Executive Summary
The Northeast Ohio Trade and Economic Consortium (NEOTEC) is a partnership of Columbiana, Mahoning, Portage, Stark, Summit and Trumbull Counties, working together to stimulate regional economic development, improve market access and promote international commerce through the administration of Foreign Trade Zone 181. In January 2002, Ashtabula County was welcomed as the seventh county member of NEOTEC and the Joint Office of Economic Development (JOED). In January 2005 Medina and Wayne Counties were approved for membership as well as Richland County in December 2005. These new additions will further strengthen the ten-county organization as a regional force in economic development. An expansion application is in process to add locations in the new member counties.

The organization’s goals are to assist the economic development process throughout the region by focusing on mutually beneficial transportation, infrastructure, and other regional development tools. The member counties recognize that certain issues need to be addressed as a region, and certain opportunities can only be pursued by a region. The Foreign-Trade Zone 181 program is one such tool that by being coordinated on a regional basis has provided significant value to Northeast Ohio.

FTZ 181 currently has 9 activated General Purpose Operator/Users, and one activated subzone user during the report period. We experienced an increase in development activity during Fiscal Year 2005, further attesting to the renewed interest in the Foreign-Trade Zone program. The constant evolution and pervasiveness of the global economy is driving new interest in the Foreign-Trade Zone program.

Attached is a chart that demonstrates the growth of the FTZ 181 program over the past 5 years. In 2001, FTZ 181 had 9 companies under contract. In 2005 the actual number of companies has grown to 34 and projected to reach 40 by 2006. For the report period of 2005 the FTZ 181 program was a factor in generating over $18 million in capital investment, resulting in the creation and retention of 427 jobs in the region. Overall, exports are up 27% over the previous period - from $ 120 million in FY 2004 to over $152 million in FY 2005. Total product shipped was over $2.9 billion, up from $ 2 billion the previous year. This is attributed to a combination of growth of existing companies and newly activated operations.

Specific growth for companies was reported during the period as a result of the FTZ program:

“Being part of FTZ 181 has been a contributing factor to the growth of our company. With the cost saving advantages associated with operating in the zone, it has allowed us to remain competitive and gain market share in our industry.”
ASC Industries, Inc.

“Continuing on our strategy to embrace and utilize the benefits of the FTZ, we were able to increase our business volumes”
Detroit Diesel Corp.

“The designation of Pinney Dock, a Kinder Morgan Company, as a Foreign-Trade Zone is aggressively promoted by both local and national marketing professionals with several enterprises expressing interest in capitalizing on the many benefits offered by FTZ 181. Local challenges are inherent in any market but being a member of NEOTEC has provided Pinney Dock a definite synergistic advantage.”
Pinney Dock & Transport Co.
 

“We are in the process of developing a globalization plan that will include utilization of the Zone. This will allow us to do certain assembly operations here at VMI-Americas that have otherwise been done outside of the United States.”
VMI-Americas, Inc.
 

Foreign-trade Zone status has helped us retain the 276 full time jobs at the refinery in Canton Ohio.
Marathon Petroleum LLC

The consistent management of the zone program has been a key to the success of FTZ 181. In 2002, the county-wide Port Authorities were designated Zone Site Administrators, insuring continuity in marketing and management. Another important management tool has been the Annual Foreign-Trade Zone Workshop, with the first being held in November 2001 at Kent State University. The purpose of the workshop is to reinforce proper zone procedures for zone operators and users of FTZ 181, as well as educate the region on the value and importance of the program.

In terms of marketing the FTZ 181 program, NEOTEC deploys an integrated marketing strategy with the use of radio, print advertising, web-site and direct contact at trade shows and conferences. Radio announcements are aired monthly by the National Public Radio affiliate WKSU. NEOTEC produced 17 advertisements in 2005 that were placed in publications such as the Journal of Commerce, Business Facilities, Expansion Management, CLO, Logistics Today, and others. The ad placements were synchronized with conference and trade show activities. The web-site content is reviewed and updated monthly.

In 2005, NEOTEC sponsored memberships for each of the ten counties to join Team OHIO, a newly created state-wide marketing organization. Team OHIO members are considered the “field staff” for the Ohio Department of Development in marketing the state both domestically and internationally with the support of State grants.

NEOTEC was also responsible for creating the Ohio Foreign-Trade Zones Council (Ohio FTZ Council) in 2005. The purpose was to unite all ten Ohio FTZ Grantees to address legislative, educational and marketing issues.

NEOTEC continues to improve service to operators and users. The Northeast Ohio Logistics Network, an organization of logistics professionals administered by NEOTEC, has grown to over 270 members in 2005. One of the benefits or services to FTZ clients is the ability to reduce transportation or freight charges through collective purchasing, all coordinated by NEOTEC in partnership with the United Shippers Alliance. NEOTEC will launch a major logistics research project in 2006. The objective is to align regional economic development strategies with transportation/logistics infrastructure investment. The Foreign-Trade Zone 181 program is an integral component of this strategic planning process.

NEOTEC became the recipient of federal and state grants to establish an International Trade Assistance Center (ITAC) in 2004. The ITAC staff provides assistance to companies interested in developing international markets and customers, providing yet another valuable service to FTZ 181 operators and users. Plans are currently underway to expand the program with additional staffing, and other international trade resources.

10 companies were activated during this reporting period, with a total of 1650 regular employees, and 50 part-time and contract employees.

None of the FTZ 181 Sites or Parcels are subject to the Lapse Provision or Sunset Condition during this reporting period. Parcels and Sites are tracked by the Grantee per the attached “Sunset Condition Tracking Log”.

		2004		2005		Change
Received
	Domestic	1,745,618,447		2,880,858,845		+ 65%
	Foreign	413,658,429		419,439,382		+   1%
Total Received		2,159,276,826		3,300,298,227		+  52%
Shipped
	Domestic	1,938,514,873		2,788,569,082		+  43%
	Foreign	120,551,564		152,790,685		+  27%
Total Shipped		2,059,066,437		2,941,359,767		+  42%

 

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The Northeast Ohio Trade and Economic Consortium (NEOTEC) is a regional economic development partnership including Ashtabula, Columbiana, Mahoning, Medina, Portage, Richland, Stark, Summit, Trumbull and Wayne counties, built to improve market access through the development of the Northeast Ohio Logistics Network and to promote international commerce through the administration of Foreign Trade Zone 181.

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