Please ensure Javascript is enabled for purposes of website accessibility
Upcoming Event

Best Places to Work in Virginia

Hamburger Menu Hamburger Menu

byline: Joan Tupponce

Beach voters are not on board with light rail

Virginia Beach won’t be served by a light-rail transit system anytime soon. A referendum to extend The Tide, Norfolk’s rail system, 3.2 miles to Town Center in Virginia Beach was voted down in November. Although the referendum was not binding, Virginia Beach City Council promised to follow the voters’ will.

The proposal was opposed by No Light Rail in Virginia Beach, a group formed by Virginia Beach Treasurer John T. Atkinson.

“Norfolk spent $56 million for their portion of the light rail in 2011, and now they have a $9 million a year deficit. For a population of about 250,000 that works out to $38 for every man, woman and child in Norfolk to keep the light rail running. And, ridership in Norfolk is down,” Atkinson says. “Light rail doesn’t offer a valued service to citizens in Virginia Beach.”

Adding light rail in Virginia Beach will not eliminate traffic congestion, but “it will give us a bigger tax bill,” Atkinson says, noting that City Council passed a budget in 2015 that included a tax for light rail. “We have a special tax on the real estate tax bill amounting to $45 per $250,000 of assessed value for light rail even though we have never driven the first nail in the ground.”

This isn’t the first time light rail was put to a vote in Virginia Beach. Plans to build a rail transit were voted down in a 1999 referendum. A 2012 referendum to study the idea was approved.

Virginia Beach Mayor Will Sessoms believes the cost of the $243 million extension — of which the city would be responsible for $88 million — scared people. The first estimates were as high as $326 million. “That’s what the opposition took and ran with, and they did a good job,” he says.

He saw the rail extension as a “vision for connectivity.”

“In Virginia Beach, we have strategic growth areas that are planned, and it would be more successful with light rail,” Sessoms says. “A multimodal system is needed for us to be successful 20 years from now.”

The city may now look at other rapid transit options such as express buses. “We still have a lot of options,” Sessoms says. “I am optimistic we will come up with a solution. The question is: When and also how we will pay for it?”

Airport begins service to Charlotte and Orlando

Shenandoah Valley travelers now can fly directly to Charlotte, N.C., and then on to Orlando, Fla.

Shenandoah Valley Airport near Weyers Cave might be the smallest of Virginia’s nine commercial airports in terms of traffic — about 20,000 passengers a year — but the new arrangement with Maitland, Fla.-based ViaAir connects travelers with more than 700 flights.

“This is the first time the Shenandoah Valley has had a partner airline offering daily commercial flights with a jet aircraft,” says Greg Campbell, the airport’s executive director. ViaAir will use a 50-seat Embraer ERJ 145 regional jet in flying to Charlotte and Orlando.

The new airline service has been well received, Campbell says. “We’ve had a lot of positive feedback and interest,” he adds. “Orlando is one of the top markets for our area. It was previously served by a seasonal airline and did well.”

The airport added ViaAir service to Charlotte on Nov. 30 and to Orlando/Sanford, Fla., on Dec. 11. Travelers flying to Orlando will have a stop in Charlotte before continuing on the same plane to Orlando. The flights replace the airport’s former air carrier, Silver Airways, which offered daily turbo-prop service to Washington Dulles International Airport. “That airline suffered from some operational issues,” Campbell says. “Reliability is important in a small market, and we were having some issues there.”

Introductory fares to Charlotte start at $44 each way. Orlando fares start at $99 each way. Fares  include one piece of checked luggage of up to 30 pounds.

“Charlotte is a six-month promotional fare, and Orlando is a 90-day promotional fare,” Campbell says. “We think fares will remain close to that after the introductory period. We think they will remain competitive.”

ViaAir, which boasts a 98 percent on-time performance record, will operate 12 weekly departures/arrivals to Charlotte. The Charlotte hub has approximately 710 daily departures serving 155 nonstop destinations.

