How LED’s BERG And OIC Initiatives Are Helping Louisiana Businesses Secure Widespread Success
Louisiana Economic Development recognizes the significant impact that jobs and investment have on a community. With that in mind, LED’s Business Expansion & Retention Group and its Office of International Commerce are dedicated to retaining and creating jobs across Louisiana.
Known as BERG, the Business Expansion and Retention Group focuses on understanding the challenges and opportunities of companies that drive Louisiana’s economy to help these businesses grow and create more jobs for the people of Louisiana. This is a fundamental component of LED’s mission, given that existing businesses account for roughly 70 percent of all new job growth in the state.
The Office of International Commerce, known as OIC, works to expand international trade volume and bring additional foreign direct investment to the state. FDI projects can spur economic growth and help diversify Louisiana’s economy. OIC’s strategy is effective; since 2008, Louisiana has attracted more FDI per capita than any other state.
In 2017, separate, sustained initiatives by BERG and OIC culminated with project announcements that are of equal significance to the state despite being starkly different in size and scope.
In early 2016, BERG began discussing the future of WestRock’s paper mill in Hodge. The mill opened in 1928 and is the largest employer in Jackson Parish, with an annual payroll of $28 million. The mill contributes several hundred million dollars in economic impact annually to the region while supplying power distribution services to the Village of Hodge and wastewater treatment services to Hodge, North Hodge and East Hodge.
Those considerations shaped discussions between BERG and WestRock that culminated with an October 2017 announcement designed to maintain the mill’s competitiveness and retain over 400 jobs at the mill.
Jobs Created by New Projects
The agreement announced by Gov. John Bel Edwards and WestRock includes investments in new equipment and other mill improvements, and an annual $1.5 million, performance-based tax rebate for five years.
Additionally, WestRock is expected to utilize the state’s Industrial Tax Exemption Program.
This agreement should benefit longtime residents and employees, like WestRock Plant Manager Todd Pyles. Pyles has family ties to the mill that date back to 1933, when his grandfather went to work there—and stayed for 42 years.
“This investment ensures the future of Hodge.”
“This investment ensures the future of Hodge,” Hodge Mayor Gerald Palmer said.
A focus on the future likewise guided OIC’s work with China-based Wanhua Chemical Group, which chose Louisiana for a $1.12 billion chemical complex that will create 170 new direct jobs with an average annual salary of $70,440, plus benefits.
The project grew from discussions with OIC that began in 2013 as Wanhua prepared to meet fast-growing global demand for methylene diphenyl diisocyanate, or MDI.
In March 2017, a contingent of Louisiana officials that included LED Secretary Don Pierson traveled to Wanhua’s headquarters in mainland China to finalize plans for the project.
New Direct Jobs
South Korean chemical maker Lotte’s decision to relocate its U.S. headquarters from Houston to Lake Charles, Louisiana, also capped years of close work with OIC. Lotte Chemical USA had begun building a $1.9 billion joint-venture ethane cracker with Westlake Chemical in Lake Charles, along with Lotte’s independent $1.1 billion monoethylene glycol plant. Seizing synergies, Lotte then announced the move of its U.S. headquarters to the same site.
Louisiana faced competition from Texas for Lotte’s headquarters and from both Texas and South Korea for the MEG project. OIC and Secretary Pierson’s face-to-face meetings with Lotte executives in Seoul were critical to finalizing its additional investment in Louisiana.
Billion-dollar projects like Wanhua and Lotte can overshadow WestRock’s decision to improve its Hodge paper mill and retain 400 jobs. But the projects are equally important. They drive local economies and maintain or provide opportunities for Louisiana citizens.
WestRock’s investment in its Hodge Mill will allow it to operate for years to come, continuing to be home to 400 jobs in its rural community.
LED’s Office of International Commerce in 2017 gained new tools to help Louisiana small businesses identify and pursue export opportunities. OIC received a $183,333 grant from the State Trade Expansion Program, or STEP, to help small companies develop export capacity.
Funded by the U.S. Small Business Administration, STEP helps Louisiana small businesses gain access to new international markets through a grant program that covers travel-related expenses and other costs related to international trade shows.
Also in 2017, OIC received a $170,000 U.S. Economic Development Administration grant to help it develop an economic-forecasting and predictive-investment tool. Known as PRIMO, the tool has identified potential new markets for Louisiana export firms, including Australia, France and Canada.