Excerpted from the South Bend Tribune 7/21/2013: SOUTH BEND – City leaders and economic-development officials have talked a lot over the years about South Bend’s potential as a hub for data centers.
Its location along major fiber-optic lines, relatively low utility costs and even a cold climate, which means less need for air conditioning to keep servers cool, could help attract technology companies that store, manage and analyze data for customers.
At least one businessman also sees South Bend as a good place to make equipment for those data centers.
Peter Brandstrom, chief executive of the Swedish company Bergvik Flooring Group, has found several partners here — almost by serendipity.
Bergvik supplies raised flooring for businesses such as data centers, TV stations, banks and hospitals that need to route power and network cables safely and efficiently under floors.
The company, which Brandstrom’s father founded in 1970, makes its floor panels in Sweden and other parts in South Africa.
But Brandstrom lives in the United States. He met his wife, Dawn, in 1999 while on a business trip in Rio de Janiero. She was from the Eastern Shore of Maryland, and they live in Salisbury, Md., where Bergvik has a warehouse and assembly plant.
About three years ago, Brandstrom said they recognized the dramatic growth of U.S. data centers as an opportunity for the company.
In 2011, he decided to visit Lock Joint Tube in South Bend while looking for a supplier of tubed steel — the main component in the support structures for raised flooring.
While he was here, he found out about Data Realty’s plan to build a data center at Ignition Park, the state-certified technology park being developed on former Studebaker land. He also was introduced to General Sheet Metal Works, a company based on South Main Street that manufactures parts and assemblies for a variety of industries.
Data Realty ended up using a Bergvik raised floor in its data center, and Bergvik is working with General Sheet Metal to make seismic bracing, which stabilizes data server racks in areas prone to earthquakes.
“The contacts and the dealings with all of the people in South Bend have been fantastic,” Brandstrom said. “I said to my wife, ‘We have a big facility down here (in Maryland). Otherwise, I’d love to live up in South Bend.'”
As a matter of fact, Brandstrom said Data Realty’s story has helped Bergvik sell its floor system to other data centers. A video on Bergvik’s website features Rich Carlton, president of Data Realty, explaining how the company’s flooring benefited the South Bend data center.
Bergvik’s product is different from that of the competition, too.
Companies that need raised floors typically have used custom-built stands that were welded at the manufacturer.
Bergvik’s flooring has a modular design and ships as a flat pack, unassembled, so the end users can install it onsite. The design lowers warehousing and shipping costs, and gives companies more flexibility to reconfigure equipment.
Brandstrom said he had been concerned in the past about the cost of U.S. manufacturing. “Everyone told me it was so expensive here, and they were going to China,” he said. “But I find it’s still fairly competitive to produce it here. First of all, if you have to ship everything, it takes eight to 10 weeks, and it’s very tough for cash flow to have it produced overseas.”
Taylor Lewis, an internal consultant to General Sheet Metal, said working with Bergvik is an opportunity to expand into a new market the company otherwise might not have entered. Much of the seismic bracing the company has made for Bergvik has been exported to Latin America as well as the western United States.
“There’s potentially a large market for this product,” Lewis said. “Any time we can be involved in an industry that’s growing, we grow too. We see tremendous potential for this product and related products.” Bergvik’s annual revenue is about $15 million per year, Brandstrom said, and the U.S. market for raised flooring is $160 million to $200 million per year.
“So we’re a small company,” he said. “If you look at that and the scale of opportunity in the U.S., there’s a lot of opportunity even if we were just to take 5 to 10 percent of the market share in the next few years.”
While Brandstrom’s connections in South Bend developed organically through conversations, economic-development groups in northern Indiana have been working for the past couple of years to develop a sort of match-making database to help link companies and customers more easily.
Jeff Rea, president and CEO of the Chamber of Commerce of St. Joseph County, said people can contact the lead economic-development agencies in Elkhart, Marshall, Kosciusko and St. Joseph counties to use the database and find businesses with specific capabilities in those counties.