By Donna Clapp
From the May/June 2019 Issue
The United States topped the AT Kearney Foreign Direct Investment Confidence Index for the sixth year in a row in 2018 as the leading destination for FDI. According to the AT Kearney report, the strength of the U.S. economy, a huge domestic market and the new lower corporate tax rates are key factors keeping America on top of the FDI leaderboard.
Canada rose to second place in AT Kearney’s 2018 FDI Confidence Index, its highest-ever ranking in the index, while China fell to fifth place, its lowest ranking. Italy and Switzerland entered the top 10 for the first time in more than a decade, pushing India and Singapore out of the top 10.
European markets accounted for half of the top 10 and half of the total positions in the 2018 index. Global investors surveyed by AT Kearney were optimistic about economic opportunities in Europe, Asia-Pacific, Eurasia and the Americas, but expressed growing pessimism regarding the outlook for the Middle East and Africa.
Measured in capital investment, the U.S. is by far the world’s leading destination for incoming FDI, drawing more than $300 million annually in new investments and outpacing second-place China by more than 2-1, according to the UNCTAD Global Investment Trends Monitor.
The U.S. surge in incoming FDI has made foreign direct investment a top economic development priority for state and metro EDOs throughout the country. We’ve asked leading FDI destinations to give us the keys to their successful FDI strategies.
ILLINOIS: THE WORLD’S 17TH LARGEST ECONOMY
Foreign direct investment (FDI) is key to the economic renaissance underway in Illinois and a vital strategy for Intersect Illinois, the privately-funded, not-for-profit economic development office focused on bringing new jobs, investment and economic prosperity to the state of Illinois. Illinois ranks first in the Midwest as a destination for foreign investment. More than 1,890 foreign firms call Illinois home and they employ more than 319,000 Illinois residents. More than 80 foreign consulates are located in IL.
With the world’s 17th largest economy, Illinois is strategically located at the heart of the country, at the crossroads of commerce that puts businesses, people and goods within a four-hour flight of the entire North American market—not to mention non-stop service to more than 65 international destinations. That’s just one reason why 39 Fortune 500 companies and 440+ major corporate headquarters call Illinois home.
Illinois has proven to be a natural choice for international employers looking to expand in the North American market. The state’s more than 1,900 foreign companies contribute more than $100 billion to the states GDP—and include such notable firms as Novartis, Ricoh, Bombardier, Siemens and BP. Illinois ranks fifth in the nation for number of employees supported by U.S. subsidiaries.
Illinois’ world-class infrastructure includes eight foreign trade zones and five international airports. In addition, the state’s seven Class I railroads, third largest interstate highway system in the country and third largest intermodal port in the world provide unparalleled access to global markets. This allows international companies to reach their global customers and operations seamlessly, this has helped Illinois become the largest exporting state in the Midwest and the fifth largest exporting state in the U.S.
The state’s international population includes more than 40 distinct ethnic communities with populations over 35,000 and more than 80 foreign consulates help to facilitate employee relocation for global firms.
Illinois corporations also benefit from top-notch digital infrastructure; reliable, low-cost energy; abundant water; and natural resources. One of Illinois’ tremendous strengths is the diversity of industries prevalent there. The state is particularly strong in advanced manufacturing, agribusiness and food processing, financial services and life sciences. In fact, more than 290,000 workers are employed in advanced manufacturing.
Every state likes to say they’re innovative—but in Illinois, the facts speak for themselves. The state’s highly educated workforce of 6.4 million people is supported by more than 200 higher education institutions providing a multitude of degrees and certificate programs. The state also is home to the 10th top engineering school in the U.S.
International relationship building has been crucial to Intersect Illinois’ foreign investment strategy. Over the past year, Intersect Illinois has built strong international relationships while promoting the state’s assets. Intersect has taken part in jobs missions to China, Japan, Germany, Poland and Italy and hosted multiple delegations from these countries that have directly resulted in investment in Illinois.
A recent example of the results is Faber-Castell Cosmetics’ announcement of its first North American manufacturing facility in Illinois. The decision to locate in Illinois came after Intersect Illinois led a trip to Germany, where the delegation, including then-governor Bruce Rauner, met with Faber-Castell’s leaders. During the April 2018 trade mission to Poland and Germany, Rauner met with leaders of Faber-Castell at their world headquarters in Stein, Germany. The company, best known for their pens, pencils and art supplies, dates back to 1761 and does business with more than 100 countries. The cosmetic division, Faber-Castell Cosmetics, is currently celebrating its 40th year anniversary as a world-recognized private label cosmetic manufacturer, focusing on color cosmetics and nail care.
“I am proud to announce this project during the 40th year of Faber-Castell Cosmetics,” said company President Countess Mary von Faber-Castell. “The U.S. facility will become Faber-Castell Cosmetics’ beta factory with exceptional, industry-standard processes and systems, in addition to offering U.S. customers the same speed-to-market and convenience now enjoyed by Europe and Brazil.”
