Capital Ideas: Jim Herbert

With more than 400 employees worldwide, $100 million in annual revenue and a spot on Forbes Magazine’s list of 200 Best Small Companies in America, Eastside Lansing-based Neogen Corporation is a leader in the bioscience industry and is galvanizing Mid-Michigan’s science economy.

CEO Jim Herbert founded the company in 1982. Capital Gains' Ivy Hughes recently sat down with Hebert to talk about the business, the city and where he sees our region’s bioscience future.

Can you talk about your growth strategy and approach to business?

In the early days of putting the company together, we settled on this strategy that there would be concerns about food safety and that we could use the tools of biotechnology to develop that.

What we’ve always looked at is trying to anticipate what the market was going to need. We tried to stay one step ahead of what we thought the industry’s needs were going to be.

Sometimes we were right. Sometimes we produced products we thought the industry would want [only] to find out that they really didn’t want [them].

We began early on looking at natural toxins in grains, nuts and spices. We knew that was an issue and that the industry needed better ways to monitor that to make sure those didn’t get into the food chain. We were right with those.

We began to look into what would be the next lightening rod to be attached to as it relates to food. As that came into focus, it was clear that that was going to be in the bacterial pathogen area—the salmonellas, the E. colis—and fortunately we were pretty much in lock step with what happened. We had the most rapid E. coli test kit available in the marketplace when all of the major ground beef recalls began to happen.

Do you have plans to expand your facilities in Mid-Michigan?

Fortunately at this point, we still have some extra space, but we’re about to run out again.

We found one school building that was built in 1918 and we’ve filled it up. And we found one next to it that was built in 1925 and we remodeled it and filled it up. Then we moved to a group of three buildings that were built in the early 1900s. We remodeled those and made [them] scientific manufacturing models. Then we moved to another big school building that was decommissioned and converted it into labs and offices and manufacturing facilities.

I don’t know exactly what our square footage is here in Lansing, but almost all of our expansions have been in this same Eastside neighborhood area. We’ll probably be looking for more space again soon.

Do you have trouble training and maintaining your workforce?

I think there is a lot of continued opportunities here. Unfortunately one of the things we’d hoped to hang that on was the major presence that Pfizer had in the state until they determined to change some of their strategies as to where they’d be located and what they’d do.

There are three or four places in the United States that you could point to that have similar magnet attractions like we do here in Michigan. You’ve got four major research institutions here all within an hour of each other. You’ve got Michigan State, Michigan, Wayne State and the Van Andel Institute in Grand Rapids. So that, plus, consider the large amount of college graduates coming out of these schools, not [just] at the bachelor level, but also at the PhD level.

This state is in need of economic development now, so you’re apt to look at starting new businesses where you’ll be appreciated and where there’s opportunity. And there’s certainly opportunity and there’s certainly need here.

We continue to believe that this sector will grow. I think some of the things that the state’s done have not been fully realized yet and should be.

Does Michigan have a competitive advantage in this industry?

I think Michigan certainly doesn’t have a competitive disadvantage.

There are a lot of companies in this state that are doing well and in some cases very well. Unfortunately, we hear about what the layoffs are going to be at Ford or Chrysler or what’s happened to auto manufacturing and we probably don’t do a good a good enough job talking about all of the great things that are happening in this state.
When we look at the life sciences in the biotechnology area, there are a few places where we have a collection of universities and companies and therefore employees that move around.

It’s becoming more recognized—and will continue to be more recognized—that the quality of life and lifestyle is just a little bit easier here. It’s a lot easier to maneuver your way around in five o’clock traffic in Mid-Michigan than it certainly is in San Diego or San Francisco or the Washington, D.C. area.

I think the cost of living is certainly competitive here. It’s always been, but it’s certainly competitive now as we look at the world economy.

There’s no reason that Michigan shouldn’t stand up and be counted as one of the three or four best locations in the United States to be in the life sciences businesses.

You work and live on Lansing’s Eastside. What’s the attraction?

We lived in East Lansing for the first 20 years, and I’d always lived in a space where I’d had a big yard to mow in a rural area or a suburban area. But we spotted that [Eastside] house and became interested in it and ended up acquiring it and thought, “This will kind of be a nice change to be living in almost an inner city area.”

I can see the Capitol dome every morning when I go out to get the newspaper, and most of my business is around here. It’s kind of nice to be a part of this, because our business has helped to develop this area and the Eastside and make use of old buildings.

We live in the same neighborhood where we’re growing our business and that makes a big statement, certainly.

I think [the area] is developing, and there are lots of people in a volunteer role who deserve a lot of credit for what’s happening. I suspect if you look at most cities that are going through some kind of rejuvenation you’d find almost the same pattern, that when more and more people care about the neighborhood they live in, it just gets to be better.

James Herbert is CEO of Lansing-based Neogen Corporation.

Ivy Hughes is the Managing Editor of Capital Gains. 

Dave Trumpie is the managing photographer for Capital Gains. He is a freelance photographer and owner of Trumpie Photography.


Noegen CEO Jim Herbert and employees Waylonne Sullen and Jerry Koroniotis.

All Photographs © Dave Trumpie

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