MISSION, RGV – Coming to fruition after nearly two years of development, the City of Mission says its latest “success story” is open and ready for business.
An initial $50,000 by the city’s Economic Development Corporation ended up turning into a $20 million return in investment after successfully attracting Royal Technologies Corporation to the region, according to leaders with the EDC.
Billing itself as an advanced engineering and manufacturing company, Hudsonville, MI-based Royal Technologies specializes in developing products for a number of diverse industries including automotive, office furniture and consumer goods.
The company is housed on 12 acres in the Mission Expressway Business Park inside a Class A, 325,000 square foot manufacturing facility and is set create at least 500 jobs. Because of its size, it is the sort of facility one expects to see in Reynosa, not the Rio Grande Valley. It is massive.
The city has been working with Royal for the last two years to bring them to the region, according to Mission EDC President Alex Meade.
“It took us about a year. They were one of the first companies we met with. We met with Hi-Tech (Plastics) first, and at the time they told us they were forming this little gentleman’s agreement with this company out of Michigan,” Meade said. “They needed to make some room in their current high tech plastics plant for some machines, they were asking if we could help with a $50,000 investment, which we did.”
“That $50,000 investment turned into a $20 million return on in investment because they saw the opportunity and ended up buying this property and building this,” Meade said.
Royal Technologies President Jim Vander Kolk announced in April 2013 that after much consideration looking at various sites across the nation, the company chose to expand its operations in Mission.
One year earlier, in April 2012, Mission EDC played a role in assuring that the newly formed alliance between Hi-Tech Plastics and Royal Technologies had a smooth transition. Hi-Tech Plastics is a custom mold company that has a plant just a block down the street from the new Royal plant. The alliance resulted in a significant capital investment and an increase of approximately 30 jobs. This alliance proved to be a great match and in early December 2012, Royal Technologies acquired Hi-Tech plastics with the intention of increasing their facility, employment, and production in Mission, Texas.
“He appreciates the community, and the workforce we have here in the Valley,” Meade says about Vander Kolk. “We have many companies that start off in phases, but he built the entire plant with hopes and belief that the workforce we have here is enough to get him to the right size and capacity. He hopes to have 350 to 400 employees.”
Royal Technologies has about 900 employees throughout the U.S, not including the 85 jobs that were included in the acquisition of Hi-Tech Plastics or the 100 new jobs that will be created later this year.
Close to 500 new jobs were created in Mission in 2013 and the City’s unemployment dropped to the lowest rate in five years, according to the latest statistics from Texas Workforce Commission.
Mission’s annual average unemployment rate sunk to 8.5 percent, the lowest since 2008, and November’s eight percent jobless rate was one the lowest single months for the City in the last five years. Mission’s unemployment rate bested both of the Valley’s metro areas and is third best in Hidalgo County just behind McAllen and Edinburg.
The unemployment rate for the Hidalgo County metro area (McAllen-Edinburg-Mission MSA) in December 2013 was 10.2 percent, and for Cameron County it was 9.5 percent.
Texas Secretary of State Nandita Berry recently visited the new Royal Technologies plant. She was given a tour by Vander Kolk and Meade.
“It’s absolutely outstanding. I think it’s a true example of a success story. It’s a true example of what makes Texas such a great state. It’s a true example of our message, which is Texas is wide open for business,” Berry told the Guardian.
“The facility is fabulous, but Jim’s (Vander Kolk) point is it’s the people who make the facility,” Berry said. “I think the story that we are able to tell with him about manufacturing in this region, the skilled workforce, are all highlights of Texas.”
In an exclusive interview with the Guardian, Vander Kolk said the State of Texas has a “winning formula” to attract and retain businesses. Asked what he talked about during Berry’s visit to the plant, Vander Kolk said:
“I wanted the Secretary of know that Texas has a message that works and this plant is living example of that. I want them to do more of that. I think the state has a winning formula that does work. Is it perfect? No, but that does not mean you do not keep trying to make it better.
“They have a winning attitude and a formula to help us achieve success. I just want to encourage them to do more of that. In today’s world there is too much noise in the system in government. This State has been able to take that noise out and move forward.”
Vander Kolk said luring a business is not simply about handing out tax abatements. “Once you build a building you have to pay for it. It is how people work together efficiently that helps pay for that building to help the business grow. The State stands ready to help us in any way to accelerate the competencies of the employees. That is the winning formula that will help make us successful.”
Vander Kolk started Royal Plastics 27 years ago. He changed the name to Royal Technologies eight years ago in order to avoid being pigeon-holed in the growing Asian market. His interest in having a manufacturing plant in South Texas came about because he has a lot of customers in the region. He said he looked at Brownsville, San Antonio and Reynosa before settling on Mission.
“This facility will enhance our ability. Our customers are spread throughout North America. We will be able to service them better.” Asked why he did not open a plant in Reynosa, where labor costs are much cheaper, Vander Kolk said: “I believe in America. I believe we can close the gap of the labor disparity. We do not have to work longer. We just have to be smarter. I feel that with everything that this region has to offer, it was a wise decision to put a facility here. I made this decision a year ago and I have never looked back.”
A key decision in moving to South Texas was the character of the workers, Vander Kolk stressed. “When I met with Hi-Tech, it did not take me long to realize they had people who were strong in character and had capabilities that I was interested in. So, I decided to start working with them and within a few months purchased them. I told the former owner, Doug Bennett, who was 65, if I ever see a ‘For Sale’ sign in your yard and you did not tell me about it I would feel bad. He approached a short time later and we closed within a matter of months. I have a lot of respect for Doug Bennett and what he has established. His legacy continues.”
Vander Kolk said he expects to begin manufacturing at the new plant in Mission in the third week of February. Some of the walls in the building have to have open ventilation because the machines make the facility very hot. “We turn air over every 18 minutes,” Vander Kolk, explained. “I have built seven plants, with 1.2 million square feet of manufacturing and 100,000 square feet of engineering. We continue to learn how to make it better. We are excited. We have taken the employees to give them a little preview of the facility. They are excited, we are excited.”
Secretary of State Berry told the Guardian how impressed she was with a key point in Vander Kolk’s approach – putting the workers first. The manufacturer was asked to explain his philosophy.
“This is not about making Royal Technologies big. It is not what we do it is how we do it. We will make parts every day, we will ship product every day. It is about competency and character. My responsibility is to grow people. If I grow people my company will grow. My parents taught me that. It is probably the biggest gift they ever gave me.”
As a result of that philosophy, turnover of staff at Royal has historically been very low. Vander Kolk believes this will continue in Mission. “I very much respect the character of the people of this region. I have no questions about whether we will be successful.”