“Adding a North American facility is a remarkable milestone for our company,” said Dr. Christina Zech, Managing Director of Faber-Castell Cosmetics. “Illinois now joins Brazil and Germany on our list of production sites. The strategic location in between the coasts along with the exceptional workforce Illinois boasts made it a natural choice for our next facility.”
The German company’s state-of-the-art $9 million manufacturing plant in Elgin will create 50 full-time jobs.
“Growing our foreign direct investment is essential to improving our economy and maximizing our potential,” said Mark Peterson, President and CEO of Intersect Illinois. “Germany remains one of our greatest FDI partners, and the Faber-Castell facility is the next chapter in our rich and shared economic history with German manufacturing here in Illinois.”
German firms alone employ 36,702 Illinoisans at 847 different locations, making Germany Illinois’ third largest FDI partner by employment. And Intersect Illinois is using that leverage to add even more German firms to the states’ FDI.
In the third quarter of 2018, HARTING, a German manufacturer of products for the connector industry for use in mechanical and plant engineering, broadcast and entertainment, factory automation, power generation and distribution as well as industrial electronics and telecommunications, announced a new investment in the state. The company already employs 112 people at their North American Headquarters in Elgin, and the new $6 million facility expansion will include the addition of a lab and showroom to the on-site warehouse and distribution center as well as increasing capabilities for injection molding and die-casting processes. The project is slated to create at least 50 new jobs.
“Illinois was the right fit for this new expansion due to the unrivaled workforce and strategic location,” said HARTING North America President and CEO Jon DeSouza. “We are proud of our contributions to Illinois’ manufacturing legacy, and this next phase in our journey will only build upon our current successes within the North American market.”
But Germany is not the only country that contributes greatly to Illinois’ FDI. The top countries for FDI in Illinois include UK, Japan, Germany and Canada. Foreign companies are definitely attracted to Illinois because other companies from their countries have roots there. That’s why Intersect Illinois is active in numerous Illinois business groups that represent these countries and builds strong relationships to continue to attract business from these countries. Through proactive outreach, Intersect Illinois’ project pipeline has nearly quadrupled over the past year; the team currently is working on nearly 100 business attraction projects, more than 50 percent of which are FDI projects.
LOUISIANA: AN FDI POWERHOUSE
Louisiana has become a haven for foreign companies, ranking No. 2 in the U.S. for per capita FDI, and attracting more than $102 billion in FDI in the past decade. Since 2010, FDI employment in Louisiana has grown more than 20 percent, according to the Organization for International Investment, and supports 68,000 jobs in the state. Louisiana’s infrastructure, geography, productive workforce and business-friendly climate combined to shape those site selection decisions.
Louisiana’s reputation as an FDI destination grew in 2018, as new projects valued in the billions of dollars progressed across the state. Companies from China, Japan, Germany, Australia and Argentina were among the international investors announcing projects in advanced manufacturing, green energy, food processing, petrochemicals and other sectors of the Louisiana economy.
“FDI operations—from Shell and BASF, to Shintech and Sasol, to Benteler and Dyno Nobel—have pumped many billions of dollars in capital projects alone into our economy in recent years,” Gov. John Bel Edwards said. “They are among the 500 foreign-owned companies operating in Louisiana that are directly responsible for 74,300 jobs in our state. In an era of increasing globalization, it’s essential for us to show leadership and support of foreign direct investment in Louisiana in a positive, open and fair manner.”
Situated on the Mississippi River between Baton Rouge and New Orleans, St. James and Iberville parishes are among the top 10 counties in the U.S. for FDI, and they represent significant aspects of the overarching FDI success story across Louisiana.
Among the largest players is Formosa Petrochemical Corp., which selected St. James Parish for a $9.4 million ethylene complex in 2018. Based in Taiwan, Formosa acquired 2,400 acres in St. James Parish through its FG LA subsidiary for developing the chemical complex in multiple phases during the next decade. The project will create 1,200 new direct jobs and will result in 8,000 additional new indirect jobs.
Also in St. James Parish, China-based Yuhuang Chemical Inc. is pursuing a $1.85 billion, world-scale methanol manufacturing complex. The Louisiana firm is a subsidiary of one of China’s leading chemical companies, Shandong Yuhuang Chemical Co. Ltd., and is completing the Louisiana project with its joint-venture partner, Koch Methanol Investments LLC. Under construction on the west bank of the Mississippi River, the YCI Methanol One project is 52 percent complete and will boast a capacity of 1.7 million metric tons per year.
“The decision by Koch Methanol to invest in YCI Methanol sends a clear signal to the industry about the strength of this facility,” said Dr. Charlie Yao, the CEO of YCI. “The new facility is located in a region with convenient access to natural gas, a highly skilled workforce and world-class transportation infrastructure, allowing us to be very competitive in our production and distribution. If viable, there is also sufficient land to add a second and third plant.”
