Nutritional Laboratories keeps its business local

When Nutritional Laboratories, http://www.nutritionallabs.com/ a dietary supplement manufacturer, outgrew its Lolo building last year, it was clear the progressive company needed a new home. But where would it go?

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This story was first published in the summer edition of InBusiness, a quarterly Missoulian business publication.

By JILL FITZSIMMONS for the Missoulian in Picture the Progress ’03

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Relocating outside of Montana would cost the company less money in the long run. For at least the last few years, Montana has ranked in the bottom rung of “wealth-friendly” states, according to Bloomberg Wealth magazine. The magazine, which targets the needs of financial planners and investment advisers who counsel the affluent, ranked Montana at 44th this year.

But when Nutritional Laboratories did move out of Lolo it was just a dozen or so miles north to Missoula. The reason is simple, said Terry Benishek, president of Nutritional Laboratories. Montana is home and he plans to keep it that way. Besides, Benishek said, the state has plenty to offer.

Besides quality of life issues, Montana has some of the best workers in the country, Benishek said. What he may save in taxes by relocating to another state is offset by a better labor pool in Montana, he said.

In a recent interview at his office, Benishek spoke of the pros and cons of doing business from Montana. In business six years, Nutritional Laboratories manufactures vitamins and minerals and botanical and herbal medicines. By this fall, the company will be producing 70 to 75 million capsules a month, or more than 3 million a day, Benishek said. With sales at $20 million last year, the company is considered among the top in its field.

“We have been referred to as a leader,” Benishek said. “We aren’t the biggest, but we are considered one of the more sophisticated, or the most sophisticated, in the industry.“

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Nutritional Laboratories International

1001 South 3rd West

Missoula, Montana (MT) 59801 USA

Phone: (406) 273-5493

Fax: (406) 273-5498

Website: http://www.nutritionallabs.com/

General information inquiries:
E-mail: [email protected]

Sales inquiries:

Ned Becker, Vice President, Sales, Marketing & Business Development

E-mail: [email protected]

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Nutritional Laboratories moved to its new location at 1001 S. 3rd W. (formerly home to Hellig-Meyers Furniture Company) nearly a year ago. The new building, more than twice the size of its former location, has three times the laboratory space and increased manufacturing and packaging capabilities, including the ability to produce and package four times the number of capsules and tablets processed at its previous address, according to company information.

In Lolo, large customers were questioning how the company was going to be able to handle increases in production. With the sophisticated equipment the company has, it caters to larger companies, Benishek said. The move to Missoula brought with it a contract with one customer for 30 million tablets a month. They couldn’t have done that in Lolo, Benishek said.

Beyond increased quality and volume output, the new building also allows the company to expand its scope in terms of types of products produced, according to information from Nutritional Laboratories. Now, the company is gearing up to produce pharmaceuticals one day.

Benishek said the city and several local organizations have been supportive of the company’s move. The company worked closely with the Missoula Area Economic Development Corporation, the city of Missoula, the Missoula Redevelopment Agency and First Security Bank.

In the summer of 2001, MAEDC approved a $200,000 loan to Nutritional Laboratories for new equipment, and First Security Bank approved a $2.5 million loan. SDA/Rural Development agreed to guarantee 80 percent of the bank loan. To reduce the interest rate on the guaranteed portion of the loan, the bank then sold that portion to the Montana Board of Investments, according to information from MAEDC.

The company also qualified for assistance from the Missoula Redevelopment Agency, which provided $50,000 for parking, landscaping and other site improvements.

Later, MAEDC increased its contribution to the project to $930,000 so the company could purchase additional equipment to meet productivity requirements.

Along with the support from the community, there are several other reasons why Nutritional Laboratories chooses to do business in western Montana, Benishek said. For one, the area has a quality trucking industry whose rates are better than large cities such as Denver and Los Angeles, he said.

“We get some of the best rates in the country,” he said.

The company is also able to attract and hire national and international talent due to the presence of the University of Montana, the town’s inviting locale and its reputation for quality of life.

And then there’s the quality of employee Benishek spoke of. There is a significant difference in the employee from the Midwest and one from Montana, said Benishek, who spent 15 years in the automotive manufacturing industry. His employees have a strong work ethic and are more conscious of giving his company their best, he said. Although there is little training in manufacturing in Montana, employees are well-educated and well-trained by the company.

And this labor force makes Missoula an ideal location for small, more technically sophisticated manufacturers such as Nutritional Laboratories, he said.

“That is an advantage that isn’t well understood by people looking to relocate,” he said.

But it isn’t all good in Missoula. The city hasn’t had a good track record when it comes to manufacturing companies because the state has little knowledge in this area, Benishek said. Montana also doesn’t have the programs in place to attract manufacturers, he said. Those factors alone tend to get Montana overlooked, he said.

While the airport offers plenty of flights, customers often have complained about the high cost of flying into Missoula, he said.

And, it’s more expensive to do business here, Benishek said. The state has less money for tax incentives that would encourage a company to relocate here. Back in the Midwest, communities can be ruthless in trying to attract manufacturers, he said.

While he can understand why some people in this state are hesitant to attract large manufacturers, focusing on creating incentive programs for companies such as his – small, more technically sophisticated manufacturers – could go a long way toward boosting Montana’s economy, he said.

Like many businesses in Montana, Benishek has learned there’s some give-and-take when doing business in the Big Sky. One thing is for certain: the community is certainly better off with Nutritional Laboratories.

The company, for starters, turned a vacant retail space into an attractive building for its neighborhood. Nearly all of the company’s 55 employees are from Montana, and if the company continues to grow, it will create even more jobs for the area. And the company not only pays $31,000 a year in property taxes and $25,000 in equipment taxes but it also makes several donations to community organizations.

So it appears Missoula and Nutritional Laboratories have made a good match.

“We have no intention to move out of Missoula,” Benishek said.

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