Alive with Opportunity
Youngstown is the county seat of Mahoning County, and Warren is the county seat of Trumbull County, with both communities situated along the Mahoning Valley in Ohio. In part due to the Utica and Marcellus shale formations, Youngstown/Warren has become the supply chain capital of all things related to shale and is presently buzzing with related activity and opportunities.
Youngstown/Warren has always been an ideal location for heavy industry, including a variety of manufacturing, as well as warehousing and distribution. “There was a time when Youngstown and Warren were predominantly a steel-making community,” says Youngstown/Warren Regional Chamber Chief Operating Officer Sarah Boyarko.
“It’s ideally situated in terms of transportation logistics,” says Youngstown/Warren Regional Chamber Foundation President Guy Coviello. “It has a very industrial-focused workforce. However, in the more recent past, it has been much more focused on shale-related companies because of the Utica and Marcellus shale plays.”
“The majority of residents or folks in the Valley were unaware of the geological make-up of our two-county footprint with regard to the Utica and Marcellus shale plays,” says Boyarko. “Obviously, the industry knew what was here and came in droves during that timeframe, in an effort to lease land, construct drill sites and install transportation infrastructure, in addition to siting a whole variety of manufacturers and distributors within the upstream and midstream supply chains.”
Youngstown/Warren has become the supply chain capital of the Utica and Marcellus shale plays by securing over 30 percent of all manufacturing in Ohio related to the exploration through local expansion and the attraction of new investment. “We have a lot of pipe manufacturers and all of these companies that do supply chain work in the oil and natural gas industry,” says Coviello.
He continues, “From 2010 to 2014, the Mahoning Valley, which is the Youngstown/Warren region, saw about $5 billion worth of investment and the creation of over 4,000 direct and indirect jobs in supply chain companies like Vallourec, a French company which invested over $1 billion in building new factories here and providing pipe for oil and gas companies,” says Coviello. “But there are a lot of other companies that had smaller investments in providing services and goods for the oil and gas industry. Some of our existing local companies exploded almost overnight because of the shale play. And the future looks extremely bright in that area.”
Many other nearby communities are also reaping the economic benefits of the industry. “In Monaca, Pennsylvania, Shell Petrochemical is building a $5 billion ethane cracker plant that will be operational around 2021,” says Coviello. “Also, in Belmont, Ohio, PTT, a company out of Thailand, is building another one of what they’re calling ‘world-class ethane cracker plants,’” he explains.
“There was a study done by a company called IHS Markit in early 2017 that indicated that there was enough natural gas in the Utica and Marcellus shales to support six of these world-class cracker plants. That right there would be $30 billion worth of investment,” Coviello shares.
“The proliferation of these cracker plants and us being able to be part of that supply chain is going to lead to a plastics and petrochemicals cluster in the tristate area of Ohio, Pennsylvania, and West Virginia,” he says. “There was another study done last year by the American Chemistry Council, and that study says that if an ethane storage hub is built in the tristate, it would lead to the creation of more than 100,000 new jobs in plastics and petrochemicals by 2025.”
Youngstown/Warren is part of the Tri-State Shale Coalition. “The coalition was created through a memorandum of understanding between the governors of Ohio, Pennsylvania, and West Virginia, and it works to grow the shale-related industries,” says Coviello. “That coalition is working to get the ethane storage hub built – a $10 billion project – to store ethane that will then stabilize the market so that plastics and petrochemical companies will find it more profitable to be here,” he says.
“China Petrochemical announced last year that it will spend $81 billion in West Virginia. There isn’t enough flat land in all of West Virginia to handle $81 billion worth of investment so we will see a chunk of that here in the Mahoning Valley. Another study by IHS Markit, which was completed this year, stated that if you were to build one of those cracker plants in the tristate, it would be four times more profitable than if you build it in the Gulf of Mexico,” says Coviello.
“Historically, those cracker plants have been built around the Gulf of Mexico because that’s where a lot of the drilling from that industry has taken place and a lot of the supply, but because of Utica and Marcellus shale being here and so prolific and because the plastics and petro companies are already in the Midwest and northeast parts of the country, it would mean reducing transportation costs by building cracker plants here.”
Beyond the shale sector, Youngstown/Warren is also proud of its business incubator and modern approach to additive manufacturing. “A lot of it is around additive manufacturing at America Makes, the national additive manufacturing innovation institute designated by the federal government to advance 3D printing in the U.S. In fact, the Department of Defense (DoD) has called upon America Makes to create the additive manufacturing supply chain for the entire DoD,” says Coviello.
“The additive industry will truly revolutionize manufacturing. It has enormous growth potential,” says Coviello. “The Ohio Chamber Research Foundation released a report called Ohio BOLD in which it calls on the state of Ohio to embrace additive manufacturing and capitalize on all that’s happening in Youngstown to grow the state’s entire economy in the future.”
One of the challenges that Youngstown/Warren faces, however, much like many other communities, is its workforce or lack of it. “Our biggest challenge is one that is not unique to Youngstown/Warren as it is nationwide – that is our workforce,” says Coviello. “But we have implemented a workforce program that’s unique and successful.”
Youngstown/Warren has always been associated with innovation. “In my opinion, the innovation that has taken place here, both past and present, distinguishes the community,” says Coviello. “If you look in the past, there are many interesting yet little-known facts, such as how the Warner Brothers (who pioneered putting sound in movies) were from Youngstown and how the drinking fountain was invented by a man in Warren,” he says.
“If you look at the present, at the current innovation taking place, a Youngstown native returned to build a factory that will produce the self-chilling can for products like soda, beer and iced coffee,” says Coviello. “There will eventually be military and medical applications for this technology.”
Another great aspect about Youngstown/Warren is its access to markets. “We have access to the great majority of the buying population,” says Boyarko. “It only takes one day to travel to Chicago, New York, or Toronto and an hour and a half or so to reach Cleveland and Pittsburgh. A lot of businesses locate here simply because of access to the people that are going to buy their products.”
Youngstown/Warren also boasts a low cost of living as well as a low cost of doing business. “That’s definitely an important aspect when a company is looking to select a new location,” says Boyarko. “We have a wide variety of available properties, which is the first step when a company is looking at locating somewhere – whether it’s land for new construction or an existing building – and we’ve got a nice mix of both.”
One such location that has had a lot of interest is the BDM property. This location, purchased out of bankruptcy in 2012, presents 1,000 acres, consisting of 300 developable greenfield acres and a 321-acre brownfield that is set to be fully remediated in coming months. With the demolition of the former steel mill on site, this property is a blank slate that offers all of the amenities that an industrial company may need, including access to appropriate utilities, rail service and significant infrastructure on-site and access to regional workforce and suppliers.
For Youngstown/Warren, the future is looking bright as the community grows and aims to continue working towards becoming both an additive manufacturing and plastics and petrochemical cluster.
As the lead economic development entity, the Regional Chamber is currently managing $2.2 billion worth of industrial projects that it expects to announce throughout the next 12 to 24 months. The entire value of investment is industrial in nature and could result in the creation of 2,021 new jobs, and for the local expansions, the retention of 2,046 existing positions. With these 28 projects being industrial in nature, manufacturing is alive and well in the Mahoning Valley.