The Shenandoah Valley Airport averages about 70 to 80 takeoffs and landings a day on its 6,000-foot runway. “Five to six of those a day are commercial airlines. The rest are general aviation, primarily corporate,” Campbell says.

Spok aids communications in critical situations

Doctors, emergency personnel and first responders are just some of the people that rely on Spok Inc. to make sure communications run smoothly when lives are at stake. “We help enhance the way people communicate in critical situations,” says Vincent Kelly, company president and CEO.

The Springfield-based company provides telecommunications and software for fields ranging from 911 call management to hospital workflow.

In addition to health care, the company provides services to government, public safety and industry. Last year, the company helped VCU Health’s event staff manage race-related messaging during the UCI Road World Cycling Championships in Richmond.

Spok was founded in Virginia in 1965 as Advanced Communications Inc., a two-way radio shop providing paging services to mid-Atlantic companies.

After several mergers and acquisitions, it was rebranded as Spok in 2014, with the merger of wireless communication and software provider USA Mobility and Amcom Software. The new name, Spok, was picked to evoke the spokes of a wheel, “each supporting the other and the overall network,” Kelly says.

About 60 of the company’s approximately 600 employees work at its Springfield headquarters. The rest are spread among its U.S. offices in Minneapolis; New York; Plano, Texas; Jacksonville, Fla.; and Bedford, N.H., and its international offices in Singapore, Dubai, London and Perth, Australia. “Most of our business is in the U.S.,” Kelly says. “We are mainly focused on English-speaking areas.”

In 2015, the company posted $189.6 million in revenue. Currently, health care represents 70 percent of its customer base while 8.3 percent of its clients are in government, 7.5 percent in large enterprises and 14.2 percent in other industries such as hospitality. Customers include Johns Hopkins University,

Stanford School of Medicine, Duke University, University of Virginia, University of Texas’ MD Anderson Cancer Center, NASA, Marriott and Amazon.

“All 31 hospitals on the 2016-2017 US News & World Report Best Hospitals list honor roll are Spok customers,” Kelly says.

The company also is the largest paging company in the U.S. “Pagers are still used in health care and emergency services,” Kelly says. “When there is a major storm, mobile devices often don’t work, but you can send messages to pagers, and it can get through. Pages worked in Hurricane Sandy.”
Virginia is a good place for Spok, Kelly says. “It’s easy for me to recruit talent in this market.”

Gift is designed to boost the quality of child care

A $1 million gift from a Chatham couple aims to improve the quality of child care in Southern and Southwest Virginia.

The gift from Ben and Betty Davenport will establish the Davenport Institute for Early Childhood Development. It will partner with four of Virginia’s community colleges — Danville, Patrick Henry, Virginia Western and New River — in improving the education of child-care workers.

The Davenports are known for their philanthropy and interest in education. Ben, the chairman of Davenport Energy and First Piedmont Corp. in Chatham, is director emeritus of the Virginia Early Childhood Foundation and a former rector of the Virginia Tech board of visitors. Betty has served on the board of Smart Beginnings Danville/Pittsylvania, a Virginia Early Childhood Foundation program focused on improving children’s health and school readiness.

Under the Davenport Institute arrangement, the community colleges will work closely with support organizations such as Smart Beginnings and Virginia Quality, the commonwealth’s voluntary quality rating and improvement system. 

“Virginia doesn’t have any requirements to get into the field of early childhood education,” says Megan Healy, assistant vice chancellor for academics and partnerships at the Virginia Community College System. “The field has a low-paying workforce, and people don’t move up in early childhood education.”

In addition to training, the institute will offer coaching, professional development opportunities and a fellows program that provides selected students — many on the center-director level — with financial incentives, service opportunities and leadership experiences. “We want them to be regular and local advocates of the program,” Healy says. “Our first set of fellows should finish their program in 2018.”

The institute will begin in January. Students who complete 16 required credit courses in a year will receive a career-studies certificate. Fellows must complete a two-year program to receive associate degrees.

Part of the Davenport gift will be used for outreach for faith-based and home-based child-care centers, many of which are not registered with the commonwealth’s social services agency. “We want to use the community college system to provide better professional development and education opportunities for those providers as well,” Healy says.

