Adding Value

A missed but viable entrepreneurial opportunity
Keith Twitchell

Every day, huge quantities of raw goods and materials come through the Port of New Orleans. Almost without exception, they are simply unloaded from one transit device and loaded onto another. Apart from roasting coffee beans, we do very little to add value to these products while they are here.This is vast, wasted economic and entrepreneurial opportunity.

“We’ve had this issue forever,” sighed Gregory Rusovich, CEO of Trans-Oceanic Development and longtime leader in the maritime industry. “There’s a real lack of capacity here to do value-added manufacturing.”

Rusovich cited the loss of much of the oil and gas sector in the early 1980s as the final nail in the value-added coffin.

“Losing the big companies led to the loss of the suppliers to those companies, which led to the loss of manufacturing,” he explained.

“It’s a really important and bedeviling question,” concurred Michael Hecht, president and CEO of the regional economic development agency Greater New Orleans Inc. “Historically, New Orleans has gotten its wealth from raw materials, like oil, seafood, cotton, even our culture. We didn’t have to do value-added manufacturing, while other cities had to develop manufacturing processes.”

Other factors compound the loss of industries.

“We don’t have enough population base,” Hecht said of the city and region. “Economically, you want to manufacture your final pieces and parts closer to consumers and other industries.”

Despite these obstacles, New Orleans also has innate advantages that keep the door open for manufacturing entrepreneurs, starting with the many raw goods continuing to flow through the port.

“It makes sense to do manufacturing closer to where the materials come in,” said David Kearney, president of the Kearney Companies, another maritime leader. “We have all the modes of transportation here and low energy costs. These are pretty important factors.”

Among the many items that come through the port, several leap out as particular opportunities, including:

• Rubber, which arrives largely from South America. “Why don’t we have a tire manufacturing facility?” asked Kearney. “That would create a lot of jobs.”

• Plastics and petrochemical products, which are produced just upriver but usually exported in raw form. “We could be manufacturing plastic products instead of just plastic,” Rusovich pointed out. “We can also use byproducts from the petrochemical plants to form resins and pellets for further manufacturing, adding value by creating additional uses.”

• Steel and other metals. “We should be making pipes and parts from all the raw metals that come through Port,” Kearney stated.

• Food processing. “We should be taking our agriculture and aquaculture, some of the finest in the country, and adding value to that,” suggested Hecht.

Many other opportunities exist; Hecht cited two where some initial progress is happening: edible oils, for which there is now a processing plant in Jefferson Parish; and biofuels, starting with a proposed renewable aviation fuel plant.

He also encouraged looking to the future of the energy sector.

“We should be going after new industries, like EV battery manufacturing, which uses materials that already come through here. We should be manufacturing windmill blades. We have to get ahead of the curve on these new energy technologies.”

Rusovich pointed to a related entrepreneurial opportunity.

“We should be building a white-collar base in the shipping industry, things like freight forwarding, shipping agents and brokers, customs management. They would get to know the local infrastructure, the transportation access, which would lead to more freight shipped through the Port of New Orleans.”

This, of course, would produce even more value-added manufacturing opportunities. And while there are other things that could be done to enhance these prospects, like specific state incentives for value-added manufacturing, the picture is already pretty bright for someone willing to step up.

Keith Twitchell spent 16 years running his own business before becoming president of the Committee for a Better New Orleans. He has observed, supported and participated in entrepreneurial ventures at the street, neighborhood, nonprofit, micro- and macro-business levels.