As published in Toledo Business Journal - June 1, 2014
Communities in northwest Ohio and southeast Michigan continue to win large investments and new jobs for distribution centers making strategic site selection decisions. The region’s geographical location, transportation assets, and a business-friendly approach being employed by a number of communities are resulting in new investment and jobs.
In late May, a Texas-based wholesale food distribution corporation committed to a large investment in northwest Ohio. The business, McLane Company, is a major supplier to grocery retailers and restaurants around the country.
John Minor, president and chief investment officer at JobsOhio, announced that McLane has committed to invest $119 million in the construction of a new distribution facility that will provide 425 new jobs and be located in Findlay.
“This new project is another example of how northwest Ohio is one of the top locations in the world for transportation, logistics, and distribution,” stated Gary Thompson, executive vice president with the Regional Growth Partnership. “More and more businesses are discovering that this region offers the most efficient and cost-effective means to transport products to customers.”
Logistics advantage
McLane is the latest distribution company to select northwest Ohio or southeast Michigan for a large regional operations facility. Significant investment has been placed in the region by national and global logistics firms.
In 2013, Home Depot selected a site in Wood County for a new regional distribution center. The 1.2 million square foot facility, located in Troy Township, is on a 157-acre site in close proximity to access to the Ohio Turnpike.
In 2012, FedEx Freight announced plans to construct a 142,000 square foot service center in Northwood in Wood County. It is in close proximity to an I-75 ramp.
Another investment was announced in 2012 by Newell Rubbermaid, Inc. The company began construction of a $20 million Calphalon distribution center with 363,000 square feet of space.
In 2011, Menards launched a major expansion of its distribution center in Holiday City located in Williams County. The project planned for the addition of 350 new jobs. The facility was originally constructed in 2007, providing Menards with a 700,000 square foot operations center adjacent to an Ohio Turnpike ramp.
A 687,000 square foot distribution center was completed in 2003 by Walgreens. The facility was placed in close proximity to ramp entrances for both I-75 and the Ohio Turnpike in Perrysburg Township.
In 2007, FedEx Ground completed plans for a regional service center close to 600,000 square feet. The company invested $90 million in the project located in Northwood in Wood County.
The recently announced McLane facility is only one of a number of large distribution centers that have selected Findlay to place strategic investments. Other national corporations that have already constructed distribution centers in the Findlay area include Lowe’s, Best Buy, and Kohl’s.
In 1995 Best Buy selected Findlay for a 740,000 square foot operation. The year before, Kohl’s placed a $30 million investment in a 650,000 square foot distribution center in Findlay, which is in Hancock County. The county is also home to a large Home Depot distribution center located in Van Buren.
McLane decision
McLane has four operating divisions that employ over 20,000. McLane Grocery Distribution, Inc. is the operating entity that has committed to this new investment. The Findlay facility will be located in a new 350-acre industrial park, Tall Timbers West. The facility will be close to 338,000 square feet and cost an estimated $38 million to construct. In addition, an estimated $81 million will be spent for the highly automated equipment that will be placed in this center.
Construction is expected to start during the summer with the project scheduled for completion in the first quarter of 2016.
McLane’s grocery unit services more than 45,000 retail locations nationwide. Customers include convenience stores, grocery chains, mass merchants, drug stores, and other retail businesses.
“We’re thrilled that Findlay, Ohio will be home to our 22nd grocery distribution center within our nationwide network,” stated Mike Youngblood, president of McLane’s grocery division.
“The values and work ethic of the community fit perfectly with McLane. The invaluable assistance of State and local officials was one of the primary reasons in selecting Ohio as our new home. Their focus on promoting a business-friendly environment was a critical part of our selection process.”
“We are very pleased that McLane has chosen Findlay’s new industrial park to build their state-of the art distribution center,” stated Findlay Mayor Lydia Mihalik. “Their decision to locate here underscores the strengths of our area which include logistical and workforce advantages.”
McLane logistics
The company currently has 80 distribution centers around the country. These facilities supply over 50,000 products to over 90,000 customer locations.
The grocery division currently has 21 regional distribution centers. Facilities serving Midwest customers include Danville, Illinois; Jessup, Pennsylvania; Nicholasville, Kentucky; and Northfield, Minnesota. The new Findlay distribution center will service customers in Ohio, Michigan, Indiana, Pennsylvania, and West Virginia.
McLane Grocery has invested over $1 billion in its network of 21 distribution centers. The company has also placed significant investment in its fleet of over 1,400 tractors and over 2,000 multi-temperature trailers.
Technology plays a significant role in the company’s logistics capabilities. McLane has invested in extensive bar code scanning and RFID technology. Pick-to-light and pick-to-belt technology provide important operations solutions. The company has also invested in delivery tracking technology enabling customers to track their shipments.
McLane expects the highly automated Findlay distribution center to greatly enhance its efficiency in servicing its customers throughout the Great Lakes region, according to the company. Employee compensation will average $57,000 for the skilled workforce that will be needed for the business’ operations.