BUSINESS REPORT: Carolinas Put Out A Welcome Mat for Business from Far East
By Ed Felton
From the September/October 2012 issue
Gov. Bev Perdue of North Carolina and Gov. Nikki Haley of South Carolina both had the same target in mind when they headed trade missions to Japan recently: bringing back the bacon for their states.
Gov. Bev Perdue and N.C. Department of Commerce Secretary Keith Crisco headed a delegation of business leaders to the high-profile Southeast U.S./Japan Annual Joint Meeting in Tokyo earlier this month.
While in Japan, Gov. Perdue and officials with NC Commerce Department met with export clients along with business prospects considering new investments. Sec. Crisco also traveled to China following the SEUS/Japan conference for two days to recruit companies in Shanghai and other cities in Zhejiang Province.
During the visit, the economic development meetings focused on growing sectors in North Carolina including energy, advanced manufacturing, automotive, life sciences and pharmaceuticals.
“I’m here for one reason: to try to boost North Carolina’s thriving business sector and grow more jobs in our state,” said Gov. Perdue. “I look forward to reinvigorating some of our standing partnerships, and to forging new opportunities this week.”
This year marked the 35th annual gathering of the SEUS/Japan conference, which brings together senior-level executives from Japan and seven states in the Southeast to explore business opportunities between the two countries. Five governors from the Southeast took state delegations to the conference. The Japanese Chairman for the meeting was Hiromasa Yonekura, who also leads the influential Japanese Business Federation (Keidanren).
Over the last five years, Japan is second in the amount of direct investment made in North Carolina. Japan is also North Carolina’s 4th largest trading partner, exporting more than $1.7 billion worth of products and services. North Carolina is home to more than 150 Japanese firms, with capital investments around $5 billion—including companies like Toshiba, Hitatchi, Honda and Mitsubishi. Over the last ten years, international investment and job creation has accounted for about 15 percent of all investment and jobs in North Carolina, amounting to more than $10 billion in investment and 47,000 jobs. China is North Carolina’s 2nd largest trading partner now, exporting over $2.2 billion worth of products and services.
Gov. Nikki Haley’s mission Tokyo was intended to capitalize on Japanese companies wanting to expand their manufacturing outside of the island nation after last year’s earthquake and tsunami, the SC Department of the Commerce said Thursday.
“This is the optimum time for us to pay attention,” Commerce Secretary Bobby Hitt said during a conference call. Japanese companies “want to have plants in multiple locations.”
Haley and the other 40 members of the SC delegation held a series of meetings with Japanese companies already doing business in South Carolina, such as Honda, Fuji and Bridgestone. Hitt noted that 147 Japanese-affiliated companies have invested $1.6 billion in South Carolina since 2006. They employ 12,500 workers. Japan follows only Germany as the state’s leading international economic partner.
The U.S. Department of Commerce’s International Trade Administration (ITA) announced recently new export data that shows North Carolina merchandise exports increased 5 percent in the first half of 2012 compared to the same period in 2011, growing from $13.4 billion to $14 billion.
“This is great news for our state as North Carolina continues to thrive as a global economic leader,” said Gov. Perdue. “Nearly 350,000 jobs are supported by exports and trade with hundreds of small- and medium-sized companies in the state conducting business internationally. International exports are an important segment of North Carolina’s overall economy and this growth will aid in our recovery from the economic recession.”
According to the ITA, North Carolina’s merchandise export sales for the first half of 2012 outpaced the 2011 figures for the same period in many top destinations, including Saudi Arabia (up 60 percent), Brazil (37 percent), Mexico (20 percent), Canada (15 percent), and Belgium (14 percent). Key merchandise export categories include chemicals, machinery manufactures, transportation equipment, computer and electronic products, and textiles.
The International Trade Division of the N.C. Department of Commerce works with North Carolina companies to enter worldwide markets and develop export opportunities. Services that international trade experts provide include conducting market research, establishing best market prospects, identifying customers and partners, and other value-added services. The N.C. Department of Commerce maintains offices around the globe to support export activity and to facilitate direct investment in North Carolina. The U.S. Export Assistance Center in Charlotte also works with companies to enhance export opportunities.
Total merchandise exports from all 50 states contributed to a record $2.1 trillion in goods and services exports in 2011, which supported 9.7 million American jobs. Half-way through 2012, U.S. exports are on track to once again exceed $2.1 trillion in value, and will help support the President’s National Export Initiative goal of doubling U.S. exports by the end of 2014.
South Carolina: Global Tire Center
During the past few years, South Carolina has established itself as a global center for tire production.
