Regional reboot

Southwest looks to high-tech biz for new direction

Published February 28, 2021 by Joan Tupponce

Public and private investments are boosting the economy in Southwest Virginia, bringing in a diversified group of new companies, from indoor salmon farming to medical information technology firms — as well as a long-awaited casino.

Addressing the region’s steady decline in the coal industry, officials in the Southwestern region continue to lay out the roadmap for economic sustainability by building on its strengths, a focus it began with the launch of InvestSWVA in September 2019, a marketing plan that aims to bring new businesses to abandoned coalfields.

The vision includes high-tech companies, data centers and investments in information technology and energy innovation as well as an emphasis on advance manufacturing and the craft beverage industry.

Like other regions dealing with the pandemic, Southwest residents have been able to rally together to attract new investments and help existing companies survive and grow. It’s particularly significant in the region, where less than half of all households earned the basic cost of living in 2018, according to a November 2020 report by the United Ways of Virginia. With the combination of the pandemic and resulting economic crisis, numbers are likely worse today, the report says.

When it comes to private investments, The United Co.’s plan for a casino in Bristol came to fruition in November 2020, when local voters supported a referendum allowing Hard Rock International to build a resort that is expected to create 2,000 jobs and up to $21 million in annual tax revenue.

Cooperation equals success

The one constant in 2020 was “the cooperation and communication across the region among the economic developers and others involved in improving the region,” says Mike Quillen, chair of the Southwest Virginia Energy Research & Development Authority and an adviser in the mining and energy industries. “Everyone is working together to advance the region in a difficult time across the board due to the pandemic. The resiliency of the residents will always be our mantra.”

That atmosphere of cooperation helped Russell, Tazewell and Buchanan counties land Pure Salmon International Co., which will construct a large indoor fish-farming operation. The company purchased a 203-acre site for its 1-million-square-foot building over a three-year period, a $228 million investment expected to employ about 230 people by 2023.

“This was Tazewell’s project, but they ended up with property that borders Russell and Tazewell counties,” explains Ernie McFaddin, chairman of the Russell County Industrial Development Authority.

According to officials, it will be the world’s largest vertically integrated indoor aquaculture facility.

“This would not be possible without the support of the Virginia Coalfield Economic Development Authority [and] Buchanan, Russell and Tazewell counties,” says Del. Will Morefield, R-Tazewell. “We are confident this project will set a precedent for attracting other investments on an international level. We hope this will be the beginning of an economic revival in the coalfield region of Southwest Virginia.”

In January, Rambler Wood Products announced a new manufacturing plant in St. Paul, a $7.6 million investment that is set to create 73 jobs. It will be in the former Bush Furniture Industries building, and the company has committed to sourcing at least 55% of its timber from Virginia in the next three years.

Focusing on crucial industries

The region’s focus on advanced manufacturing and IT have brought in  several projects.

Grayson County won a bid for Metalworx Inc., a manufacturer of precision-manufactured components, assemblies and products for a variety of industries. The company is investing $7.6 million to relocate its headquarters and manufacturing functions from South Carolina to the former Core Fitness Complex in Grayson County, creating 59 jobs, the company announced last June.

Information technology projects in the region include Reston-based IT federal contractor 1901 Group, which is investing $1.15 million to establish its third Virginia operations center and creating 150 jobs. Recently acquired by Reston-based Fortune 500 company Leidos Holdings Inc. 1901 Group has a significant presence in Blacksburg and started hiring for its new location in Abingdon, although new hires are working from home until the pandemic subsides.

Whitney Czelusniak, economic development coordinator for Washington County, says the county focuses on “asset-based” economic development, which allows more job diversity and economic stability. “We emphasize growth in traded-sector and technology-driven industries, including manufacturing and information technology,” she says.

InvestSWVA has devoted attention to the data center business, which is well positioned for a region that has inexpensive land, geothermal cooling opportunities and a workforce ready to be trained, according to a yearlong study. 

“We see that renewable energy as the greatest opportunity for Southwest Virginia to reinvent itself, building on its legacy of energy production and using existing coal industry assets including land, power and water,” says Will Payne, managing partner of Coalfield Strategies LLC and director of InvestSWVA.

In the end, adds Quillen, the region hopes to bring higher-paying jobs like “we had in the coal industry. The jobs that could evolve from our work on diversified energy opportunities may not reach that level but will be on the upper tier of pay in the region. Plus, as we have seen in the decades of coal and natural gas, there were ancillary jobs that spin off of that activity. The suppliers, vendors, even restaurants and retail benefit from disposal income generated from higher-paying jobs.”

Already the region has attracted eHealth Technologies Inc., which is investing $375,000 to establish a new customer support center in Scott County, expected to create 160 jobs. The Rochester, New York-based company provides medical record and image retrieval and clinical intelligence services to more than half of the nation’s top 100 hospitals.

Expanding for greater success

The region also saw several expansions last year. In Washington County, SPIG Industry LLC, manufacturer of highway guardrails and guardrail end terminals, is investing $7.9 million and adding 113 jobs to its operation in the Bristol-Washington Industrial Park. The company will build additional production plants and a welding shop, as well as a new rail spur line to serve its facility.

Grayson Natural Farms LLC, a producer of the Landcrafted Food grass-fed, organic meat snacks brand, is investing $1.5 million to expand its smokehouse and production operation in Grayson County and create 40 jobs. The company will add 35,000 square feet to its manufacturing facility in Independence.

Klöckner Pentaplast Group, a producer of recycled content products and high-barrier protective packaging, is investing a total of $68 million to expand its facilities in Louisa and Wythe counties.

Bland County’s large private sector employer, Hitachi ABB Power Grids, a producer of dry-type transformers, is investing $6.2 million to upgrade equipment and increase manufacturing capacity at its operation in the county, adding 40 jobs. The company employs more than 800 workers throughout Virginia, with approximately 332 at its Bland facility.

The region is also working to respond to a need expressed by breweries and distilleries to buy Virginia-grown grain, support small family farms and reduce food miles. InvestSWVA’s Project Calypso, which leverages the region’s agriculture history to become a significant supplier of craft malt to breweries and distilleries in Virginia, has launched Appalachian Grains as a specialty grain broker operation supplying craft malt to breweries and distilleries around Virginia.

“We have created a whole new market — growing malting-quality barley — that had not been grown in Southwest Virginia before 2020.  We delivered 17,600 pounds of our malted barley to 18 breweries all around Virginia, including larger ones like Devils Backbone and Hardywood,” Payne says. “We are creating new market opportunities and giving farmers additional ways to be sustainable and make more money.”

Related content:

• Southwest Virginia’s recent deals
• Payout on a dream: Bristol started casino quest in 2018

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