Goodyear contests $1 million in fines in deaths

The Goodyear Tire and Rubber Co.’s Danville plant is contesting more than $1 million in state penalties after four work-related deaths since August 2015.

“We have never had one company have four fatalities in a 12-month period,” says Jennifer Rose, safety director for the Virginia Occupational Safety and Health program (VOSH). “It’s not something that happens every day.”

The 50-acre Danville plant, which makes aviation and specialty tires, employs about 1,200 workers.

After performing safety and health inspections, VOSH cited the plant for four willful, 115 serious and three other-than-serious violations along with $1.01 million in penalties.

On the same day, VOSH also cited the company for two willful and two serious violations along with $152,600 in penalties in connection with the April 12 death of employee Charles “Greg” Cooper. His body was found in a six-foot pit/sump containing boiling water and oil.

VOSH also issued one serious violation and a $7,000 penalty in response to an April 25, 2016 nonfatal accident.

“We had issued two previous fines for the first two fatalities,” Rose says. Those were for violations connected to the Aug. 31, 2015, death of Jeanie Strader and the March 31, 2016, death of Kevin Waid Edmonds.

Goodyear has contested all of the violations and penalties. Employers have 15 days after a citation is issued to challenge the citations or correct them. “What Goodyear is saying by contesting them is that they don’t agree in being cited,” says Rose.

When violations are contested, employers are not required to make corrections until the case is either settled or tried in court. “We try to work with the company to reach an agreeable settlement and if that can’t be done, the cases get litigated,” Rose says. “If it’s litigated, the citations surrounding it have to be corrected.”

Some of the more serious violations concern safety requirements in the service and repair of dangerous machinery. William Christopher Scheier, the plant’s fourth fatality, was killed Aug. 12 while performing maintenance on a machine. An investigation into his death is continuing.

Ohio-based Goodyear isn’t commenting on the cases but released a statement saying it is following a standard process in responding to citations.

The company added that it is “committed to the health and safety of all its associates. We will work with VOSH and the United Steel Workers to implement any necessary additional corrective actions to our Danville plant, beyond those we have already identified ourselves and are addressing.”

Daleville shared-services center takes shape

Botetourt County Administrator Gary Larrowe spent part of October overseeing the placement of cubicles in a new shared-services center in Daleville for the Virginia Community College System (VCCS).

VCCS will consolidate many administrative services — ranging from procurement to human resources — previously handled at each of the commonwealth’s 23 community colleges.

VCCS announced in March that it had signed a lease for a Daleville building. The shared-services center opened in July with one employee and now has about 20. It is expected to have 64 employees by next summer and 190 by January 2019.

“These are state jobs with good benefits,” Larrowe says. “There is technology associated with the jobs, so the wages are a little higher. It could end up resulting in a much larger operation.”

The Botetourt County Board of Supervisors agreed to pay for 117 cubicle workstations at the center. In fulfilling that obligation, Larrowe learned from Nancy Rodrigues, Virginia’s secretary of administration, that surplus office cubicles and furniture at Fort Monroe were being sold through the state Department of General Services. “The cubicles were unbelievable quality,” Larrowe says.

He originally expected the county to spend about $160,000 on the workstations, but, by buying surplus cubicles from Fort Monroe, he was able to save $60,000 to $70,000. “It was much cheaper than I anticipated,” he says. “The cubicles only cost $50 a piece, but we had to have them moved in, put back together and reconfigured.”

VCCS signed a performance agreement with the county stating that it would have all of its jobs in place in 36 months. If it falls short, it will have to pay the county $500 for each job below 171. “I have every reason to believe they will fulfill the jobs” requirement, Larrowe says.

The building housing the center previously was a call center for nTelos, a wireless telephone company recently acquired by Shentel. “The building is a beautiful, high-end facility that matches up with the community college system,” Larrowe says. “It already had data running into the building. That was an added value for them.” 

The building was selected from eight possible sites around the commonwealth considered for the center.

