Tennessee: A Hotbed for Foreign Direct Investment

Locations across the globe are looking to invest in Tennessee.


https://businessfacilities.com/2017/07/tennessee-a-hotbed-for-foreign-direct-investment/
Locations across the globe are looking to invest in Tennessee.
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Tennessee: A Hotbed for FDI

Locations across the globe are looking to invest in Tennessee.

Tennessee: A Hotbed for Foreign Direct Investment

By the BF Staff
From the May/June 2017 Issue

Tennessee was ranked No. 1 among all U.S. states for foreign direct investment (FDI) job commitments in 2015, according to the 2016 IBM Global Locations Trends report. There are approximately 926 foreign-based companies with operations in the state and foreign investments total more than $33.8 billion in capital investment. More than 127,000 Tennesseans work for foreign-owned companies, which accounted for 30 percent of all new job commitments in the state in 2015.

Every corner of the globe is represented in the Volunteer State, including more than 180 Japanese-owned companies, Tennessee’s largest foreign investor nation with over 50,000 employees. Germany, Canada, United Kingdom and Korea round out the top five with more than 280 companies and over 30,000 Tennesseans employed between them.

Tennessee has international offices in South Korea, the United Kingdom, Japan, China, Germany, Italy and Benelux. And, according to Allen Borden, deputy commissioner for the Tennessee Department of Economic and Community Development (DECD), the state is looking to add recruitment offices in France and Spain.

“There is a direct correlation between having suits and boots on the ground and capital coming to Tennessee,” said Bob Rolfe, Commissioner of Tennessee DECD.

“If you are not in the global game of economic development, you’re not in the game at all,” Borden said.

Last year, FDI accounted for nearly 20 percent of all new jobs and 15.6 percent of all capital investment committed in Tennessee. The German-based Wacker Chemical completed a $2.5 billion polysilicon plant in Charleston and Germany’s biggest car company, Volkswagen, invested more than $600 million to expand its $1 billion auto assembly plant in Chattanooga. In addition, the stamped parts and chassis producer and VW supplier, Gestamp of Spain, spent $180 million on a Chattanooga expansion. Up the road on I-75, Denso Manufacturing completed an $85 million expansion of its Athens facility. The company also broke ground on a 186,528-square-foot warehouse in Blount County, marking the first phase of a $400 million expansion and beginning the hiring process for 500 new jobs. Further, French-owned Teleperformance, a company specializing in customer experience management, invested $800,000 in its Sullivan County facility and expects to create 500 new jobs within the next five years.

Borden expects this number to go up, stating, “The U.S. marketplace is the largest in the world and these international companies that want a piece of the U.S. market know that they are going to have to come to the United States and invest here, open up factories here and hire people here to be able to play in this space.”

Another foreign investment in Tennessee included Belgium-based Verstraete IML. In October 2016 the in-mold labeling manufacturer announced it would invest $20 million to locate its first U.S. manufacturing facility in Clarksville and create 59 new jobs in Montgomery County. Renovations in the 56,000-square-foot building should be completed by July of this year.

“The decision to expand our production capacity with an international site is a huge step for our company,” Managing Director of Verstraete IML, Koen Verstraete said. “Going to North America will not only strengthen our position as global leader, but also gives us direct access to North America—the IML market with the best growth potential.”

And though Bob Rolfe said the DECD budget likely will be flat in the year ahead, he added that major projects are still getting the support of the state with tax breaks, fast track incentives and special grants.

Beretta USA is a prime example of the importance of these breaks and incentives. The Italian gun maker opened a $15 million firearms manufacturing and engineering center in Gallatin in 2016, adding more than 100 jobs at the 160,000-square-foot facility. According to the company’s lawyer, Jeff Reh, the financial package for their $45 million manufacturing and research and development facility that was announced in 2014 included a 10-year tax abatement worth about $2.2 million.

“We would not be considered for a lot of projects without the strong support we have from the governor and our Legislature,” Rolfe said. “When companies look to the Southeast to locate new plants and hire new workers, they look to the economic incentives, no matter how great our quality of life is here in Tennessee.”

Tennessee’s growth in 2017 also will encompass a number of domestic-based businesses.

“The pipeline in Tennessee right now for new projects is probably as grand as it has ever been,” said Rolfe. “We’re seeing manufacturing companies making the decision to redeploy capital back in the U.S. and bring some of these jobs back on shore with the concept that they are going to build it here and sell it here. That is so exciting for all of us.”

