Richmond, Northern Virginia fare well in corporate location study
- April 15, 2011
The competitive advantages of Richmond and Northern Virginia were revealed in a recent corporate location study for the medical devices and supplies industry.
The study by The Boyd Co., a Princeton, N.J., corporate location consulting firm, compared costs in 56 areas in the U.S, Canada, Mexico and Latin America for a hypothetical production plant employing 325 people. The study considered operating costs such as labor, energy, amortization, taxes and shipping.
Among U.S. cities, annual costs ranged from $30.7 million in San Jose, Calif., to $22.6 million in Sioux Falls, S.D. Maquiladora, Mexico, was the overall low-cost leader at $16.9 million.
At $23.2 million, Richmond ranked among the eight lowest-cost U.S. locations, a group that included Memphis, Tenn.; Tulsa, Okla.; San Antonio, Texas; Birmingham, Ala.; Louisville, Ky; Lexington, Ky.; and Sioux Falls. See how Virginia fared in the following chart.
By contrast, Richmond was less expensive than Atlanta; Tucson, Ariz.; Fort Myers-Cape Coral, Fla.; Austin, Texas; Fort Wayne, Ind.; Nashville, Tenn.; and Salt Lake City, Utah.
Northern Virginia, by contrast, was in the middle of the pack at $25.4 million. Nonetheless, The Boyd Co. pointed out that the region’s costs still were much lower than other high-tech havens in New England, New Jersey and California, which ranked among the top 10 most expensive sites. Northern Virginia also was less expensive than Baltimore; Rochester, N.Y.; Montreal; Miami and Manchester, N.H.
Richmond and Northern Virginia were the only Virginia regions examined in the report.
The Boyd Co. said the medical devices and supplies industry already employs about 6.000 workers in Virginia with an annual payroll of more than $200 million.
The study notes that costs are the major driver of site selection decisions in the industry, which has an expensive regulatory review process. The industry also soon will face a 2.3 percent sales tax on medical devices under the new federal health-care reform law,
The study said regulatory costs are somewhat fixed while other costs are not and vary widely by industry.