The center’s development comes at a time when Botetourt is on a growth spurt. “We’ve added about 800 new jobs this year in Botetourt,” Larrowe says. “We have good wages, a good school system and we have good places to live. All of these were factors for the community college system.”

Study shows effect of copper-infused products

Norfolk-based EOS Surfaces LLC and Richmond-based Cupron Inc. are the focus of the world’s largest clinical trial on the effectiveness of copper against hospital-acquired infections.

The study, published in the Sept. 28 issue of American Journal of Infection Control and presented at the Infectious Diseases Society of America conference on Oct. 27, shows that the copper-infused hard surfaces and linens made by the Virginia companies contributed to an 83 percent reduction in C-difficile and a 78 percent overall reduction in a host of multidrug-resistant organisms. 

C-difficile, one of the primary pathogens in hospitals, is difficult to treat successfully. “We knew we had some effect on it, but we had no idea of the effect in a real-world setting,” Ken Trinder, the chief executive officer of EOS, says of the study results. “All of the numbers were incredible.” 

Products from Cupron and EOS were used in the 10-month clinical trial at Sentara Leigh Hospital in Norfolk. Conducted in 2013-14, the study took place while Sentara Leigh was rebuilding its two towers. It compared acute-care hospital rooms from the original hospital tower with similar rooms in the new tower. The rooms in the new tower were outfitted with the copper-infused linens along with copper-infused, custom-made countertops, bathroom sinks, bedside tables and bedrails.

“We thought any type of reduction would be very meaningful,” Trinder says. “There would still be a lot of lives that were impacted positively.”

Cupron had developed the core copper technology and was imbedding it in linens when the two companies started working together in 2010. “We began the conversation to figure out a way to chemically and practically put that technology into hard plastics, not knowing if it could be done and if it had efficacy,” says Trinder, who founded EOS in 2006.

A year later, EOS started getting bacteria kill rates on its hard-surface prototype. “They were stratospheric,” Trinder says. “It was killing bacteria. I was surprised at the efficacy.”

EOS’ product is the only synthetic hard surface registered by the Environmental Protection Agency as a bacterial sanitizer proved to kill 99.9 percent of bacteria within two hours of contact. The company had to go through a “severe testing protocol,” submitting 14,000 samples to the EPA for testing to validate its efficacy claims. “After that, we had that notch in our belt,” Trinder says.

EOS’ copper-infused products now are used in about 20 types of facilities, including Bon Secours Mary Immaculate Hospital in Newport News and the intensive-care unit at Wake Forest Baptist Health in Winston-Salem, N.C., as well as several Veterans Administration hospitals. The company is currently outfitting the entire Central Texas Veterans Health Care System in preparation for a three- to five-year study.

Trinder believes the clinical data generated by the studies “will accelerate our sales and bring us better credibility in the clinical world.”

Exceptions in a buyer’s market

This year has been a buyer’s market for commercial insurance, with competition among insurers helping to keep most rates down. Nonetheless, two types of coverage — auto and cyber — saw rate increases in 2016, a pattern that may continue next year.

“We see auto coverage pushing upward in 2017 as well,” says Hutch Mauck, president of Lynchburg-based Scott Insurance.

An increase in auto insurance rates stems from higher vehicle repair costs and the “continued litigious legal environment we live in,” he says. “Plus, there has been extremely low auto insurance pricing over the last 10 years, and this is sort of a rebound effect.”

Cyber coverage continues to be an emerging product in commercial insurance. This year “has been precedent setting in terms of claims” because of cyberattacks, says Eddie Smith, executive vice president in Roanoke for Rutherfoord, a Marsh & McLennan Agency LLC Company. “It’s been the year of cyber extortion where a hacker locks up your computer. In order to gain access, you have to wire funds.”

In a typical ransomware attack, a hacker encrypts a victim’s digital content and holds it hostage until a ransom is paid.  These attacks grew by 35 percent last year, according to Symantec’s Internet Security Threat Report.