Michelin North America, Inc. recently announced that the company will expand its Earthmover tire production in South Carolina with a $750-million investment expected to generate 500 new jobs.
“There is unprecedented demand for Michelin Earthmover tires throughout the world,” said Michelin Chairman and President Pete Selleck. “It’s a tribute to the productivity of our employees and the pro-business environment in South Carolina that the company is expanding its Earthmover capacity in the state where we first began manufacturing in the United States.”
When added to the $200 million announced last May in Lexington, this announcement brings the total Michelin investment in South Carolina to almost $1 billion.
“Michelin has been part of the economic and social fabric of South Carolina since the first tire rolled off the line in 1975 and has been one of our finest corporate citizens,” said Gov. Nikki Haley. “It really is a great day in South Carolina when our largest manufacturer reaffirms its commitment to the state.”
“It’s always rewarding when new companies locate in South Carolina, but it’s even better when companies like Michelin that have been here for decades decide to expand and grow,” said Secretary of Commerce Bobby Hitt. “It is a tribute to Michelin and its 8,000 employees in the state that the company has decided to grow their presence here.”
“Michelin’s increased investment in the Upstate speaks volumes to their belief in the South Carolina workforce and its business climate. We are grateful for their contributions to our region and for the jobs they bring to our citizens,” said Upstate SC Alliance President and CEO Hal Johnson.
BauschLinnemann North America, a producer of surfaces and edge bandings for furniture makers, announced plans this summer to establish a new facility and its North American headquarters in Horry County, SC. The more than $8-million investment is expected to generate 55 jobs.
“We are pleased to establish our new production facility and North American headquarters in Horry County. South Carolina has the right business environment for us and has the skilled workforce we need. We appreciate all the support we’ve received from state and local officials in moving this project forward,” said Michael Phillips, CEO and president of BauschLinnemann North America.
BauschLinnemann North America recently acquired Coastal Paper, a Horry County company and former supplier. BauschLinnemann also acquired the assets of CDM, a Quebec, Canada company, early in 2012. With these acquisitions it was determined that Horry County would be the ideal location for a consolidated production facility and North American headquarters. The facility will produce the company’s range of laminates and edge treatments.
“It’s always exciting to see another international company discover the benefits of doing business in South Carolina. We celebrate BauschLinnemann’s decision to invest in Horry County and create 55 jobs. We are working every day to attract investment from companies from around the globe,” said Gov. Haley.
Since January 2011, South Carolina has recruited more than $6.8 billion in capital investment and more than 16,000 jobs in the manufacturing sector.
The facility, located on Harrelson Blvd., will give the company 75,000 square feet of new manufacturing and office space, and is expected to be completed in the summer of 2013. The campus has room to expand to 200,000 square feet.
The scope of industry is widening in Horry County. BauschLinnemann’s HQ news came on the heels of other recent announcements by AvCraft Technical Services and Frontier Communications.
BauschLinnemann will begin hiring for the new positions in the beginning of summer 2013. The Coordinating Council for Economic Development approved the company for job development credits, which will be available when hiring targets are met.
BauschLinnemann North America is a system supplier of paper-based furniture surfaces, and is a subsidiary of BauschLinnemann GmbH.
Department store retailer Belk Inc. plans to locate a new eCommerce distribution and fulfillment center in Union County. The $4.5-million capital investment is expected to generate 124 new jobs over the next five years.
“Belk’s eCommerce growth has been very strong, and to accommodate the demand from our customers, we need additional fulfillment space. We are pleased to fulfill that need with this new facility in Union County,” said Belk President and COO John R. Belk. “South Carolina offers us an excellent business environment, a strong workforce and exceptional access to markets. We appreciate all the support we’ve received from state and local officials in making this project a reality.”
Belk Inc. will establish the new eCommerce distribution and fulfillment center, an expansion of the company’s existing eCommerce fulfillment center in Pineville, N.C., in the former Disney facility in Union, and expects to begin operations in June.
Logistics And Distribution A Carolina Growth Sector
In 2011, South Carolina recruited more than $285 million in investment and more than 2,500 new jobs in the distribution and logistics sector. Agribusiness also is thriving in the Palmetto State.
McCall Farms Inc., a producer of Southern canned and frozen vegetables, recently announced the expansion of its existing operations in Florence County. The $10.6 million investment is expected to generate 80 new jobs over the next three years.
