Manufacturing in Delaware has evolved from its mill origins. Here's why the industry is a 21st-century economic driver - Technical.ly Delaware

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Mar. 31, 2021 2:52 pm

Manufacturing in Delaware has evolved from its mill origins. Here’s why the industry is a 21st-century economic driver

Today, the state is known for shipping healthcare, life sciences and biotech products — and employing tens of thousands. Here's a look at that evolution to STEM innovation.
Manufacturing in Delaware.

Manufacturing in Delaware.

(Photo credit clockwise from top-left: courtesy; courtesy; Holly Quinn; BASF via Creative Commons license)

Modern manufacturing in Delaware goes back to 1687, when the first flour mill was opened on the Brandywine by a Swedish colonist named Tyman Stidham.

Since then, it has been one of the state’s most impactful industries, and one of the things Delaware is known for — not only because of these roots, but because of the state’s increasingly important central location on the East Coast, and the high-tech local talent pool.

For instance: E. I. du Pont de Nemours and Company, aka DuPont, is best known for the inventions of nylon, Lycra, Teflon and Kevlar, and is currently focused on components for smartphones, autonomous cars and smart city technology. The company was born in 1802 as a gunpowder works on a site now known as the Hagley Museum and Library. And every road or development with “Powder Mill” or “Paper Mill” in its name references a real manufacturing mill from the past — sometimes, like in Yorklyn, with old mill ruins to explore.

Today, manufacturing is the state’s second-largest traded sector after agriculture, boasting 44,000 jobs with an average salary of $60,000. Here’s how it got there.

Location, location, location

“I think our location has always been an asset, because we’re in a key spot and we had things like the Brandywine water power and other resources, so it’s a long history that has certainly evolved,” said Kurt Foreman, president and CEO of Delaware Prosperity Partnership (DPP), told Technical.ly. “Manufacturing today is a much more diverse portfolio of things, including manufacturing products in the healthcare, life sciences and biotech arenas, to chemicals to other things.”

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Those other things rage from companies like New Castle-based Halosil, which makes a fogger that can be used to disinfect classrooms and buses, to Just Food For Dogs, also in New Castle, which makes high-quality pet food, to the chicken producers in Kent and Sussex counties.

Of course, there are also big companies — and employers — like GoreSolenis and Astra Zeneca.

In our Manufacturing in Delaware series, Technical.ly has explored some of the hidden gems of the Delaware manufacturing industry. That’s included Allied Precision Contract Manufacturing, based in Middletown; Adesis, a contract manufacturing company in New Castle; and Applied Control Engineering (ACE), a Newark-based company that specializes in process control and systems integration.

They each cite their location in the First State as being essential to their success.

"You go down 896 to Corporate Boulevard, we have a lot of customers in that office park in warehouses that you wouldn’t think there was a major manufacturer, but they’re manufacturing."
Ian Burns, Applied Control Engineering

“Having access to the headquarters, the scientists and the R&D facilities that go along with [the proximity to companies like DuPont and Chemours] has certainly helped us,” said Ian Burns, president and one of six principle owners of ACE. “It’s also mom-and-pop-type shops where you go down 896 to Corporate Boulevard, we have a lot of customers in that office park in warehouses that you wouldn’t think there was a major manufacturer, but they’re manufacturing. The small ones need us just as much as the big ones because they don’t have an engineering staff on hand.”

(One of those smaller companies is Avkin, which manufactures wearable simulators for healthcare training in its Newport location once known as the indoor bounce house Pump It Up.)

John Lees, the owner of Allied Precision, who launched the beginnings of the company in his garage in 1991, has watched as lower New Castle County has evolved for the industry.

“Twenty years ago, Middletown was quite rural, but it’s grown leaps and bounds, business-wise,” he said. “It’s been growing steady — probably too fast for its own good. It’s just convenient, and now with the bypass going through it’s even more convenient to get to Philly and Baltimore and everywhere. It’s worked out well for us.”

Pharmaceutical giant Astra Zeneca, which has Delaware locations in Wilmington and Newark, has invested over $100 million in upgrading its 570,000-square-foot Newark plant over the last seven years.

“We’ve done a facility transformation geared at efficiency,” the Newark site’s principal engineer, John Myers, told DPP. “We consolidated our packaging halls, put in a central palletizer, added a new 35,000-square-foot formulation space and focused on serialization and aggregation so we can track an individual bottle to a carton to a case to a pallet.” The site has also incorporated robotics and sustainability practices, with an aim to be carbon negative across its entire supply chain by 2030.

Tax benefits

Another draw is a trade sector focus where Delaware rewards companies for being here and selling elsewhere by reducing their tax liability.

“They still pay taxes, but they’re paying on what they sell in Delaware rather than being penalized for having employees and investments in Delaware,” Foreman said. They’re being encouraged to make their product here and then sell it all over the place. That’s a tax advantage, not an incentive. More than 30 other states offer that as well, but it keeps us competitive.”

The relative lack of vacant facilities goes to show that the state has had successes in manufacturing over the past few years.

“We can always build more,” the DPP head said. “We have a strong construction and development community that can work with a company to build the kind of space that they’re looking for.”

A talent magnet

In 1999, Solenis, which evolved from companies including Hercules, Betz Laboratories, Drew and Stockhausen, made a commitment to Delaware with the help of the DPP: It received performance-based grants from the state-run Delaware Strategic Fund for job creation, job retention and capital expenditures.

"Historically, those kinds of jobs have paid well and have been jobs that usually come with benefits."
Kurt Forman, Delaware Prosperity Partnership

“[DPP has] a broad mandate to grow the economy in Delaware,” Foreman said. “Our job is to help companies that are looking at Delaware, might consider looking at Delaware or are in Delaware, and one of the reasons manufacturing is one of our targets is because typically, historically, those kinds of jobs have paid well and have been jobs that usually come with benefits.”

Carolyn Lee, executive director of The Manufacturing Institute, spoke recently at the Delaware Manufacturing Conference about the industrywide skilled labor shortage — and the industry’s lagging image in the 21st century.

However, “manufacturing is an innovation industry,” she said. Today in manufacturing, jobs are likely high-paying tech and STEM jobs where a worker is far more likely to be working with augmented reality, AI or robotics — the technologies that do much of the actual assembly line work in the 21st century.

Adesis President Andrew Cottone pointed out that the talent pool in Delaware is strong, even as the industry overall struggles.

“It has a great density of scientific degrees and talent, so recruiting is easier, and it’s easy to get and keep people here with the cost of living, and all of the culture,” he said. “There are people at Adesis who went to Wilmington University or Delaware State University and, of course, University of Delaware.”

And Delaware, says Cottone, “moves at the speed of an entrepreneur” — so you can look forward to continuing growth in the sector.

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