Rapid Granulator is a Bredaryd-based designer, manufacturer, and seller of granulation equipment for the plastics industry. Rapid’s granulators are used primarily by plastics products manufacturers as a way to recycle and reuse surplus materials left over during the manufacturing process.
Rapid had a long history of production and sales in the U.S. market, but when the ownership of the company changed, they needed to seek out new facilities for their operations. In order to find out whether the best option was to continue operations in Pennsylvania or to establish in another state, Rapid sought help from Business Sweden’s local office. Business Sweden conducted a state-level benchmark study, which was to serve as a foundation for Rapid’s decision. Brian Sara, Consultant at Business Sweden, was part of the team supporting Rapid.
“The company recognized that each region and state had its own advantages and disadvantages when it came to manufacturing costs and public incentives. Researching and comparing these options without experienced guidance, however, can present a challenge,” says Brian.
RAPID LEVERAGES BUSINESS SWEDEN’S INTERNAL EXPERTISE
Business Sweden’s team combined desktop research, analysis and interviews with stakeholders and experts to find out expected costs of establishing in Pennsylvania versus other states. From a cost perspective there were several factors taken into consideration including building operating costs, labour costs and conditions, proximity to suppliers, and public incentives on state and local level. The analysis pointed to North and South Carolina being far more beneficial than other states.
“We have worked with many Swedish companies doing this type of analysis. The main challenge is that every state only has an interest in providing information about their state, and has an incentive to ‘sell’ their state. Companies need a broader view. This type of project really highlights the value of analysis as well as the growing importance of southern states when it comes to manufacturing. There are many good reasons why the southern states are very well suited for manufacturing, including costs as well as more aggressive incentives for businesses,” says Phillip Thompson, Project Manager at Business Sweden, also part of the team assisting Rapid.
The project ran smoothly from Rapid’s perspective as well: “The team was very experienced and you could tell that they had worked on these kinds of projects before. Being able to use them as a resource to bounce off ideas throughout the project was incredibly valuable,” says Bengt Rimark, CEO and Global Sales and Marketing Director at Rapid.
STATE NEGOTIATIONS BENEFIT RAPID’S SET-UP
The analysis provided Rapid with insights about the opportunities available. “We were not aware of to what extent our company could get support from the state, and this was something that was clearly presented in the analysis. We were given hands-on information about how to deal with the state and how you can negotiate,” says Bengt.
Rapid used the analysis in negotiations with three states and ended up choosing a location in Pennsylvania. In addition to the value in terms of savings as a result from the negotiations, the analysis has given Rapid confidence in their decision.
“Taking this kind of decisions is not a race; this is the base of the company for at least 10 years onward. Working with Business Sweden enabled us to present a solution faster than we otherwise could have and also to have an objective foundation based on the criteria that are important for us. Knowing that we have taken an objectively good decision is very valuable for us, and we can justify the decision to the board, which is very important,” says Bengt.
The collaboration has also been appreciated by the Business Sweden team. “Our whole team enjoyed working with Rapid. Not only were they a great partner in our research process, but they also understood the impact of this analysis on the future of their business. We're excited to see Rapid continue to grow here,” says Brian.