Getting Canadian companies to expand into Whatcom County could be key factor for job growth

THE BELLINGHAM HERALDJuly 13, 2014 

Ryzex

Ryzex technician Patrick Donahue reprograms, evaluates and tests several data terminals during one of the first stages of refurbishing before they can be sold at the Ryzex Bellingham facility on Oct. 25, 2007. Ryzex moved here from Canada and eventually had up to 220 employees before it was sold to PEAK Technologies of Columbia, Md., in December 2011. The technician's name was corrected July 14, 2014.

THE BELLINGHAM HERALD

When it comes to job growth, Whatcom County's geography is both a help and a hindrance.

With the county wedged into the northwest corner of the contiguous United States, it costs more to ship from here to almost anywhere else in the country.

Businesses tend to make location decisions based on broad, strategic ideas, so if shipping is a problem, recruiting a company to move here from somewhere else in the U.S. is difficult to do, said Hart Hodges, director at Western Washington University's Center for Economic and Business Research.

He added that offers like tax incentives are usually low on a company's list when considering a move.

On the flip side, the county being situated near the international border offers an advantage for Canadian companies looking to expand into the U.S. market.

That's what Rud Browne discovered while living in the lower British Columbia mainland about 25 years ago. He founded Ryzex, a company that refurbished electronic equipment, in Canada in 1989. He moved the company to Bellingham to get into the U.S. market while still being near his family in Vancouver.

He and his family fell in love with Whatcom County and moved here, eventually building the company up to 220 employees before selling it to PEAK Technologies of Columbia, Md., in December 2011.

Now a Whatcom County Council member, Browne believes that experience could be replicated, if the county more aggressively showed B.C. companies how this area is a gateway to the U.S. market.

"One of the key things a business needs to do is leverage its strengths, and that is something Whatcom County should do," Browne said. "If Whatcom County was a business, I would devote more to marketing and sales."

Whatcom County has several success stories when it comes to luring jobs from British Columbia. Nature's Path, the cereal manufacturer in Blaine, is an expansion of a B.C. company. Cedarprime, a wood-processing facility, expanded from Canada into Sumas in 2003.

However, Browne said when he was looking at Whatcom County as a business opportunity, he didn't receive any help or contact from a local government. He admits that was partly his fault for not looking, but he wants the area to be more proactive than reactive.

That appears to be happening more now, said Jim Pettinger, president of International Market Access in Ferndale. His business has offered a variety of cross-border services to help with sales and distribution for more than 20 years.

In the past many Canadians thinking about entering the U.S. market would assume the first place south for a variety of resources was Seattle. That's starting to change, according to Pettinger, noting the Port of Bellingham being more active in trade shows in British Columbia and the local chambers organizing events like the Border Expo, held last month at the Silver Reef Hotel Casino Spa.

Canadian companies are expressing interest in Whatcom County at the trade shows, said Dodd Snodgrass, economic development specialist for the Port of Bellingham. One of the biggest drivers is land cost, which is much higher in the lower B.C. mainland.

Many interested B.C. company officials will ask why they should consider Whatcom County, and Snodgrass said they point out the proximity to the B.C. corporate headquarters as well as the number of resources available here, including accounting firms that are well-versed in the complex tax issues involved with Canadian companies that expand into the U.S. market.

As for how Canadian expansion into Whatcom County is working out, Snodgrass said one area of success is the manufacturing sector, which has been adding local jobs coming out of the recession. According to data from the Washington State Employment Security Department, Whatcom County has about 9,200 people employed in manufacturing, up 1,500 compared to four years ago.

"The track record is good for those who have come and stayed in Whatcom County," Snodgrass said.

Browne said it should be a two-way street when it comes to cross-border expansion, adding that B.C. is a great starting point for local companies interested in international sales.

"My focus is to have more regional trade between Whatcom County and British Columbia," he said, adding that it is a relatively easy process to expand a business to either sides of the border.

WHATCOM COUNTY'S TOP EMPLOYERS

Here is a list of the top 10 employers in Whatcom County at the end of 2013 and the number of full-time employees. The count is for permanent, full-time employees, except for The Markets LLC, which includes full- and part-time employees. Not all Whatcom County firms responded to the survey.

1. St. Joseph Hospital 2,672

2. Western Washington University 1,462

3. BP Cherry Point 886

4. City of Bellingham 814

5. Whatcom County 765

6. Haggen Inc. 735

7. Bellingham School District 731

8. Lummi Nation 710

9. The Markets LLC 676

10. Aramark 620

Source: Western Washington University's Center for Economic and Business Research

Reach Business Editor Dave Gallagher at 360-715-2269 or dave.gallagher@bellinghamherald.com. Read the Business Blog at bellinghamherald.com/business-blog or get updates on Twitter at @bhamheraldbiz.

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