IOWA CITY – Iowa’s top economic development official says a Saudi Arabian company’s decision to open a distribution center in Cedar Rapids could open doors for the state in the Middle East.
Saudi Basic Industries Corporation’s Polymershapes business on Wednesday announced the opening of a 12,500-square-foot plastic materials distribution center at 960 32nd Ave. SW.
SABIC Polymershapes provides distribution of plastic sheet, rod, tube and film materials to customers in the transportation, industrial and manufacturing, and building and construction markets throughout the United States, Canada, Mexico and Chile.
Saudi Basic Industries Corp., which employs 33,000 worldwide, had 2010 revenues of $40.5 billion and generated net income of $5.73 billion. It was created by Saudi royal decree in 1976.
Iowa Economic Development Director Debi Durham said the state has been looking at economic development opportunities in the Middle East.
“We’ve been having some internal discussions about whether we should be looking at Turkey and other places in that region,” Durham said Wednesday in Iowa City. “Our international office will be doing the work, but before we do any trade missions, we need to make sure we have some real alliances that are strategic. We need to have some companies that we can call on to discuss import and export opportunities.
“We will reach out to that company to ask for their assistance in opening doors. Leveraging the private sector’s help as we go into other countries just makes sense.”
Durham made her comments after delivering the keynote speech to an almost capacity audience of 300 at the Iowa City Area Development Group’s annual meeting at the Sheraton in downtown Iowa City.
Durham outlined the state’s new economic development organization, the Iowa Partnership for Economic Progress, and discussed initiatives to create 200,000 new jobs in Iowa over the next four years.
”The policies at the state level need to support collaboration and moving intelectual property to commercialization or the creation of new businesses and jobs,” Durham said. “Texas does something very interesting by giving 50 percent royalties to their university researchers for commercialization and tying their tenure track to commercialization.
“I don’t know that we need to do that, but I believe we need to have some discussions about policies that help us foster commercialization of intellectual property.”
Durham said the new economic development structure will include a nonprofit component that has the goal of establishing a $100 million seed capital fund for start-up companies encountering the “valley of death where no bank will take a chance on lending to them.”
“I don’t think that’s an area where you risk state funding,” Durham said. “It has to come from a fund developed by the private sector.”
Durham said developing and fostering a culture of innovation will be key to the successful creation of jobs and a growing state economy. She said creation of the Iowa Innovation Council, the work that universities are doing to commercialize research, and the strategic alliances that have been formed “have set Iowa on the right path,” but more work remains to be done.
“We need to expand interaction with federal laboratories,” Durham said. “It was baffling to me when you looked at the federal biolaboratory that went to Iowa State University that there was a question of whether the state could come up with the $2 million required for us to play.
“To me, that shouldn’t have even been questioned. We should have a pot of money set aside somewhere to encourage more of these lab activities and make sure we have the pieces needed for participation.
“It’s important not only because it creates new companies and jobs, but it also builds the knowledge-based economy that is equally important as we move forward.”
Durham said exports will continue to play a critical role in the state’s economy, noting that Iowa’s primary agriculture and durable goods exports align well with China’s “Five Year Plan” for economic prosperity. She said the state will continue to work on direct investment by foreign firms in Iowa, leveraging existing private sector relationships.
ICAD President Joe Raso, speaking before Durham, said the economic development organization was able to end the year with 8.9 percent growth in private sector jobs while attracting several new employers and assisting others with expansions. Raso said Corridor employers created or retained more than 3,100 jobs in the last fiscal year with an average wage of $20.30 an hour.
Raso said ICAD is close to announcing a new tenant for a “shovel-ready” site at the University of Iowa’s Oakdale Research Park and the Corridor has other “shovel ready” sites available in Iowa City, Marion and Tipton. He noted that existing business represents more than 70 percent of the growth in the area economy.
Raso said employers surveyed for the Skills 2014 report are projecting the need for 11,000 new and replacement workers in coming years. He said many of those positions will require specific skill sets and educational backgrounds.
Raso said ICAD has begun developing a culture of innovation in the Corridor through connections, spaces and programming. He noted such activities as Jellys, Tech Brews, Meetups and Pitch & Grows that have brought entrepreneurs together with each other and potential investors.
ICAD Chairman Scott Fisher, president of McCrossen Consulting, said plans are being formulated for the organization’s next fundraising campaign. Fisher will be succeeded as ICAD chairman by Chuck Peters, president and chief operating officer of SourceMedia Group.