Owens & Minor announces new customer service operation in downtown Richmond

Owens & Minor, a Fortune 500 health-care services company based in Hanover County and one of the region’s oldest employers, is expanding to downtown Richmond.

The company said it would make a multiyear, multimillion-dollar investment to establish a new client engagement center in 90,000 square feet at Riverfront Plaza.

Richmond competed against 60 other cities around the country, including Nashville, Tenn., and Salt Lake City, Utah, to win the project and the prize: the creation of 300 new jobs and the retention of 200 that would have left the region.

“Virginia has been the home of Owens & Minor for 135 years, and we are very pleased to expand our presence in Richmond with this new initiative. This project will support our plan to build the most efficient and intelligent route to market for health-care products and supplies,” Cody Phipps, the president and CEO of Owens & Minor, said in a statement. “The downtown Client Engagement Center will support standardization and enhanced service to our nationwide customers, who are asking for our assistance in adapting to a changing healthcare market.”

According to Phipps, the center will provide a scalable platform for future growth, as well as higher levels of service to customers. It will be a shared-services facility, where the company will co-locate teams that perform functions such as customer service, purchasing and financial operations.  Currently, employees who perform these functions are spread across the company’s 40-plus distribution centers all over the U.S. 

The search for the center, known as “Project Engage,” began in May 2016. That’s when Jason Hickey and Jason Rancadore of Hickey & Associates, a site selection firm with offices throughout the world, contacted the Greater Richmond Partnership, a regional economic development organization.

The partnership said Hickey described the project as a “high-touch customer service operation related to the health-care industry …” After working on the project, local officials said, it became clear that the company was Owens & Minor, a major firm in their own backyard.

During the site location process, the partnership encouraged project managers to evaluate the region with the same metrics and standards as competitor cities.

“It was important for the site selectors and company representatives to see Richmond with a fresh pair of eyes,” said Bethany Miller, vice president of business development at the partnership. “We encouraged them to tour the region and meet with companies, as they had with competitor locations, and to explore how the region has progressed. Looking at things from a new perspective really made a difference.”

Barry Matherly, president/CEO of the partnership, said that a program created four years ago to strengthen relationships with national site selection consultants also helped. “Over the last year, more than $80 million in capital investment and 500 jobs have been brought to us from consultants, proving that these valuable relationships are paying off,” he said.

During an announcement of the project Thursday with Gov. Terry McAuliffe, Richmond Mayor Levar Stoney welcomed Owen & Minor’s decision to expand at home. “Their decision is a testimony to their confidence in the quality of our local workforce and commitment to the region.”

Secretary of Commerce and Trade Todd Haymore noted that the state’s health-care industry employs nearly 400,000 people. “Owens & Minor is a valued employer that contributes to that growing number.’’

The company was founded in 1882 in Richmond and has been headquartered in the area ever since. The great-grandson of the company’s founder, G. Gilmer Minor, III, lives in Richmond and is chairman emeritus of the company. Owens & Minor has annual revenues of more than $9 billion and employs more than 8,000 people across the U.S., Europe, and in Asia.

Richmond’s Office of Community Wealth Building and Workforce Development worked with Owens & Minor to develop training programs for the new jobs.

The partnership also worked with the city’s economic development department and the Virginia Economic Development Partnership on the project.

McAuliffe approved a $1.5 million grant from the Commonwealth Opportunity Fund to assist the Owens & Minor, which is eligible to receive benefits from the Virginia Enterprise Zone Program. Funding and services to support the company’s employee training activities will be provided through the Virginia Jobs Investment Program.

David Wilkins, Trib Sutton and Matt Anderson of CBRE Richmond negotiated the lease for Riverfront Plaza’s landlord, Hertz Investment Group.

According to CBRE, Riverfront Plaza at 951 East Byrd St. is about 85 percent leased. The building has about 951,900 square feet in two 20-story towers.