“We are excited to see our company expand again in Florence County. Our business has grown significantly and we have a wider reach than ever. South Carolina has been a great home for our company, providing an excellent business environment and a fantastic workforce. We look forward to continuing to build on our success and appreciate all the support we’ve received from state and local officials,” said Marion Swink, president of McCall Farms Inc.
McCall Farms will increase its production capacity in Florence County with more than 50,000 square feet of new space. The new space will allow the company to increase the number of production lines it operates as well as move to a 24-7 production schedule. McCall Farms ships its products to retailers, foodservice and industrial customers throughout the United States.
“South Carolina continues to be the place to do business, and we see that with expansions like this one by McCall Farms in Florence County. We celebrate the company’s decision to invest $10.6 million and create 80 new jobs. Announcements like this one show we are on the right track with our economic development efforts,” said Gov. Haley.
Since January 2011, South Carolina has recruited more than $292 million in capital investment and more than 1,393 jobs in the agribusiness sector.
The expansion is expected to be finished in October. Previously, the company expanded in March 2010 with an addition of a new distribution facility at its Florence County campus.
“Agribusiness continues to be the bright spot in South Carolina’s economy, adding new investments and creating jobs. The McCall Farms announcement is another great example of that,” said SC Agriculture Commissioner Hugh Weathers. “A family business dating back almost 175 years, McCall Farms illustrates the importance of supporting existing agribusiness expansion in the state. I am proud to work with the Swink family and to help encourage their significant contribution to our state’s economy.”
The Coordinating Council for Economic Development approved job development credits, which will be available when hiring targets are met.
McCall Farms has been growing food for more than 170 years. The company farms and cans tomatoes, okra, corn, squash, beans, peas, peaches, peanuts, greens and more. Its products are sold throughout the United States. The produce is grown on McCall’s 2,000-acre South Carolina farm; it also contracts with farmers in Florida, Georgia and the Carolinas for another 15,000 acres. The company manufactures about 40 different products under the Margaret Holmes, Glory Foods and Peanut Patch brands, as well as private-label and foodservice products.
AVX, a global manufacturer and supplier of electronic and interconnect components, plans to increase manufacturing and research operations at its facility in Greenville County, SC. Investment for the project will be in excess of $14 million and is expected to generate more than 250 new jobs over the next several years.
“Increasing manufacturing and research operations at our global headquarters facility in Fountain Inn, near Greenville, is an important step for our company’s growth. These new operations will allow us to expand our worldwide activity and broaden our product offering. We appreciate the support we’ve received from state and local officials as well as representatives of Duke Energy,” said Kurt Cummings, chief financial officer of AVX.
The company relocated its corporate headquarters to Fountain Inn in 2009 and will complete renovations at the former Mita building located in Southchase Industrial Park in order to accommodate the increased activity.
AVX’s decision was, in part, based on business inducements from the state and the county, including a $500,000 Closing Fund grant for building improvements, job development credits, and tax abatements.
AvCraft Technical Services, an aircraft maintenance, repair and modification provider, has announced plans to expand its current operations in Horry County. The $1-million investment is expected to generate 150 new jobs.
“Location was a major factor in choosing to expand operations here. Myrtle Beach gives us a centralized location to most efficiently reach our customer base,” said Mike Hill, president of AvCraft. “Horry County officials and the Myrtle Beach Regional EDC made expanding here a very easy process.”
AvCraft will expand its facility in Myrtle Beach to help the company increase its aviation MRO services. The Coordinating Council for Economic Development approved a $100,000 grant for this project. Since 2009, Commerce has recruited more than $1.1 billion in capital investment and more than 7,000 jobs in the aerospace and aviation sector.
“The long-term lease with an option to purchase the Pamplico facility is a testament to Florence County’s pro-business climate and ability to attract top performing companies,” said Florence County Economic Development Partnership Chairman Dr. Charles Gould.
Cummins Inc. is expanding its Turbo Technologies operations in Charleston County with a $19.5 million investment that is expected to generate 76 jobs. Cummins Turbo Technologies, which designs and manufactures turbochargers for diesel engines, is adding a new building and expanding its office space at its campus in the Palmetto Commerce Park in North Charleston.
As part of the expansion, Cummins is building a 125,000-square-foot warehouse. Another 10,000 square feet of new office space will be added to the existing building and 10,000 square feet of existing space will be renovated. Cummins Turbo Technologies opened its first Charleston area manufacturing plant in 1989, operating under the name Holset Engineering until 2006. The company previously announced an expansion at the plant in July 2008. The current expansion is expected to be completed in the fourth quarter.
Since January, South Carolina recruited more than $2 billion in investment and more than 3,000 new jobs in the manufacturing sector.
