Tag Archives: Manufacturing industry

When it Comes to Manufacturing, Indiana Says “Start Your Engines”

Indiana Manufacturing

In 2016, Indiana’s current-dollar GDP was $341.9 billion and ranked 16th in the United States top contributors. With a Human Development Indicator (HDI) of 4.56, Indiana ranks as the 39th most developed state. Estimates predict that this year the manufacturing industry is expected to go beyond its previous impression of 16% of that figure.

Indiana’s economy is considered as one of the best in the United States for several reasons. It has a conservative industrial system, the low taxes levied on commercial and industrial establishments, and a set of relatively stable labor laws that have been in place since the 19th century.

Let’s go beyond the stats and take a look at the most important sectors within the state in addition to some of the most significant companies within each sector.

Pharmaceutical Industry

Within this industry Indiana is the top contributing state, followed by California. Indiana’s pharmaceutical industry exports about $6040 million worth of products each year. The production peaked in 2012 following a 24% annual growth rate. This explains why today, pharmaceuticals are so consolidated within the state.

The pharmaceutical company, Eli Lilly & Company, ranks as #76 on “Forbes America’s Top Public Companies” and is the major player in Indiana. It was founded in 1876 in Indianapolis, by a Swedish chemist Colonel Eli Lilly, and his primary motivation was the lack of availability of medicines to Americans suffering in the post-Civil War era. The company is also the 10th largest employer in the state. A huge plus of Eli Lilly & Co. is that its employees are considered the most valuable resource. This is the reason that has led them many times to invest both in their people and in the state.

Automotive and Parts Manufacturing

While Indiana is the #7 exporter of vehicles and its parts, it has one of the lowest annual growth rates from the top exporters. However, this statistic changes when we limit it to only motor vehicle parts and accessories, a classification we can say is the state’s strength. In this category they come in 4th place very close to their 3rd place competitor, Ohio.

Within the automotive industry, we find one of the most emblematic auto producers, Rolls Royce. They operate within the US and in several parts of Canada. However, none of its venues can compare with the one in Indianapolis, which employs over 4000 of the city’s residents. In 2015, the company decided to invest approximately $600 million in modernizing it’s plant and for technology research. The ex-governor and current Vice President of  the United States, Mike Pence commented that the company chose the state of Indiana because they offer “the business-friendly climate needed to succeed”.  The reason behind this Rolls Royce decision were the incentives offered by the state such as tax credits and a skills enhancement grant.

Medical Device Manufacturing

By 2012 medical device manufacturing was the fourth largest sector in Indiana, generating about $2.84 million, with a very promising annual growth rate of around 7%. It supplies approximately 20,000 jobs for the state and creates an even closer relationship with the NAFTA members who are its main buyers.

Also within this industry, we find the 2nd largest company in the state, Cook Group Inc., reaching revenues of 2.2 billion for the past year. Within this group, we find Cook Medical, which is the part of the company that’s responsible for the production of minimally invasive medical devices. It has 41 medical specialties, and around 16,000 products making a difference in the lives of patients all over the world. We can highlight anesthesiology, pediatrics, gynecology, urology, neurology, and obstetrics. By 2016, it employed about 2500 people and rewards its employees with a salary 56% higher than the state average.

The state of Indiana during the last decades has created an environment where manufacturing industries can continue to develop. These favorable policies, on the part of the state government, have allowed the people of Indiana to collect the fruits of their labor and making Indiana the 13th “Best Place for Business”.

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Adoption of The Euro Pays Off for Slovakia Manufacturing

Slovakia Manufacturing

In 2009, Slovakia made one of its best economic decisions by adopting the Euro. Since then, Slovakia has experienced a steady economic growth from both the services and manufacturing sectors. Unemployment rates dropped and now hover around 8%. Today, 40 Slovak enterprises earn their rank in the 500 most important European companies.

The Slovak manufacturing industry produces more than 30% of the country’s GDP. Since Slovakia tends to pay lower wages than surrounding countries like Germany and the Czech Republic, the costs of production are also significantly lower for foreign investors. Companies like Volkswagen and KIA have become some of the biggest enterprises in Slovakia, having opened plants here to cut costs.

Automotive Manufacturing

As one of the largest automotive companies worldwide, Volkswagen has a major headquarters in Bratislava. This plant produces about 1 million units per year, and just last year, the company spent 150 million euros to build an on-site logistics center. Now, Slovakia is a power force for European car production.

