European Brand Profits From a Non-metro US Location
By Beth Braswell
Next time you shop at Ikea, the European home furnishing giant, look again - you may be buying furniture made in Danville/Pittsylvania County, Va. Swedwood, Ikea’s furniture production subsidiary, chose rural Danville for its foray into American manufacturing.
To call Danville “rural” might lead you to think that it hadn’t progressed from its agricultural roots or that it didn’t know a bonjour from a Guten Tag. Those assumptions would be very wrong. Danville has more than 30 countries represented in the community, from scientists to engineers. Its business and industrial parks are testament to their high technology ambitions. They’re about an hour away from two international airports. Now, it’s not Atlanta, but Swedwood wasn’t looking for the big city.
Cost was a key consideration for the location. Proximity to suppliers and to Ikea stores east of the Mississippi was paramount. A few hundred miles difference could cost millions of dollars in transportation costs. With an approximate employment of 740, labor costs were absolutely critical. “We didn’t want to be too close to a metropolitan area because the labor costs are higher,” says Jörgen Lindquist, Swedwood North America vice president. “We like to be within commuting distance to be assured of a labor pool and we need access to overseas travel.” When it came down to the final decision, “the main deciding factor was the preparedness of the site.”
Carol Motley, executive director of Pittsylvania County Economic Development, says the 208-acre site was as build-ready as possible. “Water, sewer, gas, utilities, fiber - everything was there and we had done as much permitting as we could do on the front end.”
Lindquist agrees. “The public sector has been very dedicated to making this a smooth and speedy process.” Swedwood is right on schedule with production on track to begin January 2008. Lindquist has been extremely happy with the caliber of workers available for the Danville facility. In fact, recruiters were so impressed with the local “attitude” that they suggested a training program to enrich the skills of the workers and their confidence levels so that they could be hired into more skilled jobs. By year’s end, Swedwood will have 100 employees and 250 by the end of 2008.
Frank Strickler, with the Virginia Department of Business Assistance, says Southside Virginia, the part of the state where Danville is located, is filled with people who have a good work ethic. “Many of them have only worked in single position jobs,” he says. “Now Swedwood is training them how to be decision-makers and empowering them to multitask. Swedwood is technologically savvy, employing robotics throughout their facilities. The employees they want need to be thinkers.”
At build-out, the Swedwood complex will feature three facilities totaling more than 3 million square feet. A key group of local, state and federal officials, electrical and construction engineers, workforce training and others visited a similar Swedwood facility in Poland. “It was mind-boggling to see the queue of trucks lined up at the plant,” says Motley, “but we can handle it here with four-lane connectors to Highway 58 and two miles of new rail that feed directly into the plant.”
Lindquist is one of six Europeans from Sweden and Poland involved in construction and start-up of the Danville facility. “Our goal is to prove that Danville was a good choice. We believe we made the right decision.” With start-up just around the corner, Lindquist’s three children also support this Virginia location. “They’re already trying to figure out how to stay here longer,” Lindquist adds.