Leviton Picks Morgantown
Gov. Perdue recently announced that Leviton Manufacturing Company, Inc., a leading manufacturer of electrical wiring, lighting control, power cables and other electrical products, will expand its manufacturing operations in Morganton. The project was made possible in part by a Job Development Investment Grant. To meet the targets established in this performance-based grant, the company plans to create 152 jobs over three years and make a capital investment of $7.3 million in Morganton.
Leviton designs, manufactures and markets electrical and electronic wiring devices, data center connectivity solutions, lighting energy management solutions, metering systems and related items for worldwide sale to the manufacturing, industrial and electronic industries. Founded in 1906, Leviton has become the preferred brand for electricians and homeowners, helping customers create sustainable, intelligent environments.
From switches and receptacles, to daylight harvesting controls, networking systems, and equipment charging electric vehicles, Leviton products help customers achieve savings in energy, time and cost, all while enhancing safety. Headquartered in Melville, N.Y., the company currently employs 531 people in North Carolina.
While individual wages for the 152 jobs will vary by job function, the overall average for the new jobs will be $35,488 a year.
Sheetz Inc., a large chain of convenience stores and gas stations, will establish a distribution and food manufacturing facility in Burlington. The company plans to create 254 jobs in North Carolina by the end of 2018, and invest more than $32.8 million in its Alamance County facility. The project was made possible in part by state grants from the Job Development Investment Grant and the One North Carolina Fund.
“Companies like Sheetz recognize that North Carolina is a great place to thrive because of our top-notch business climate, well-trained workforce, and a strong logistics network that fits the company’s needs,” said Gov. Perdue. “We’re going to keep leveraging North Carolina’s tremendous assets as we continue our focus on job expansion.”
Sheetz Inc., founded in 1952, is a family-owned convenience store chain based in Altoona, Penn. The company operates more than 425 locations across six states – Pennsylvania, Maryland, Virginia, Ohio, West Virginia, and North Carolina – and employs more than 14,500 employees.
“We appreciate the support we received from the Department of Commerce, Alamance County and the City of Burlington throughout this process,” said Stan Sheetz, president and CEO of Sheetz, Inc. “North Carolina’s winning mix of a strong labor force, financial assistance, and excellent location will enable us to better serve our customers and expand our offerings in North Carolina and Virginia.”
The Burlington facility, operating as Sheetz Distribution Services, will support the company’s growing retail base in Virginia and North Carolina. Sheetz continues to transform its business model from a traditional gas station/convenience store concept to include offering “kicked-up convenience” such as baked goods, made-to-order sandwiches and salads, and other restaurant items.
Compensation will vary by job function, but the average annual payroll will be more than $7.4 million plus benefits.
To help facilitate this new operation, the company has been awarded a grant of up to $800,000 from the state’s One North Carolina Fund. This fund assists the state in industry recruitment and expansion by providing financial assistance through local governments to attract business projects deemed by the governor to be vital to a healthy and growing state economy. One North Carolina Fund grants require a local match, and this grant is contingent upon approval of local incentives.
Hospira, a leading provider of injectable medicines and infusion technologies, will modernize and expand the capabilities of its operations in Nash County. The company plans to create 200 additional jobs and make new capital investments for the construction, improvement, upfitting and equipping of existing and new facilities. The capital investment will be at least $85 million over the next three years and could grow to be up to $270 million over the next ten years. The project was made possible in part by a $645,000 grant from the One North Carolina Fund. The state grant will be based on the company investing $85 million over the first three years of the project.
Hospira is the world’s largest generic injectable pharmaceutical manufacturer. The company’s products are used by hospitals, outpatient clinics and other healthcare sites, such as clinics and home-health facilities. The company currently has about 2,400 employees at its Rocky Mount facility.
Salaries will vary by job function, with new positions including technical, supervisory, production and support roles. The average annual wage for the new jobs will be $51,780, plus benefits. The Nash County average annual wage is $34,112.
“Hospira is proud to be able to bring new jobs to the Rocky Mount community with the support of the state of North Carolina and other community partners,” said Marty Nealey, vice president, Rocky Mount Operations, Hospira. “Our new facility expansion and technology investments underscore the importance of the Rocky Mount facility in supplying life-saving, lower-cost medicines for our patients, customers and health care providers in the global marketplace.”
The One NC Fund provides financial assistance, through local governments, to attract business projects that will stimulate economic activity and create new jobs in the state. Companies receive no money up front and must meet job creation and investment performance standards to qualify for grant funds.