Cyber rates rose in part because insurance companies are paying more in losses. “Most brokers expect a rate trend increase in 2017 because of higher losses,” says David Schaefer, president and CEO of AHT Insurance in Leesburg.

Not me attitude
Even though cyber coverage is readily available — close to 70 carriers are offering cyber insurance — many businesses are not buying it. “Much of that is because people think, ‘It’s not going to happen to me,’ ” says Paul Fleming, senior vice president for Henrico County-based Bankers Insurance.

“It reminds me of 10 to 15 years ago and employment-practices coverage,” he says. “Very few people would purchase that. People thought it wasn’t going to happen to them. But now many more businesses are purchasing that coverage. We don’t know if we will go through that with cyber.”

Small businesses often underestimate their risk level. The National Cyber Security Alliance says 82 percent of small-business owners believe they are not likely targets for attacks. But last year 43 percent of all cyberattacks were aimed at small businesses.

Suffering a cyberattack can be crippling for a small business. Notification requirements for a cyber loss can be very confusing. “Forty-eight states have different laws and regulations about how you have to notify people,” Fleming says, noting the process can be especially problematic for a company doing business in several states. “If you are with the right cyber insurance company, they handle all of that for you.”

Business owners should purchase policies that “fit their businesses and their operations,” says Fleming. They also need to consider the information they collect, how it is stored and how it is protected. “If nothing else, you are safeguarding your employees’ information at a bare minimum.”

Cybersecurity is the “subject of the day, and it continues to be a new frontier,” says Smith. “The folks that are doing this [hacking] are very sophisticated. Some of their target industries are health care, retail and hospitality.”

Drone coverage
Another type of coverage that is gaining traction is drone insurance, including liability and property coverage for drone owners and coverage for commercial use.

“The insurance solutions available today are much better than last year at this time. There is a lot of development that has allowed the drone market to mature,” says Schaefer, noting that the biggest concern is liability coverage.

“There are a number of programs available for that exposure. There is more competition and more thoughtfulness, plus the rules are getting easier to understand.”

More companies today also are taking advantage of options such as captive insurance and other alternative-risk financing solutions. Both are structures for self-insurance, which is becoming more popular. “We think they will continue to be more prevalent and gain market share,” says Mauck.

In the past, captive insurance and alternative-risk financing plans were used mostly by large companies, but today many of these programs are available to small and midsize businesses. “That trend will continue,” says Mauck. “Both have the potential to save companies money. We will continue to see more captive and alternative options on the employee benefits side of insurance.”

Another soft market?
Looking ahead, industry professionals believe that the overall insurance market next year will be a continuation of 2016’s soft market. “It will be another good year for purchasers of property and casualty products,” says Smith. “We are expecting the market to continue to be a buyer’s market in 2017. There is ample capacity and good competition among carriers.”

In 2016, companies considered very-good risks saw their rates decrease, while average-risk companies experienced a slight increase in rates — an average of 2.2 percent. “That’s a continuing trend from 2015,” says Fleming.
Competition among insurance carriers continues to be intense. “Insurance companies rely on underwriting and investment returns,” says Schaefer. “Carriers are now under some pressure as it relates to their investment returns. Underwriters that don’t have the business are providing compelling options.”

Carriers compete on “all fronts — underwriting, product design, limits, claims management, loss control, price, customer service, financial strength and overall value proposition — to renew current accounts and secure new business,” says Thomas K. Smith, chief marketing officer for national accounts at Richmond-based specialty insurer Markel Corp.

The lack of major catastrophic events for the past two years in the U.S. has been a factor in this year’s soft market. Hurricane Matthew’s path of destruction along the Southeast coast didn’t occur until the fourth quarter. The hurricane did not affect rates this year, but next year may be a different story.

“In 2017, it will have an impact and possibly cause higher insurance pricing for property insurance on the coast [east of I-95] particularly for flood coverage related to coastal property insurance,” says Mauck.

