story by Kim Souza
ksouza@thecitywire.com
When Wal-Mart calls, people listen. And the listening could result in more new manufacturing jobs being announced in Northwest Arkansas as a result of the retailer’s efforts to buy more American-made products.
The retail behemoth on Tuesday (July 8) drew a crowd of more than 500 suppliers to its home office and apparel center in Bentonville for its first ever “Open Call” meeting in a quest to source more products made in the America. There were more than 800 meetings scheduled today (July 8) and Walmart U.S. CEO Bill Simon said he had shopping to do. Walmart’s head merchandiser Duncan Mac Naughton also said he was eager to make some deals.
Simon, who introduced Gov. Mike Beebe at the morning session, praised Arkansas for being active in trying to recruit suppliers.
“A country that does not make anything can never be great,” Beebe said in his opening remarks. “Nobody can match America when we set our mind to it. In Arkansas we believe that workforce training is also crucial to setting up manufacturing hubs. But can’t train these professionals as though they are a farm club for other states. Arkansas is open for business.”
He thanked Wal-Mart for entertaining the conversation and also jokingly told potential suppliers that “Wal-Mart likes you better if you manufacture in Arkansas.”
Jospeh Rosenberg, vice president of sales for Aluf Plastics, made the trip from his home state of New York and was setting up for his buyer meeting in Room 35 when The City Wire caught up with him Tuesday morning at Wal-Mart’s home office.
“We sell plastic bags manufactured in Orange (New York). Aluf bags are already sold in lots of retail stores but this is my first pitch to Wal-Mart,” Rosenberg said.
BAGS, BALLS AND TACO PLATES
He was pitching a consumer product tagged “Harmonyx,” a three-ply bag with Microban antimicrobial protection. It is made from 50% recycled material and comes in a reversible black outside, white inside color. Aside from being made in the U.S. the most unique thing about this product was its packaging. It comes in a self-dispensing tube that stands upright in a pantry or under the sink, requiring less space on the shelf. The company has patented the self-dispensing tube packaging.
“We would love to make these products for Wal-Mart and we have a big private label business, perhaps Great Value in the future,” Rosenberg said.
Down the hall, Steven Udwin, CEO of Enor Corp., made the trip to Wal-Mart from his home in New Jersey. He said Enor is already a Wal-Mart supplier for toy/sporting good items. Udwin told The City Wire they were meeting with Wal-Mart buyers today to show products that will be made in their new South Carolina operations, soon to be onshored from production in China.
Encor was showing Wal-Mart buyers whiffle balls, football tees and soccer stands and a catalog of other plastic toy items and sporting goods that will be made in the new South Carolina plant. Udwin said the company chose South Carolina for its new manufacturing facility because of the relationship they have with Kent Bicycles, located across the street of their new site.
Hugh Jarratt, founder of Jarratt Industries in Fayetteville, presented his taco plate to buyers on Tuesday and walked away with an order in hand. Jarratt said finding a manufacturer in his own backyard makes it possible for him to be in business. Polytech Molding in Praire Grove makes the plastic taco plates and double-dipper bowls for Jarratt. They also handle his shipping and fulfillment orders.
SUPPLY CHAIN
Bill Simon, CEO of Wal-Mart U.S., told the crowd of 500-plus during the opening session that Wal-Mart hopes to lead the charge of helping to develop manufacturing and supply chain hubs across the United States over the next decade.
He said assembling the parts needed to manufacture certain products is a critical piece of the puzzle, which is why the retailer extended an open invitation to suppliers to attend the Manufacturing Summit Aug. 14 to 15 in Denver, Colo.
Michelle Gloeckler, executive vice president of consumables and U.S. manufacturing lead at Walmart, told The City Wire that this year’s summit will connect suppliers who make component parts with companies wanting to onshore and needing to source manufacturing components. She said being able to source all the components is one of the biggest factors faced company’s looking to onshore or relocate. Gloeckler rejected the notion that Wal-Mart is a major influencer for companies in where they choose a manufacturing site.
“When you think of the meeting in Orlando last year and the Denver meeting next month, there will be some product suppliers coming in with a laundry list of components and site characteristics they need to make onshoring happen. They will be able to meet with several states and component suppliers all in the course of two days,” Gloeckler said.
She said many of the suppliers were already considering onshoring possibilities.
“We are able to help them make contact with state leaders and we have given some extended contracts when it makes sense,” Gloeckler said.
ARKANSAS DRAW
Grant Tenniille, executive director for the Arkansas Economic Development Commission, told The City Wire that there are two new manufacturing deals coming to Northwest Arkansas as a result of the Wal-Mart initiatives.
“Expect an announcement later this summer,” he teased.
When probed, Tennille said to think of Redman Associates and what they make (plastic ride-on toys) and the two other manufacturing deals require similar components. Redman announced in October 2013 plans to invest $6.5 million in a toy assembly operation in Rogers estimated to create around 75 jobs.
“The companies we have visited with so far have expressed an interest in Northwest Arkansas for their onshoring effort because they see Wal-Mart as their largest customer. Plastics and plastic injection molding is turning out to be a niche area that Arkansas has some capacity in, as well as a trained workforce. It has given us a sweet spot,” Tennille said.
He said it’s not just those manufacturers making the end-use plastic products, but those suppliers who recycle used product into beads that go back into new products.
“We hope to keep tightening up the supply chain for plastics. We are really bullish on plastic injection molding. The geographic region is the a large slice of Arkansas in the Northwest quadrant with strong companies in Mountain Home, in central Arkansas, Fort Smith and Northwest Arkansas,” Tennille said.
He said state uses its leverage with Wal-Mart when recruiting new businesses. But it often comes down to the workforce needed to run a manufacturing site and access to the raw materials.
When asked why the biggest onshoring deals announced so far by Wal-Mart are both in South Carolina — Kent Bicycles and Element Televisions — Tennille grinned and said “we have more deals coming.”
“When we announce the next two deals later this summer, Arkansas will have three, the same number of South Carolina and more than most states,” Tennille said.