WILSON COUNTY: “FEET DON’T FAIL ME NOW”

“If you’re standing still then you’re probably losing ground.” This philosophy holds true not only in personal and professional lives but also in terms of growth, advancement and improvements in our communities. And, if you are not moving forward in the Nashville and middle Tennessee market, then certainly you are losing both opportunities and ground. Wilson County, TN and its cities of Lebanon, Mount Juliet and Watertown, which are adjacent to Nashville and its international airport, are successful not totally from their location but because they build upon all of these tremendous opportunities.

wilson county Tennessee
The Wilson Bank and Trust announced a new 57,000-square-foot operation and service center. (Photo: Wilson County Joint Economic and Community Development Board)

Elected officials and economic professionals in these communities believe that their success comes from not only their central location but from being directed and committed to their established programs and goals. The communities were successful in their economic growth because of their commitment, hard work and perseverance in three distinct arenas.

Transportation Movements

Part of the lifeblood of any economic engine is that of logistics and transportation services. In Wilson County, TN three distinct logistics and road infrastructure projects moved forward. Long recognized for its 70-mile southern loop and easier east/west transition in Nashville, TN, State Route 840 received its Interstate designation in 2016. The “new” I-840 now allows for greater funding for both maintenance and system improvements. It also has led to greater interest in the areas of industrial and commercial developments.

Mt. Juliet, TN saw its second major north/south route come closer to fruition in 2016. The Golden Bear Gateway connects the Beckwith Road interchange via the four-lane controlled access to new residential developments containing new multiple educational institutions. The project also opens up hundreds of acres which have been designated additional residential and commercial developments in one of Tennessee’s fastest growing communities.

The City of Lebanon, TN also moved its infrastructure system forward by investing in a new commercial project in 2016. The new Legends Drive project will connect two major north/south state routes. The new mile and a half route will provide greater area transit movements while providing additional hotel, commercial, office and retail opportunities.

Commercial Steps Forward

After several years of research, planning and approval, Wilson County, TN completed its new Wilson County Expo Center in Lebanon, TN. This new 78,000-square-foot multi-purpose facility is located on the Wilson County Fairgrounds, which annually hosts one of the top 50 fairs in the United States. The facility was designed to host multiple events, which have now included the 2016 National Junior Rodeo, Southern Living event and the recent Tiny House national event. The project is seen as a catalyst for the development of support hotel, commercial and retail opportunities.

Lebanon will see its historic skyline change with the Wilson Bank and Trust announcement of its new 57,000-square-foot operation and service center. The center will be located in the former historic Castle Heights

Military campus and will allow the privately owned banking and financial institution to greater serve its growing middle Tennessee market.

Industrial Movements Continue

Long recognized for its employment diversity, Wilson County continues to build upon its local and middle Tennessee business advantages. Realizing that location alone does not guarantee success, the county has continued to partner with its new and existing industrial base. Evidence of that commitment resulted in two major project announcements. Nissan North America whose manufacturing facility is located in an adjacent county announced its decision to construct its second logistic and customer center. The new and expandable 700,000-square-foot Collision Parts Center is a consolidation of multiple locations projected to provide lower costs and greater operating efficiencies.

GENESCO an international leader in the footwear and apparel industry announced its decision to expand its distribution and service center by 200,000 square feet. The addition will allow the company to address the management, design and expansion needs of its expanding Journeys Division while also improving amenities for all employees of the GENESCO operation center.

Residential Development

If improvements and expansions in roads and companies are not evident of positive movements, then perhaps controlled and unique residential growth can meet that definition. Lebanon, TN saw the approval of Tennessee’s first transit community grant in the Hamilton Springs development. The new transit development will contain both commercial and retail components and will have its designated train station of the Music City Star. The new development also will contain a 15-acre park, which will include multiple recreational and quality of life features.

Great location, solid governments and committed leadership—perhaps this is why Wilson County and its cities are on the move. So, if you have dreams, want to work and have the drive to keep moving, contact the Wilson County, TN Joint Economic and Community Development Board at (615) 443-1210, or visit www.doingbiz.org. They want feet that keep moving and to be the shoe that fits.

MNAA: BUILDING THE FUTURE OF NASHVILLE AIR TRAVEL

The Metropolitan Nashville Airport Authority (MNAA) works tirelessly to ensure Nashville and the surrounding region has a world-class facility in Nashville International Airport (BNA). That work is never-ending, especially now given the rapid growth of the community and the ever-increasing interest seen around the world in “Music City.” With that in mind, it makes sense that every component of BNA Vision, a conceptual plan to develop and expand Nashville’s airport, is designed to increase Nashville’s global accessibility.

