A Japanese firm provides animal agriculture products and services...A French company designs and develops computer system transformation projects...
A British business provides telecommunications software solutions and another French company creates automated microbiology and immunoassay systems.
What do these companies have in common? They are among the approximately 100 St. Louis-area businesses owned by foreign investors. How they came to set up shop in St. Louis varies, but U.S. subsidiaries of foreign-owned companies are increasingly important contributors to the local economy.
Foreign investors in St. Louis are based in Europe, Asia, Australia, the Middle East and Canada. The majority are Japanese (19 companies), followed by German (17) and British (14). They manufacture or distribute everything from abrasives to zippers, including auto seat foam, barber equipment, flavors, flour, paint printed music, silicon wafers, stove pipes, transformers, tubing and yeast. Overseas-based companies also rent trucks, run hotels, store hard copy, manage assets, forward freight, publish medical journals and conduct auctions from or in St. Louis.
“We target particular industries that we can offer the most benefits, and an opportunity to operate here in a profitable manner,” says Ronnie Bryant, senior vice president of economic development at the RCGA. Targeted industries include life sciences, transportation and distribution, auto manufacturing and suppliers and financial institutions.
In return for locating here, Bryant says, a foreign-owned company gains many advantages. “The region offers a trained work force, and critical transportation arteries including rivers, interstate highways, railroads and a major hub airport.” Another intangible but critical benefit, Bryant says, is “a very pro-business climate on the state and local levels and an economic development agency—the RCGA—that’s very pro-active and aggressive in facilitating a move.”
To find potential foreign investors, the RCGA works with relocation consultants, monitors financial, business and international publications “and does a lot of plain networking,” Bryant says.
In addition, the RCGA gets leads from the Missouri Department of Economic Development, which maintains offices in several foreign countries. The organization also participates in DED-sponsored trade conferences, shows and missions.
“We look for growth industries and individual businesses experiencing growth,” Bryant says. His team targets foreign-owned companies that are already here and are considering expanding, either through capital investment or by adding employees. “We also look for companies that might be seeking a partnership here or wanting to buy a business outright,” Bryant says, “or they might come in as a wholly-owned subsidiary.”
That’s how Cap Gemini America, Inc., came to open an office in downtown St. Louis. The Paris-based company is part of the $4.4 billion Cap Gemini Group, an information technology and management consulting company with 40,000 employees in 20 countries, including 4,000 in 33 U.S. cities.
Steve Angelo, vice president/unit manager of Cap Gemini in St. Louis, explains the company was hired in 1988 to work on a project for a federal government office in St. Louis. “We started with 30 people and no office and today we have 125 billable consultants,” Angelo says. The multi-year project was a “launching pad” to build the business in St. Louis. “We grew organically, through local sales efforts and building long-lasting relationships,” Angelo says.
A key benefit of doing business in St. Louis, Angelo says, is “here, employees are committed to the region and to Cap Gemini. We have a much higher turnover rate on the East and West coasts.” In addition, the company is able to recruit most new staff members through local colleges and universities.
Another French-owned company, bioMerieux, Inc., originated as a division of McDonnell-Douglas. The company, then known as Vitek, developed systems engineering, originally for a bacteriological testing program in space, explains Al Luderer, president and chief operating officer. Today, bioMerieux is a global provider of automated microbiology and immunoassay systems for clinical microbiology and industrial quality control laboratories.
When parent company bioParticiants of Lyon bought Vitek in 1988, “it was a great marriage, because they offered expertise in microbiology, biology and chemistry, and Vitek offered terrific systems engineering,” Luderer says. “The cultures of the two have worked very well since there was no initial redundancy.”
The company has 700 employees at its U.S. headquarters in Hazelwood, and markets its products in 130-plus countries. Like Angelo of Cap Gemini, Luderer is impressed with the region’s motivated work force and university resources. “And we love TWA,” he adds.
Japanese-owned Novus International, Inc., a leading supplier of nutritional supplements for commercial animal feed producers, also started out as a division of a St. Louis-based company, Monsanto. It was purchased by a Japanese partnership in 1991.
“We’ve been very honored by the two owners we have,” says Tony Vogel, vice president of marketing. “They’re pretty large companies in their own right and had experience working with foreign assets before, so the culture didn’t change too much. They’ve allowed us to operate as we had in the past and it’s been very successful.”
Novus has 120 employees at its U.S. headquarters in Creve Coeur. Since becoming Japanese-owned, the company has built two research facilities in the area. “Since all the research, marketing and administrative staff were well in place here in St. Louis, it just made sense for the business to remain here. There was no other single place more compelling to warrant moving everyone,” Vogel says. He cites access to an international airport as a major advantage of the region. “Also, in St. Louis the commute is fairly convenient for most employees, compared to Dallas or Atlanta. It’s a relatively easy place to live with an attractive cost of living.”
Because of those and other regional attributes, Amdocs, Inc., a British-based company with operations on nearly every continent and more than 400 employees in its U.S. headquarters in Chesterfield, also decided to stay and grow.
The company, a leading provider of customer care, billing and order management solutions for telecom companies worldwide, came to St. Louis in the mid-1980s to work on an automated directory software publishing venture with Southwestern Bell. “Our initial contact with them was at a trade show,” says Tom O’Brien, treasurer/secretary of Amdocs, Ltd. and treasurer of Amdocs, Inc. “We were marketing and they were looking.”
Since then, Amdocs has developed other specialized systems for various Southwestern Bell divisions. “They’re our single largest customer group and an equity owner in the company,” O’Brien says.
As the business grew, the company outgrew its leased development facility. “We could have built a new one in any city,” O’Brien says. “We looked at other high-tech centers like North Carolina’s Research Triangle and in Austin, but we made a conscious decision to set up the center here.”
One important factor, O’Brien says, was the availability of excellent software programmers. “We are recruiting the most desired employees in the world,” he says. “High-tech programmers can work anywhere for anybody.” St. Louis’ central location and TWA hub also were considered. “Above all, we were very much assisted by Lynda Andrews and the RCGA, the St. Louis County Economic Council and the ‘BUILD Missouri’ program,” O’Brien says. “We were not familiar with the various programs that help companies set up development centers. These organizations showed us how to take advantage of some valuable opportunities.”
As the world gets smaller and economies become more interdependent, foreign investment in the region is sure to rise. “We already have a substantial base of foreign-owned companies here and I think we’ve been quite successful in encouraging them to expand, and attracting new companies,” Bryant says. “The merits of the region and our marketing abilities are a powerful combination.”
