Division of Economic Development

1. Division of Economic Development Quarterly Design Meeting: Feb 5, 2013

2. Manufacturing Current Action Current Growth Categories/List of Products Examples Economic Benefit Designer Support Alaska and Forest Product Preference Program – APP/FPP Overview Benefits of Alaska Product Preference Page 2

3. Sectors in Alaska produce viable products such as clothing, printing, fuel, insulation, and food items that support local jobs. One of the State’s roles is supporting local manufacturers through programs such as the Alaska Product Preference (AKPP) program, in conjunction with the Department of Administration’s (DOA) purchasing process. Alaska and Forest Product Preference Program – APP/FPP Manufacturing Page 3

4. Alaska and Forest Product Preference Program – APP/FPP Product Preference AS 36.30.332 Preference Mission 2010-13 Goal • Assist in securing the purchase of locally manufactured goods through a value system for state agencies: • Maintain and published classification list of products. • Classify locally manufactured products in Alaska as 3%, 5%, or 7%. • Provide locally manufactured products with a preference over out-of-state products. • Improve the tracking system and increase the number categories and products publish by: • Educate Alaskan manufacturers and services companies of preferences. • Streamline application process through online system. • Track and identify future opportunities in manufacturing. Page 4

5. Alaska and Forest Product Preference Program – APP/FPP Current Actions Education • Since 2010, DED has engaged with the business community in an effort to better the program. As a result, DED created a curiculum to educate businesses and procurement throughout the state. Collaboration • DED is engaged with PTAC and the SBDC in an effort to provide additional outreach to businesses through workshops and webinars about state programs. Assistance • DED is involved with the Alaska Food Policy Council, school districts, construction contractors, and reaching-out to designers and engineers to support manufactured goods and sevices in Alaska. Page 5

6. Alaska and Forest Product Preference Program – APP/FPP Currently During 2012 • Products listed • 6.45% increase • 264 active • Companies registered • 7.5% (6) increase over 2012 • 86 active companies • Why is this important to designers? Page 6

7. Alaska and Forest Product Preference Program – APP/FPP Product Categories Categories • Metal Products • 29.92% • Concrete Products • 11.36% • Wood 4.55% • Insulation 3.41% Page 7

8. Alaska and Forest Product Preference Program – APP/FPP Product List Product List • Located on the states business page: • State of Alaska • Business • In the middle of the page under State Contracts: • Alaska Product Preference Program • List of Products Page 8

9. Alaska and Forest Product Preference Program – APP/FPP Construction Categories Materials • Building & Construction Materials make up: • 62% of products listed. • 164 active products. • Meet or exceed specs setforth by the industry. Page 9

10. Alaska and Forest Product Preference Program – APP/FPP Benefits of Product Preference Noel Wien Library Re-roof Example one: Insulfoam of Alaska • Bid project estimated at $150K would support, as many as, twenty-plus jobs. • Over the past several years, these jobs have been lost to out-of-state bidders in the lower 48. • On three such bids occasions, at more than $300K each, the local supplier lost the bid to an outside source averaging a loss of 20 Alaskan jobs each. • On two of the three occasions, products provided by out-of-state suppliers were replaced with more durable product conducive to Alaska’s climate (under warranty). Page 10

11. Alaska and Forest Product Preference Program – APP/FPP Benefits of Product Preference Example two: Alaska Sewing Industries • Alaska Sewing Industries (ASI) of Eagle River signed up for the Alaska Product Preference Program (APP) in 2009. • Since participating in the program, ASI credits more than 75% of their sales revenue to the State of Alaska, and • was the successful bidder in contracts ranging from $300,000 to more than $400,000. • Alaska Sewing Industries • Cathy Kochendorfer • 16629 Marcus Street • Eagle River, AK  99577 Page 11

12. Alaska and Forest Product Preference Program – APP/FPP Benefits of Product Preference Above: Custom soffit bamboo work. Reception desks at the UAF Example three: Dreamwork Cabinetry • “Alaska Products Preference has been a positive impact on our growth.” • We passed a milestone last year, cresting $1 Million in commercial sales. • Has grown to just over $1.1 Million in total volume - and should see further growth this year.  • Fairbanks alone cannot support that volume from a custom commercial casework shop. • Having Chain of Custody certification for Certified Wood has allowed us to competitively bid a number of high profile LEED Gold or Silver projects. • This year we are currently working on our first major supply contract for FSC certified content casework, which will ship in the 1st Quarter, just over a $1/4 Million. Page 12

13. Alaska and Forest Product Preference Program – APP/FPP Support Designers Benefit Results • Does Alaska produce products that can be incorporated into designs? • Review the list of products: • http://commerce.alaska.gov/ded/dev/prodpref/pppproduct.cfm • Contact manufacturers or allow them to provide you with specs on their products • How can you incorporate ? • What can we do to help? • Economic impact: • Business development. • More products. • Points for LEED Certification. • Relationships with local suppliers. • Jobs! • Increased activity in listed products. • State and/or local goverment agencies purchasing more local products. • $$$$$ back into our own economy. • Recognition of the AEC Industry‘s support of local manufacturers! Page 13

14. ? Do You Have Any Questions? ? ? Michael Hanzuk Development Specialist 550 W. 7th Avenue, Suite 1770 Anchorage, AK 99501 (907) 269-8104 michael.hanzuk@alaska.gov Page 14