A Booming City with Global Attraction

BNA is served by 12 airlines, offers 440 daily flights and is the fourth fastest growing airport in North America. Each month, quarter and year that passes breaks another passenger record—a testament to the booming prosperity of the region and how Nashville’s global profile attracts an unprecedented number of visitors to the city. In 2016, nearly 13 million passengers traveled in and out of BNA, an increase of more than 1.3 million passengers over 2015. That’s a remarkable 11 percent increase and a new all-time passenger record for the fourth consecutive calendar year. Current projections show BNA will easily surpass 20 million passengers by 2035, a time when the metropolitan area will surpass 2.5 million people.

Nashville: An International Destination

BNA Vision is the dynamic expansion and renovation plan designed to get in front of Nashville’s rapid growth and maintain BNA as a world-class airport—particularly when it comes to international travel.

Nashville’s economy is expanding, its population is booming and its global profile is steadily gaining interest and attention, bringing record numbers of domestic and international tourists alike to the city. For example, as country music steadily becomes mainstream in overseas markets like London, Nashville is attracting visitors who want a firsthand experience of the city internationally recognized as Music City. As more healthcare industry giants and technology industry leaders call Nashville home, more business leaders from overseas markets such as Tokyo will seek easier access to the city for their business ventures.

That’s why, as a key part of BNA Vision, MNAA is constructing a state-of-the-art International Arrivals Building (IAB) at BNA to accommodate the anticipated increase in international travelers and attract nonstop flights to London, Tokyo, Latin America and more. With increasing community interest in overseas flights in concert with international business and tourism activity, a new and enhanced IAB is a vital piece of the puzzle.

While the new IAB is under construction, MNAA is showing airlines that they’re serious about landing additional international service to Nashville by improving the current IAB facility at BNA to create an improved passenger experience during the interim. Knowing that Nashville will service additional international flights, this facility will show airlines BNA is operationally prepared to embrace its position as a gateway to Nashville, a city with growing international appeal. Interim IAB enhancements will:

  • Increase processing capacity from 200 passengers per hour to 400 passengers per hour;
  • Add an additional passenger boarding bridge;
  • Upgrade the U.S. Customs and Border Protection processing area, including installation of self-check kiosks and screening equipment; and
  • Include a new concourse corridor to eliminate the need for arriving passengers to re-check baggage or be re-screened by the Transportation Security Administration, unless transferring to a domestic flight.

Building the Future

BNA Vision also calls for a spacious central entrance hall to welcome travelers—international and domestic—with natural light and compelling airfield views where they will watch international and domestic airlines arrive. The great hall will comfortably accommodate airline ticketing, baggage check-in and expedite federal security screening.

As part of this expansion, MNAA will continue to develop additional parking and ground transportation improvements to meet the growth of the airport and relieve congestion, such as the new six-level, 2,000-space parking and transportation center MNAA broke ground for in January 2017.

BNA Vision and its focus on facilitating international travel is the type of innovative undertaking and bold planning that’s needed to attract international flights, accommodate Middle Tennessee’s booming population and support the airport’s record-breaking passenger increases. It’s an ambitious undertaking—one that MNAA is proud to spearhead as it is necessary for both the airport and the region to continue accommodating travelers both local and from around the world. The benefits are clear and the need is immediate. As Nashville embraces its increasing profile on the international stage, BNA—and its plan for expansion—is well situated to serve the community and accommodate the new-found attention across the globe.

PARK YOUR BUSINESS IN CLARKSVILLE-MONTGOMERY COUNTY

Clarksville-Montgomery County is an established economic powerhouse within the Middle Tennessee region of the United States. Concentrated efforts to deliver world class infrastructure and business support have made the area an international hub of development activity. Clarksville-Montgomery County’s total package, from a skilled and available workforce to affordable metropolitan living, places this historic locale at the top of site selectors’ lists time and again.

Clarksville-Montgomery County Tennessee
The Hankook Tire facility is nearing completion and will be the largest tenant in the expanded portion of the Clarksville-Montgomery County Corporate Business Park near I-24. (Photo: Aerial Innovations)

The Clarksville-Montgomery County Corporate Business Park is zoned M-2 heavy industrial and is under full ownership of the Industrial Development Board (IDB). Businesses throughout the park benefit from industrial grade gas, water, power and sewer infrastructure that already is in place. Utilities are attractively priced and highly reliable. The Park underwent an expansion in the fall of 2014 with the addition of 833 acres. This has given the IDB over 1,100 acres of land to market to potential prospects.

