The Times-Picayune, July 22, 2010
Transportation Consultants, Inc. said Thursday that it will move its headquarters to New Orleans and establish a $13.5 million warehouse and distribution facility at the port.
The facility will bring with it a total of 80 jobs, but economic development officials say the real value of the plant will be its ability to keep shipping activity in New Orleans that is now going to Houston, while introducing a new approach to manufacturing in New Orleans.
The facility planned by TCI will package the plastic pellets that are used in a wide range of manufacturing processes and deliver them directly to the plants.
Currently, the pellets, which are melted down to make any number of plastic goods, are made in the many plants between New Orleans and Baton Rouge. No Louisiana shipper has the capability to package and ship the pellets in specific sizes, so the goods leave the state in bulk, where they are packaged elsewhere.
Gary LaGrange, president and CEO of the Port of New Orleans, said the new plant gives Louisiana the opportunity to capitalize on that lost business, which he thinks will cause more growth than the expected 60 direct and 20 indirect jobs the facility itself will bring.
“I think it’s going to add work to jobs elsewhere,” he said.
He also said the “investment gives the local transportation sector the tools to handle chemical products more efficiently.”
Michael Hecht, president and CEO of the economic development group Greater New Orleans Inc., says the packaging capability, called value-adding, increases profits for New Orleans companies.
“This gives us the ability to do value-added manufacturing, which we haven’t had in the past,” he said.
Hecht says Louisiana ships most of its raw goods in bulk form, with the exception of coffee, leading to lower profits. “I think this begins to take us in a new direction,” he said.
Hecht also says the plant is a step in the right direction in terms of replacing the massive job loss caused by the shutdown of the Michoud Assembly Facility and the Avondale Shipyard. Northrop Grumman announced plans last week to close the Avondale shipyard in 2013. The Michoud plant is winding down after completing work on the last external fuel tank for the space shuttle.
“We all recognize that it’s unlikely we’ll find a 5,000-job company that will replace Avondale one for one,” Hecht said. That’s why companies like TCI are important. Hecht sees a future where several businesses like TCI make up a “more diverse business portfolio” that’s less risky. “It’s going to take a while to get there, but I’m confident we will,” he said.
The announcement, coming on the heels of the Avondale announcement and the rollout of the last external fuel tank at Michoud, was attended by Gov. Bobby Jindal and other local officials.
“I know our city and our state have faced some challenges, but today is a day to celebrate,” Jindal said. “This is a great day for New Orleans, a great day for Louisiana.”
TCI is a private logistics and warehousing provider that was founded in 1983 in New Orleans but moved to Harahan in 1990.
Jack Jenson, TCI’s CEO, said he jumped at the opportunity to return to New Orleans.
“As Drew Brees said, ‘We begin to understand the importance of making it home and making it successful,'” he said.
Jenson said the project could not have been done without help from state officials from the Port Authority, Louisiana Economic Development, and Entergy Corp.
The project is progressing in two stages. The first stage includes construction on the warehouse and container facilities. TCI obtained Gulf Opportunity Zone bonds and New Markets Tax Credit equity to help finance this construction.
For the second stage, Louisiana Economic Development delivered a total of $900,000 in incentives, money TCI will use to build a rail spur that will allow shipments of plastic pellets to be delivered directly to the plants.
Jindal said that although attracting outside business is important, locally owned companies such as TCI are the driving force behind job recovery.
“The majority of jobs created will come from existing companies,” he said. “We’ve got another Louisiana-based company not just making jobs, but keeping jobs that are already here.”
Jindal pointed to numerous surveys, studies, and rankings he says indicate Louisiana and New Orleans are bucking grim national employment trends. “Every single month during the economic recession, we’ve had lower unemployment than the national average,” he boasted.
New Orleans Mayor Mitch Landrieu also spoke at the event, commending the company for showing confidence in the city and the port.
“TCI’s relocation and expansion will bring new jobs, new tax revenue and a growing, diversifying business to New Orleans,” he said.