Business Oregon News

November 2011

Focus On Success: Eugene's Ninkasi Brewing Continues to Boom and Brew

Business Oregon recently completed a new Oregon Business Development Fund (OBDF) loan of $400,000 to assist Ninkasi Brewing's rapid growth in Eugene. The latest loan from Business Oregon will help the company with the purchase of real estate and help fund improvements to the company's production of fine craft beer. The latest expansion project will create an estimated 19 new jobs over the next three years.

Since 2005, Ninkasi has grown from two employees—owner/operators—to its current team of more than 50. Ninkasi is one of the fastest-growing breweries in the U.S. with sales growth of 83% in 2010, according to the Brewers Association.

Ninkasi is already the third-largest brewery in Oregon and has seen double-digit increases in sales in the last several years. The company recently completed a $4 million expansion of its West Eugene plant, which includes a new 60-barrel brewhouse (double the size of the one they installed in late 2008) and a new bottling line that also can fill 12-ounce bottles. The company has now pushed sales into Washington, Idaho, Alaska and northern California.

An OBDF loan from Business Oregon to the growing company. A $50,000 forgivable loan from the Governor's Strategic Reserve Fund helped the company put the final pieces of its financing plan in place in April 2010. In addition, in July 2010, Business Oregon funded a $502,000 OBDF loan for the company.

In 2009, Ninkasi brewed approximately 30,000 barrels of beer. It graduated from a microbrewery to a "regional brewery" designation in 2009. The company says the new facility has a maximum capacity of 90,000 barrels, or 2.8 million gallons of beer.

John Morgan Named New Chair for Oregon InC

Governor John Kitzhaber has appointed John W. Morgan to lead the Oregon Innovation Council (Oregon InC).

Morgan is the Group Executive Vice President, Direct Health Solutions, for Cambia Health Solutions (formerly known as The Regence Group) in Portland. He has worked for five multi-national corporations, and the Governor noted that his track record of building innovative companies and raising tens of millions of dollars in private equity is a perfect fit with the council's core mission of turning promising research into growing businesses and helping established industries become more competitive.

"John's leadership and experience will help Oregon InC expand markets for Oregon companies, create jobs across the state and diversify our economy," said Governor Kitzhaber on Morgan's appointment. "This is a critical component in creating the next generation of home-grown Oregon companies."

Morgan is an original member of the six-year-old council, which works to harness private sector leadership with Oregon's universities to commercialize cutting-edge research; make established industries more competitive; help start-ups access capital, and provide Oregon businesses with access to otherwise out-of-reach R&D labs and researchers.

Before joining Cambia Health Solutions, Morgan was President and Chief Executive Officer of HemCon Medical Technologies, Inc., which developed and markets revolutionary bandages and dressings for military and civilian use that stop uncontrolled bleeding. HemCon bandages are carried by U.S. soldiers in Iraq and Afghanistan, and while at the company, Morgan completed private equity financing that raised $18.25 million and helped secure $38 million in federal funding.

Morgan succeeds David Chen, principal partner of Equilibrium Capital, who served as Oregon InC's chair since it was created in 2005. Under Chen's leadership, Oregon InC's six initiatives have helped capture $250 million in federal and private grants, create 18 companies and built a network of shared labs used by more than 227 businesses to perfect ideas as diverse as portable kidney dialysis machines and new malaria-fighting drugs.

"David Chen has been an invaluable asset to innovation in Oregon, leading the Innovation Council since its inception," said the Governor on Chen's contributions. "We couldn't have asked any more from David, and I thank him greatly for his leadership and look forward to his continued success in Oregon."

Oregon Innovation Council Research Center Receives $20 Million Federal Grant

Research Center's Work is Focused on Inventing "Green" Materials for Use in Industry
The Center for Sustainable Materials Chemistry recently received a $20 million National Science Foundation (NSF) grant that will help move cutting-edge discoveries out of the lab and into the marketplace.

The center operates in collaboration with Oregon State University and the University of Oregon and is supported by the Oregon Nanoscience and Microtechnologies Institute (ONAMI), one of the Oregon Innovation Council's three Signature Research Centers. ONAMI will provide the center with up to $2.025 million in matching funds, including a partnership with the National Collegiate Inventors and Innovators Alliance to aid the center's commercialization program; funding for student internships in ONAMI gap fund companies, and additional investments in research capacity expansion.

The new NSF funding will allow the center to expand its research and development work and boost efforts to translate basic-level discoveries into the commercialization of new technologies. Since the center's initial formation under a $1.5 million grant awarded to Douglas Kezler, a chemist at Oregon State University and adjunct professor at the University of Oregon, collaboration among scientists at several other institutions have applied environmentally friendly green-chemistry approaches to the synthesis and fabrication of compounds, thin films and composite materials.

Such "green"—or toxically benign—products could pave the way for next-generation applications of a wide variety of high-performance electronic devices applicable in such fields as integrated-circuit manufacturing, solar energy and medicine. Several patents have been filed and subsequently licensed by the center's spinoff, Inpria Corp.

Newly Formed Economic Recovery Review Council Up and Running

Focused on Finding More Developable Industrial Land to Spur Job Creation
The recently established Economic Recovery Review Council (ERRC), which consists of five state agency directors, is charged with carrying out one of Gov. John Kitzhaber's top economic priorities—increasing the amount of industrial land available for job creation—held its first meeting last month.