Clarksville-Montgomery County Corporate Business Park, which includes Business Park South and Business Park North, was designated AT&T Fiber Ready in December 2016. Since connectivity is vital to new employers and all business types, this designation helps economic development leaders more effectively position their communities for site selection by emphasizing the availability of high-speed, fiber-based services.

“This designation will help raise awareness about the infrastructure and benefits of Montgomery County’s Industrial Parks with prospective companies and site selection consultants around the world,” said House Speaker Pro Tempore Curtis Johnson. “As our economy continues to head in the right direction, it is due in large part to a focus on smart policies that enable investments like these.”

In October 2015 Hankook Tire broke ground on an $800 million, 1.5 million square foot state-of-the-art manufacturing facility in the expanded portion of the Clarksville-Montgomery County Corporate Business Park. The company is now close to celebrating its official grand opening. Once fully operational, it is estimated that Hankook Tire will hire 1,800 workers for an estimated production capacity of 11 million tires, mostly for regional supplies in the North American market.

Tennessee was chosen as the ideal location for the company’s plant as it provides an extensive transportation infrastructure.

“The new Tennessee Plant will be a pivotal instrument to accommodate our growing business in the United States and also to propel a well-balanced global production portfolio,” said Mr. Seung Hwa Suh, Vice Chairman and CEO of Hankook Tire. He added, “Combined with our advanced technological capability, the newest plant will create premium value and solidify our presence as a top-tier player in the global tire industry.”

In December 2015, it was announced that Google had acquired the former Hemlock Semiconductor site in the Corporate Business Park North, which it plans to transform into its eighth U.S. data center, or 15th global data center. The company expects to invest $600 million in the project and create 70 new jobs.

The roughly 1,300-acre Clarksville site will be powered 100 percent by renewable energy thanks to an arrangement with the Tennessee Valley Authority (TVA). Through the agreement, Google will be able to scout new renewable energy projects and work with TVA to bring the power onto the electrical grid. Google already has signed contracts to purchase more than 2 gigawatts of renewable energy, “equivalent to taking nearly one million cars off the road,” making it the largest corporate renewable energy purchaser in the world.

In addition to Google’s local jobs and investment, the company said local officials will begin working with Google to launch a formal community grants program to support science and technology education, clean energy and access to the Internet in the Clarksville area.

“We are going to immediately jump in and be very close members of your community, and part of that will include setting up community grants for STEM education centered around Internet access for education and small businesses,” said Joe Kava, Google Vice President for Data Center Operations. “We even do training programs in our data center communities where students learn how to do such previously unimaginable tasks as building computers and servers.”

Kava said, “Montgomery County has most of the menu that we look for. The county and the state worked incredibly hard to make this site work for us.”

Located next to the Google data facility in the Clarksville Montgomery County Business Park will be the new LG Electronics home appliance manufacturing facility that was announced just this past February. Headquartered in South Korea, the leader in appliances, electronics and mobile devices will invest $250 million in the project, creating at least 600 new jobs in Montgomery County. This will be LG’s first washing machine manufacturing operation in the United States.

According to Mike Evans, Executive Director of the Montgomery County Industrial Development Board, the first phase of the project includes construction of the 829,000-square-foot facility that will begin in late 2017. Starting in 2019, the factory will initially produce front- and top-load washing machines. Longer term, the 310-acre site offers the potential to expand for production of other home appliances.

With the LG announcement, Clarksville-Montgomery County’s direct foreign investment is now $1.45 billion, representing manufacturing facilities headquartered in South Korea, Germany, Italy, Belgium, Ireland, Austria and Japan.

“Our department has placed a significant emphasis on recruiting international companies, and today’s announcement underscores our efforts to expand our reach not just domestically, but abroad to build upon the success of the Tennessee brand,” TNECD Chief Operating Officer Ted Townsend said. “When a company with such a strong, global reputation, like LG, chooses to operate in Tennessee, it speaks volumes to our state’s many business advantages, including our thriving manufacturing sector.”

Contact Mike Evans, Executive Director of the Clarksville-Montgomery County Industrial Development Board, to learn more about available property, relocation options and incentives at [email protected] or visit www.clarksvilletned.com.

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