopes to

introduce Lean to its other regional of-

fices in 2012. Along with reviewing the

permitting process, DEP is examining the

manner in which permits are handled

from a consistency standpoint by way of

sharing information between agencies.

“We want to ensure that if a permit

applicant inquires about a permit that

they get the same answer in Jacksonville

with the Northeast District, as they would

in the Central District in Orlando,” Vin-

yard said. “Some of that is just sharing

information between districts as we’re

trying to break down the silos in which

we operate.”

One of the key legislative priorities for

Vinyard and DEP surrounds improving

the Environmental Resource Permitting

program also known as ERP, which is

one of the most sought after permits

in Florida. ERPs pertain to protecting

Florida’s precious wetlands and may

involve everything from the local resident

who wants to erect a shed in his back-

yard to a port that needs to build a new

waterfront terminal. Vinyard is seeking

legislation that would increase coopera-

tion between the five water management

districts in Florida and the DEP using


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Herschel Vinyard, Secretary of Florida’s Department of Environmental Protection.


sound science.

“What we’re trying to do is create a

statewide ERP permit where we can have

more consistent decision-making and

consistent science so that if a Floridian

comes in and needs an ERP permit,

they’ll get a consistent decision,” Vin-

yard said. “Here again, whether they

are applying at the St. Johns River Water

Management District for the permit or at

the DEP Northeast District office, they’ll

have the same science-based evaluation

of that permit.”

Florida is a state with abundant water

resources and DEP has a new initiative

that Secretary Vinyard calls “Getting the

Water Right.”

“DEP is constantly working to improve

water quality throughout the state and

making sure we have a sufficient water

supply for people, as well as the environ-

ment,” Vinyard said. “One of the things

the state has done well is promoting

water re-use and manufacturers actu-

ally have been at the cutting edge for a

number of years in re-using and cooling

water.”

Under his guidance, Vinyard is col-

laborating with the state’s water man-

agement districts, water and sewage

treatment officials and the Department

of Agriculture and Consumer Services

seeking input and sharing best practices

regarding water re-use and conservation.

“We need to look for new ways that

we can conserve our water, including

investigating alternative water sup-

plies,” Vinyard said. “We need to wean

ourselves off of constantly pumping the

groundwater sources.”

One of the key water-related issues

Vinyard is working on involves both the

Total Maximum Daily Load regulations

and the Numeric Nutrient Content issue

in the St. Johns River. Vinyard said that

three-year-old nutrient content ru les

regarding the amounts of nitrogen and

phosphorus that can be discharged daily

into the river are working well.

“We have the most stringent nutrient

content rules in the country and EPA has

told us they are going to approve the

new rule,” Vinyard said. “It’s going to

be costly to implement, but we think our

rules are more cost effective than those

proposed by EPA.”

The good news is that the nutrient

content rules will pertain to every Florida

river and, therefore, prevent dangerous

algae blooms that tend to create turmoil

within precious river ecosystems.

“In the lower St. Johns, we’re already

seeing a 67 percent reduction in nitro-

gen content with the rules and in the up-

per St. Johns, we’re seeing a 10 percent

reduction in phosphorus,” Vinyard said.

Vinyard urges everyone to be aware of

the nitrogen and phosphorous issue. He

said we can all do our small part by be-

ing aware of the amount of lawn fertilizer

we apply each year so as not to over-

apply and therefore result in overloading

the aquifer because “it all ends up in the

river.”


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“In the lower St. Johns, we’re already seeing a

67 percent reduction in nitrogen content with the rules

and in the upper St. Johns, we’re seeing a 10 percent

reduction in phosphorus,” said Vinyard.


Along with building sharing best

practices and resources among

the region’s manufacturers, the

First Coast Manufacturers Association

provides an array of benefits and ser-

vices to its members.

In 2011, FCMA members had a chance

to grab some M.O.N.E.Y. by taking part in

the launch of monthly networking oppor-

tunities called Members Only Networking

Event for You. Members get a chance to

unwind from the day’s work and share

ideas and follow up on the connections

they have made or get a chance to make

new ones.

Another avenue FCMA members can

use to connect is our growing online pres-

ence known as FCMA Community. Here,

we have posted videos from sponsors,

our president, updates on FCMA events,

workshops, Professional Progress, as well

as news from around the world of manu-

facturing. Think of it as the manufacturer’s

version of Facebook where you can cre-

ate your own page, post your photo and

share resources. It’s our way of provid-

ing another community building avenue

among our members.

Our members continue to become

noticed for their leadership skills. Several

FCMA members were appointed to sig-

nificant positions in recent months. With

these appointments comes the overall

goal of increasing awareness of the im-

portance of manufacturing in the local

economy.

FCMA members who have been ap-

pointed to boards and committees include

George Robbins of Vistage and former

FCMA President Lad Daniels were ap-

pointed by Gov. Rick Scott to the St. Johns

River Water Management District Board.

Gov. Scott also appointed Aaron Bow-

man of BAE Systems Southeast Shipyards

to the Florida Inland Navigation District,

or FIND, Board, and John Otterson of IFF

was appointed to the City of Jacksonville

Technical Advisory Committee.

We continue our commitment to rais-

ing the profile of manufacturing through

public relations and various educational

programs. FCMA continues to strengthen

its partnership with the Jacksonville Busi-

ness Journal, which will promote the Ex-

cellence in Manufacturing Awards and the

Florida Times-Union, which will promote

the Crane Awards.

In 2012, FCMA will also continue to

provide scholarship programs for with the

University of North Florida’s College of

Construction, Computer Science and En-

gineering, as well as play an increased role

on the Engineering Advisory Council.

Advances at FCMA

Creating breakthroughs in relationship building.

We’re dedicated to seeing our clients’ issues in a

different light. Our relationships are built on trust, insight

and understanding. Get to know us, and see for yourself.

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Documents

Manufacturing First Coast2 Manufacturing on the First Coast 2012–2013 February 6, 2012 Dear Friends: On behalf of the citizens of Jacksonville, I thank First Coast Manufacturers