Not just mining anymore

The year 2018 was a big one for the Virginia Coalfield Economic Development Authority.

“It really was, I guess, in a variety of ways,” says Executive Director Jonathan Belcher. “Of course, it was the 30th anniversary of the organization … but also we just had a tremendous amount of activity in 2018 in terms of both business development and marketing activities, but also in funding.”

VCEDA’s mission is to stimulate business growth in seven Virginia coalfield counties — Buchanan, Dickenson, Lee, Russell, Scott, Tazewell and Wise — and the city of Norton. During the past 30 years, VCEDA has attracted employers with $5.1 billion in sales that are directly responsible for more than 23,000 jobs, according to a report prepared by Richmond-based Chmura Economics and Analytics to mark the anniversary.

Chmura’s report says the regional economy would be diversifying even without the jobs VCEDA has attracted, but the economic development group has accelerated that trend. Without  VCEDA, the study estimates, the regional unemployment rate last year would have been more than 15 percent. The actual rate was 5 percent.

In 2018, VCEDA handled a record 41 new projects and expansions that generated or preserved more than 1,000 full- and part-time jobs. (The previous record was 23 projects in 2017.) Last year, Belcher says, those projects, and VCEDA funding, touched every community in the area.

“The region’s unemployment rate is now the lowest it has been in 11 years,” Belcher says. “To me, that’s pretty significant given the economic challenges we’ve had with the downturn in coal mining.”

Diversifying economy
Virginia coal-related employment rose 10 percent to 2,660 jobs in 2017, the most recent numbers available from the U.S. Energy Information Administration (EIA).

Preliminary nationwide numbers from the U.S. Bureau of Labor Statistics show an uptick last year to 53,900 mining jobs nationwide, but that’s one-third of the industry’s employment in 1985. Mining jobs have been declining since the 1920s, and Virginia today is a minor contributor to U.S. coal production. According to the EIA, Virginia’s active mines hold about 1 percent of the nation’s total of coal reserves and account for less than 2 percent of U.S. coal production.

While the Virginia Economic Development Partnership has designated the coalfields as Southwest Virginia’s e-region with “state-of-the-art broadband infrastructure [and] an outstanding labor force,” the area has been diversifying its economy by promoting tourism and marketing itself as fertile ground for internet-based businesses, high-tech manufacturing and homegrown innovation.

Three drone companies
To promote that innovation, VCEDA initiated a seed-capital grant program in 2017. “That program is really starting to show some tremendous success in helping to get small businesses started in the area,” Belcher says.

Among the businesses helped with grants last year were three businesses built on drone operations: Remote Agri Drone, Praise Aeronautics and Brad Deel Drone Photography and Videography.

“To our knowledge, those are the first three drone businesses to locate in our region,” Belcher says. “Each of them does slightly different things.” One works with crops and crop spraying, he says. Another focuses on photography. The third deals with infrastructure, handling assignments such as bridge inspections.

The range of businesses boosted by VCEDA grants is broad. In 2018, they included a farm-equipment dealership, a sports bar, a boutique and Breaks Interstate Park. VCEDA also supported IMPERFKT, a clothing brand and screen-printing design company. It was founded by a former model who came home to the region with a plan to create more than 200 jobs. VCEDA also backed The Bloom Farm, a commercial greenhouse.

A lot of information technology jobs have been created or are expected to come to the region. Wize Solutions, for example, is setting up in Abingdon. Its founders expect to hire 50 people by the end of the year and 150 or more long term (see related story on Page 38).

Science Applications International Corp. (SAIC) brought 40 jobs to Clintwood to work on the service desk for the Virginia Information Technologies Agency’s Customer Care Center. TDEC, a Maryland-based provider of business process outsourcing, created 24 jobs at its new data-entry services office in Lebanon.

Manufacturing jobs
Last year was a big year for manufacturing, too. Speyside Bourbon Cooperage, which already had a plant in Bath County, opened a stave mill in Washington County and a cooperage in Smyth County. The company, which makes oak barrels for aging bourbon, is expected to create 160 jobs.

AMR Pemco, a manufacturer of electrical distribution equipment, announced plans to add 75 jobs at its Bluefield factory, nearly doubling its current employment. AFL, a maker of fiber-optic cable and related accessories, plans to add 20 jobs at its Washington plant.

Industries with deep roots in the region also added jobs last year. Mountain Top Timber Products turned an empty 117,000-square-foot building in Dungannon into a chipmill and sawmill, operations that are expected to create 50 jobs. Last March, England Furniture announced plans to open an upholstered furniture factory in Lee County employing 79 people.

Even the shutdown of Bristol Compressors’ Washington County plant, with the loss of 468 jobs, failed to slow Southwest Virginia’s economy. More than 140 potential employers showed up at a pair of job fairs to interview laid-off workers. Unemployment in Washington County was at 3.7 percent when the closing was announced in July. By November, the rate was 2.9 percent.

Back in the coalfields, Belcher is looking forward to another strong year.

In January, typically a slow period for economic development, he already had fielded several inquiries and was working on more than 30 projects.

“We’re just hoping that momentum continues into 2019,” Belcher says.

Southwest Virginia’s recent deals

*Company has headquarters in another country                            
Sources: Virginia Economic Development Partnership, Coalfields Economic Development Authority