 

Insurance brokers

 
Insurance broker
Location
Phone
Website
Top executive
Agents in Va.
Va. revenues ($000)2
1 BB&T Insurance Services Richmond (804) 359-0044 bbandt.com Walter P. Smith 128 87,776
2 Rutherfoord, A Marsh & McLennan Agency LLC Company Roanoke (540) 982-3511 mma-midatlantic.com Thomas R. Brown;
John C. Stanchina;
Kim Enochs		 281 61,103
3 Scott Insurance Lynchburg (434) 832-2100 scottins.com R. Hutcheson Mauck Jr. 170 50,000
4 USI Insurance Services Falls Church (703) 698-0788 usi.biz John Micale 35 36,000
5 Bankers Insurance LLC Glen Allen (804) 497-3634 bankersinsurance.net P. Marshall Fleming 42 32,000
6 AHT Insurance Leesburg (703) 777-2341 ahtins.com David Schaefer 77 17,786
7 Aon Risk Services of Virginia Richmond (804) 560-2230 aon.com Larry J. Loving 15 13,000
8 Tabb, Brockenbrough & Ragland Richmond (804) 355-7984 tbrinsurance.com Brian McCullough;
Steve Deal		 8 5,288
9 Chas. Lunsford Sons & Associates Roanoke (540) 982-0200 chaslunsford.com Roy E. Bucher Jr. 20 3,500
10 Willis Towers Watson (VA) Richmond (804) 747-0200 willistowerswatson.com HB Whitmore 514 WND
1 As of Jan. 1, 2016    2 For 2015                WND: Would not disclose                Note: List originally appeared in the March 2016 edition.            Source:  Individual firms.

‘Precipice of change’

Donna Harris believes entrepreneurs represent the heart, soul and lifeblood of any economy.

Harris, a veteran entrepreneur, co-founded (with Evan Burfield) 1776, a Washington, D.C.-based global incubator and seed fund, which last year opened a campus in Arlington. In late November, she announced that she is stepping down at the end of January as co-CEO of the incubator but will remain an investor and board member. Burfield will become sole CEO.

Harris, a Falls Church resident, describes herself as a “very passionate entrepreneur that wants every city to be a city where entrepreneurs can succeed … I believe in the power of entrepreneurs to change the world.”

Since its inception in 2013, 1776 has helped support more than 800 startups worldwide, raising more than $330 million in capital and creating more than 2,000 jobs. It is currently working with approximately 600 startups.

“1776 has been a vital partner in our business community since its arrival in Crystal City,” says Victor Hoskins, director of Arlington Economic Development. “Some of Arlington’s most innovative technology companies are part of or got their start with 1776.” The companies include Shift, an online car marketplace, and Notarize, an on-demand electronic notary service.

In addition to Washington and Arlington, 1776 has sites in San Francisco, New York and — most recently — Dubai. It is the first international technology incubator to have a presence in the Middle East-North Africa region.

Harris and Burfield picked 1776 for the incubator’s name because it reflects the dramatic changes that were going on during the year that the Declaration of Independence was adopted. “Today we are on a similar precipice of change globally,” Harris says. “We are bringing together entrepreneurs, corporations and governments who recognize the impact of the digital era.”

Harris traces her entrepreneurial career back to the third grade in Lake Orion, Mich. She and a friend collected worms and sold them for use as bait or to improve soil in gardens.

“That was ironic because we picked them up out of our garden and then went door to door. We sold them all,” Harris says, noting that she also once organized a circus in her garage and sold tickets. “I would create something and commercialize it. It’s so much of what I did.”

Her life has been defined by a series of opportunities. While she was studying finance and accounting at Central Michigan University, she was interviewed for what she thought was a finance job at Electronic Data Systems. Her college counselor, however, put her name on the interview list for systems engineering by mistake.

Harris, nonetheless, landed the job. (She later earned an MBA with distinction from the University of Michigan’s Ross School of Business.) “People chuckle when I tell them sometimes life will take you where it’s going to take you. You have a plan, but then something happens in a way you could never have planned for,” she says.

She started her first business, CC Corp., in 1998 in Detroit. The company provided consulting and online training on enterprise software such as Oracle. She sold the company after it hit $1 million in revenue in less than a year.