Germany is the number importer to Slovakia; Volkswagen ships in about 90% of assembly parts by train daily. In 2016, exports from Germany to Slovakia valued close to 16 billion euros. Volkswagen Slovakia has now sold more the 6 billion Euros worth of vehicles.

KIA Motors Slovakia is another prestigious automobile company. The plant in Zilina manufactures engines and assembles finished vehicles. They’ve produced more than 300,000 units annually since 2014, and by 2016 exceeded 1.5 million Euros in sales. The plant currently provides employment for about 5000 people, but that number is expected to rise with predicted for expansions.

Equipment, machinery, and activities related to automotive account for more than 40% of the nation’s total manufacturing.

Technology Manufacturing

Most Eastern and Central European countries focus in the automotive, metallurgy, and engineering industries which makes technology a rare exception.

As has been mentioned, foreign investment is of vital importance to the Slovak economy.  Samsung is one of the few technology companies in Slovakia. While Samsung is most famous for their cell phones, they are also a power player in other electronics. In fact, Samsung is the largest producer of LCD screens in the world. Their main plant in Voderady manufactures these LCD screens. Since they do not produce finished electronic products, Slovakia is still a major importer for electronics. Currently, the subsidiary of the South Korean company in Slovakia invoices more than 3 billion euros and employs hundreds of people.

The combined efforts of KIA and Samsung have placed South Korea as the sixth largest trading partner to Slovakia. Korean imports have reached around 5 billion Euros.

Manufacturing Metals

U.S. Steel Košice, a subsidiary of the American U.S. Steel company, is currently the largest Slovak manufacturer in the metallurgical sector. Last year, U. S. Steel Košice nearly broke 3 billion dollars in sales. While it is an important company to the Slovak economy, it does not touch the metal manufacturing of the rest of Europe. With all subsidiaries, U.S. Steel is the 15th largest steel producer in the world.

Changing to the Euro opened many opportunities resulting in the creation of jobs, foreign investments, and an increase in exports. Since then, Slovakia economy has steadily risen.

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The Czech Republic Has Been a Manufacturing Industry Leader for Decades

Czech Republic flag

When the Austro-Hungarian empire split up, Czechoslovakia became an independent nation and immediately established itself as a manufacturing industry world leader. Today, manufacturing is still paramount to the Czech Republic. Nearly 40% of all working citizens have jobs in the industry, and manufacturing comprises 35% of the Czech economy.

With a centralized location in Europe, excellent transportation infrastructure, a wealth of natural resources, and trade agreements linking the East and West, it is no wonder Czech Manufacturing attracts a lot of direct foreign investment. It’s the perfect trading buddy for Germany, Russia, and the rest of Europe.

Mining:

Before we can talk about any other manufacturing industry sector, we must pay homage to the resources that make it all possible. The Czech lands have a wealth of natural resources, mostly including raw mineral deposits. Unfortunately, Iron ore must be imported. However, black coal and limestone mines in the Ostrava region make manufacturing in the homelands cheaper and easier. Leading mining companies include Arcelor Mittal, Evraz Vítkovice Steel, and Třinecké.

Automotive:

As with much of central Europe, the most important sector in Czech Republic manufacturing is the automotive industry. More the 50% of all Czech exports are automotive products, and the industry employs more than 120 thousand people. The largest producers of automobiles in the region are Škoda Auto (Volkswagen group) TPCA (Toyota/PSA joint venture) and Hyundai Motor Manufacturing Czech.

Chemicals:

The Czech chemical sector consists of various niches including basic chemistry, crude oil processing, pharmaceuticals, rubber production and plastics. Since chemical production requires raw materials, water and energy sources, and qualified human’s resources, the chemical industry is often considered an economic indicator. With these ingredients in place, chemical manufacturing dominates the northern Bohemia region, along the Morava River. Major contributors include Chemopetrol Litvínov, Paramo Pardubice, (Petrochemical production) Spolana Neratovice, Lovochema Lovosice, (Basic Chemicals), Kaučuk Kralupy nad Vltavou, and Barum Otrokovice (Rubber industry).

Barriers:

Despite having such an excellent infrastructure and capacity for manufacturing, foreign investors and workers still have difficulty breaking into the Czech market. This is partially due to the language. Although English is widely spoken in business, the saturation of English speakers is considerably lower in the Czech Republic than other European nations. Moreover, Czech is a considerably difficult language to learn.

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