Vallejo seen as emerging regional manufacturing hub
VALLEJO — Orcem Americas, Inc., plans to build a $50 million “green” cement manufacturing facility on 4.8 acres that are part of the Vallejo Marine Terminal across from the Mare Island waterfront.
Orcem signed a 65-year lease for that part of the 34.3-acre terminal, the former home of a General Mills flour processing facility.
This project has an investment budget of $50 million and will involve 140,000 hours of union labor, according to Orcem President Stephen Bryan. Once California Environmental Quality Act (CEQA) certification is obtained, construction is set to run 18 months, positioning the plant for commissioning in the second quarter of 2016.
When fully operational, this plant is set to employ about 60, produce 2,200 tons of cement per day and have an almost zero carbon dioxide–equivalent emissions footprint. Emissions saving are projected to be 0.8 tons of gases per ton of cement produced.
The announcement came during a joint “Manufacturing Matters” meeting of the Vallejo Chamber of Commerce and the Solano Economic Development Commission on June 12 attended by nearly 100 local business leaders and representatives of elected officials at the Vallejo Courtyard by Marriott Hotel.
Orcem is the U.S. subsidiary of privately held Ecocem Materials Ltd., based in Dublin, Ireland. Other plants are in Rotterdam, Netherlands, Marseilles, France, and Dublin.
Ecocem sells 1 million tons of cement annually in six countries. The product produces almost-white cement, helping to reduce the urban heat island effect.
Made from high-quality granulated material resembling damp beach sand, this next-generation cement is a byproduct of processing ore into metallic iron in Japan.
The new plant will utilize energy-efficient processing equipment from Germany to grind and dry the raw, granular material into powder for distribution by truck. All equipment will be inside a vacuum-sealed, clean and energy-efficient building that is also being designed to reduce noise.
“For years the U.S. has been shipping grain to Japan on large ships that come back empty,” Mr. Bryan said. “Now these vessels will carry our raw material on the return trip docking in Vallejo. Our product is more durable than traditional cement and delivers a longer life span for structures and road repairs.”
This unique cement has been used locally in building the new 49er stadium, at Apple’s headquarters, for the eastern span of the San Francisco Bay Bridge and also for NASA applications.
“We were looking for a deep-water port with berths located near major Interstate highways and rail lines,” Mr. Bryan said. “Vallejo has all three.”
He said Vallejo is an ideal distribution hub close to San Francisco and only 60 miles from Sacramento and 70 miles from San Jose.
With Northern California importing most of its raw materials, this port could be a domestic and international gateway for bringing coiled steel, timber and other key building materials into the state.
Mr. Bryan estimates that Orcem will pay the city of Vallejo $360,000 annually as a utility users tax, and $410,000 to Solano County each year as property tax. The overall positive GDP economic impact on the area is estimated to be $13 million.
Sandy Person, president of the Solano County Economic Development Commission, officiated the meeting.
“Orcem can serve as a catalyst for other firms to consider relocating to this region to be close to producers and suppliers of key infrastructure building materials,” she said.
Vallejo Chamber of Commerce President and CEO Rich Curtola said “something positive” is happening in his home town.
“I feel change in the air,” he said.
Vallejo Vice Mayor Bob Sampayan said the U.S. is bringing back elements of sustainability: manufacturing and facility reuse.
“Economic development like this will rebuild our community, take us into the future and provide jobs for our youth,” he said.
Kish Rajan, director of Governor Brown’s Office of Business and Economic Development (Go-Biz), said California’s economy has recovered and is moving in the right direction.
“Since 2013 the private sector has produced 300,000 jobs,” he said. “Our state leads the nation in economic output, and has tremendous economic capacity. We have regained our position as the eighth-largest economy in the world.”
He sees manufacturing as the sector providing opportunity in a state where $200 billion in economic output, No. 1 in the U.S., is produced.
However, Mr. Rajan said there are still disparities across the state. While coastal cities, driven by technology, are hubs of innovation and are doing well, other regions, not in tech sectors, see less favorable conditions and lack economic momentum — some have 10 percent–15 percent unemployment.
As a stimulus to business, he referenced the governor’s California Compete Tax Credit Program, offering $780 million in business tax credits. The first allotment of $30 million in tax credits was announced last week, with another $150 million in credits to be issued soon.
He said another incentive, a sales tax exemption for the purchase of equipment by all manufacturing companies, will go into effect July 1, saving 4.19 percent — the state’s portion of the sales tax.
Bill Browne, director of workforce and economic development with Manex Consulting, a firm providing services to small and mid-size manufacturers in Northern California, said there are more manufacturing jobs in the Golden State today than five years ago, and that NorCal leads the nation in coming out of the recession with three percent job growth, compared with two percent for the U.S. as a whole.
“With 41,000 manufacturers, California has more than any other state, accounting for over 1.3 million high paying manufacturing jobs. Some 11,500 of these firms are based in Northern California. In addition, re-shoring is bringing more jobs back to the U.S., including work for contract manufacturers. We can continue to grow, but we have to be the best at what we do,” Mr. Browne said.
Correction, July 16, 2014: The vice mayor of Vallejo is Bob Sampayan. A previous version had an incorrect name.
Correction, July 14, 2014: The Vallejo Marine Terminal project is across the strait from Mare Island. A previous version of the story had incorrect information.
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