The Cheapest Place To Process Plastics

If you’re looking to site a plant where operating costs are low, you can’t do better than the Fayetteville/Rogers, Ark., metropolitan area with close runners-up being Little Rock/North Little Rock, Ark., and Winnipeg, Manitoba. The most expensive places you could pick in North America would be San Jose or Oakland, Calif., or around Bridgeport/Stamford/Norwalk/Danbury, Conn.

Those are some of the findings of a fascinating new study by site-selection consultants The Boyd Co., Inc. in Princeton, N.J. A Comparative Operating Cost Analysis for Plastics Manufacturing takes a look at the geographically variable annual costs for 125 U.S. and Canadian locations. Operating costs are scaled to a hypothetical 100,000-sq-ft plant employing 175 non-exempt workers, with $12.25 million in capital equipment, and shipping by truck to nationwide U.S. markets. Among the valuable nuggets of data in this mother lode are hourly wages for 21 plastics job classifications in those 125 locations. (The 231-page report can be downloaded for $825 from www.bizcosts.com.)

Boyd found the most costly plant locations to be the Pacific Coast and Northeast. The middle of the cost range was smack-dab in the middle of the country—in Peoria, Ill. The widest variability in regional costs on a percentage basis shows up in electricity and taxes. But the biggest difference by far in dollar cost is in labor. It accounts for two-thirds of the difference between the highest-cost and lowest-cost locations. It appears that choosing a plant site is not primarily about real estate, kilowatts, taxes, or highway access. In more ways than one, it’s about people. 

 

HIGHEST, LOWEST & MEDIAN ANNUAL COST FOR MODEL PLASTICS PLANT
Site	Labor	Electric	Natural Gas	Plant Amortization	Taxes	Shipping	Total
San Josea  Calif.	$7,380,047	$847,080	$1,049,400	$2,334,322	$772,724	$2,539,184	$14,922,757
Bridgeporta Conn.	$6,984,605	$696,540	$1,546,200	$2,215,757	$798,869	$2,342,993	$14,584,964
Oaklanda Calif.	$7,104,157	$847,080	$1,049,400	$2,185,849	$798,567	$2,537,979	$14,523,032
Peoriab Ill.	$6,138,544	$451,620	$1,103,400	$1,828,531	$902,328	$1,633,024	$12,057,447
Winnipegc Manitoba	$4,454,218	$256,837	$900,762	$1,597,553	$1,401,214	$1,990,587	$10,601,171
Little Rockc Ark.	$5,476,409	$292,500	$924,300	$1,659,028	$562,787	$1,681,733	$10,596,757
Fayettevillec Ark.	$5,398,240	$292,500	$924,300	$1,531,809	$513,748	$1,666,499	$10,327,096
aOne of three highest-cost locations. bMedian-cost location. cOne of three lowest-cost locations. Source: The Boyd Co., A Comparative Operating Cost Analysis for Plastics Manufacturing.