Her next venture was Kinderstreet, which sold software for the education, sports and recreation markets. By the time it was acquired by Arc Capital Development in 2005, it was working with more than 900 schools in 41 states.

Before the launch of 1776, Harris was managing director of the Startup America Partnership, a White House initiative designed to promote entrepreneurship throughout the nation. “My role was to focus on making it a reality that cities outside of Silicon Valley could become areas where entrepreneurs could thrive,” she says.

Today her scope at 1776 is global.  Harris says the incubator’s Washington location gives it visibility. “Our innovators at 1776 are tackling issues the government cares about,” Harris says. “We want to get leaders like President Obama to better understand what’s happening in entrepreneurship globally. They bring a very large spotlight, and there’s no substitute for good publicity.”

Each year the incubator hosts a competition, the Challenge Cup, which connects promising new startups with investors and mentors. Next year’s Challenge Cup Global Finals will be held in June in Washington, where entrepreneurs will compete for more than $1 million in prizes.

Harris’ other role is being a mother to her 6-year-old son, Chase. “I think balance is always a challenge,” she says of juggling motherhood with her career. “I want to be the best for my son and my family, and I want to be the best for the work I do.”

Harris recognizes there are a small percentage of women in her field. “There aren’t that many women … in entrepreneurships and venture capital, but it’s also a challenge across technology … We have to hold ourselves accountable to do better,” she says.

“Donna is a terrific entrepreneur,” says Penny Lee, chair of K Street Capital, an angel investment group in Washington. “She is someone who executes with precision and is creative in her thought approach. She’s constantly pushing the envelope.”

Editor's note: This story has been updated to reflect Harris' late November announcement that she will step down as co-CEO at the end of January.

 

Manufacturing hub slated for Danville area

A maker of high-performance cutting tools is setting up a manufacturing hub in Danville.

Kyocera SGS Precision Tool Inc. will spend $9.5 million to open a facility in Cyber Park, which is owned by the Danville-Pittsylvania County Regional Industrial Facility Authority. The project, called Kyocera SGS Tech Hub LLC, is expected to eventually create 35 jobs.

Jason Wells, the company’s chief technical officer, likes the workforce opportunities he has found in the Danville area.

“Community leaders are doing tremendous things to reinvent Danville,” he says. “It put a world-class training program in place to produce young people with a high level of skills in machinery and manufacturing. It’s difficult to find good, high quality, well-trained people.”

The company’s roots go back to Ohio-based SGS Tool Co., a family-owned company founded in the mid-1940s that makes solid carbide rotary cutting tools. The company became Kyo­­­­­­­­cera SGS Precision Tools when it was acquired by Japan-based Kyocera Corp. in May.

Before it was acquired, SGS Tool was exploring the possibility of opening a technology hub that could produce and manage smaller custom-tailored projects. It had a similar business in Wokingham, England.

“We saw their success and knew we needed to transfer that to the U.S.,” Wells says. “We also saw tailored solutions as a growing market in our industry. It has grown to almost 40 percent of the cutting tool market.”

SGS Tool considered opening a new stand-alone company in Ohio, but it also looked at South Carolina and Virginia. “A lot of business was migrating to the Southeast,” Wells says. “One of our largest end-user customers, Rolls-Royce, moved to Prince George, and they shared why they chose Virginia.”

Kyocera SGS Tech Hub received a $200,000 grant from the Commonwealth’s Opportunity Fund as well as $350,000 in Tobacco Region Opportunity Funds. McAuliffe met with company officials during the 2015 Paris Air Show and a marketing mission this year in Europe.

The company will build a 30,000-square-foot facility, which it expects to complete by November 2017. In its first year of operation, the company plans to hire 10 to 12 employees. “By 2019, we should be up to about 35,” Wells says.

Danville officials believe the facility will attract other similar companies to the area. “We are confident in thinking this operation will bring additional skilled professionals and engineers to the Danville area, and that is big,” says Linwood Wright, who is an economic development consultant for the city.