Under Senate Bill 766, the council has two main tasks. First, the council is empowered to approve up to 10 industrial development projects "of state significance" every two years. Among the measurements for such projects are the number of new permanent jobs, levels of capital investment and community support and the number of jobs created in relation to the local economy. The council's second goal is to approve between 5 and 15 industrial areas that are "regionally significant" by mid-2014.

The law excludes consideration of projects requiring changes in planning and zoning regulations, or federal environmental impact statements. Once a complete application is submitted, the council will have 120 days to approve or reject it. The law still requires a public hearing, conducted under local-notice procedures, and consideration that low-income neighborhoods do not bear greater shares of environmental effects.

"These are areas with unique characteristics that give them a competitive advantage to attract industry," Richard Whitman, Kitzhaber's adviser on natural resources policy, told the Statesman Journal. Whitman said in addition to streamlining the land-use process within these designated areas, he hopes state and local governments can focus their investment, such as for roads and utilities.

The agencies represented are Business Oregon, Oregon Departments of Transportation, Environmental Quality, Land Conservation and Development and State Lands. The council has yet to accept applications for either industrial projects or industrial areas, but says it will soon. Agencies are consulting with communities and five regional solutions teams, which consist of state agency representatives. The teams cover the Willamette Valley and Oregon Coast, as well as Southern, Central and Eastern Oregon.

Oregon Business Development Commissioner Chandra Brown Honored at White House

Congratulations to Oregon Business Development Commissioner Chandra Brown who was honored recently at the White House as a "Champion of Change" for her work supporting the creation of jobs in the U.S. Brown is the president of United Streetcar, a subsidiary of Oregon Iron Works, Inc., which employs hundreds of workers in Clackamas, manufacturing such items as wave energy buoys, streetcars and bridge components.

"I accept this award on behalf of our incredible workforce both at United Streetcar and Oregon Iron Works, Inc., and our supply chain and vendors across the United States," Brown wrote prior to her trip to Washington, D.C. "We believe firmly in the need to out-build, out-innovate, and out-educate and know that the success of domestic manufacturing is critical to the success of our great nation."

Clean Edge Report Confirms State's Leadership in Clean Energy Economy

Report Shows Oregon is #2 in U.S.
Oregon ranks second in the nation in clean energy leadership and enjoys a number of key assets that set it apart in the clean-tech sector, according to a just-released report from Clean Edge. Oregon's Clean Energy Economy Report leverages data from Clean Edge's 2011 State Clean Energy Leadership Index, a comprehensive performance scores and rankings for all 50 U.S. states based on activity in three key clean-energy categories: technology, policy and capital.

The Clean Edge Report, sponsored by both Business Oregon and PDC, again demonstrates that Oregon is one of the nation's leading clean energy economies and is also poised for significant growth. Business Oregon and our partners will continue to leverage our successes in clean technology sectors to create more jobs for Oregonians and new business opportunities for Oregon companies.

While the report acknowledges that the clean energy industry's relative infancy, varying sector definitions and fast-moving changes in employment figures make clean energy jobs surprisingly difficult to track, two separate reports by the Pew Center on the States and the Brookings Institution put Oregon at or near the top in the percentage of jobs dedicated to the clean economy.

Other key findings from the report:

• Oregon ranks #1 in the nation in LEED certified green building projects per capita in 2010.
• Oregon ranks #2 for smart meter distribution nationwide.
• Oregon ranks #3 in the U.S. in hybrid electric vehicle adoption.
• Oregon ranks #6 in the U.S. in total installed wind capacity and total generation.
• Oregon, Washington and California rank as the top three states for total EV charging stations as well as charging stations per capita.
• Oregon ranked in the top five states for total clean energy venture investments, on a per-capita basis, in both 2010 and between 2008 and 2010.
• For a smaller state, Oregon does fairly well in new patent generation, finishing ninth on a per-capita basis from 2002-2010.

Read the report (PDF)

Critical Rail Link Reopens Between South Coast and the Willamette Valley

More Than 700 Manufacturing Jobs Depend on the Connection
In commenting on the Coos Bay Rail line opening, Governor John Kitzhaber noted the critical connection the railway provides between key South Coast manufacturers (employing hundreds of Oregonians) to their markets and customers in the Willamette Valley and beyond.

"The reopening of the Coos Bay Rail Link is an important boost to the South Coast and Oregon's economy," said Kitzhaber. "The partnership between the Port of Coos Bay, the state of Oregon and the federal government delivered a much-needed prescription for economic renewal in this part of the state."

In September 2007, the southern Oregon coast economy suffered a significant blow with the closure of the Central Oregon & Pacific Railroad, which runs between Eugene and Coos Bay. The rail closure impacted more than 700 manufacturing jobs that depend on the line. That's about 40% of manufacturing employment in the affected area. Approximately 6,000 rail cars moved goods from the region to national markets annually.

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December Business Development Commission Meeting

The next meeting of the Oregon Business Development Commission will be in Lebanon on December 9. Exact time and place is still to be determined. Check the Events Calendar for more information as it becomes available.

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