Across the Mississippi River on the east bank, Wanhua Chemical Group Ltd. of China chose St. James Parish for a $1.25 billion chemical manufacturing project that will result in 1,230 new permanent jobs. Wanhua’s 250-acre site will produce MDI, or methylene diphenyl di-isocyanate, a product used in automotive, appliance, textile and electronics manufacturing.
Upriver in Louisiana’s Mississippi River industrial corridor, Louisiana Economic Development and Iberville Parish attracted a $1.49 billion expansion in chlor-alkali and plastics production by Shintech Louisiana LLC, a subsidiary of Japan-based Shin-Etsu Chemical.
Announced in July 2018, the latest Louisiana project for Shintech—the leading U.S. producer of PVC plastics—will result in 700 new direct and indirect jobs, and completes a cumulative $6 billion investment by the company in Louisiana during the past 15 years.
“We are pleased to proceed with this project and are going to carry out the construction at full throttle,” Shin-Etsu Chemical President and Director Yasuhiko Saitoh said. “This investment builds on our local and global sales capabilities, and aligns with our long-range plan to leverage our economy of scale in the U.S. for production of PVC and caustic soda. We are extremely grateful to Louisiana state and parish officials and our neighbors, whose strong support and understanding has enabled Shintech’s continued growth and success in Louisiana.”
Louisiana’s FDI is broad-based and located throughout the state. Like the Mississippi River region, Southwest Louisiana has developed a substantial industrial base that has proven attractive for international investments. Near Lake Charles, Lotte Chemical and Westlake Chemical dedicated a chemical complex that represents a joint investment of more than $3 billion, with production of ethylene and monoethylene glycol. Based in South Korea, Lotte moved its U.S. headquarters from Houston to Lake Charles in conjunction with the expansion.
At a nearby greenfield site in the Lake Charles area, South Africa-based Sasol has invested more than $11 billion in a seven-plant chemical complex that is among the largest manufacturing sites ever developed in Louisiana. The ethylene-based plants began being commissioned in late 2018 and continues to come online, with Sasol expanding its direct employment from 400 to 1,000 jobs. Through the project, Sasol generated 6,000 construction jobs and will see its investment result in 2,400 permanent new indirect jobs in Southwest Louisiana.
In Southeast Louisiana, LM Wind Power of Denmark, the world’s largest maker of turbine blades that power wind energy, announced it will develop a Technology Center for the Americas at NASA’s Michoud Assembly Center, in New Orleans. Owned by GE Renewable Energy, the firm will retain 45 jobs and create 100 new professional jobs.
“The NASA campus offers world-class logistical support, including port facilities that enable the company to move large equipment into and out of our expanded research facility,” said LM Wind Power CEO Duncan Berry, who cited Louisiana’s workforce training partnerships as a key advantage.
Major FDI activity extends to Louisiana’s Northeast and Northwest regions as well. Germany-based DHL joined Graphic Packaging International in a $274 million carton folding plant and logistics expansion in Monroe, with Graphic Packaging also completing a paper mill modernization in West Monroe. And in Shreveport, Benteler Steel/Tube of Germany invested $975 million in a seamless steel tube manufacturing facility, creating 675 new direct jobs; Benteler’s parent company, Benteler AG, is headquartered in Austria.
PETROCHEMICALS ARE ATTRACTING FDI TO EDMONTON METRO REGION
Edmonton is the capital city of the Canadian province of Alberta, and the closest major city to Alberta’s oil sands—the third-largest oil reserves in the world. Alberta’s oil sands are projected to generate nearly $1 trillion worth of capital and operating expenditures between now and 2030, and Edmonton serves as the manufacturing, construction and transportation hub for much of that economic activity. Alberta’s Industrial Heartland is one of the world’s most attractive locations for chemical, petrochemical, oil and gas investment. It also is Canada’s largest hydrocarbon processing region. The region’s 40+ companies, several being world scale, provide fuels, fertilizers, power, petrochemicals and more to provincial and global consumers. It’s an obvious draw for foreign companies in the petrochemicals field and in fact, one of the region’s largest current FDI projects is Pembina Pipeline Project, which is a $4.5 billion joint venture between the Pembina Pipeline Corp. and Kuwait’s Petrochemical Industries Co. to build an integrated propane dehydrogenation plant and polypropylene upgrading facility to turn propane into plastic.
The project is part of a resurgence in spending on industrial chemical industry projects in Canada. A recent members survey by the Chemistry Industry Association of Canada projected capital spending would jump by 65 percent to $1.9 billion this year, the highest since $2.2 billion in 2014 and third-highest in a decade. The survey suggested employment would rise by about 4 percent or 640 jobs to 17,670 in 2019. As a designated Foreign Trade Zone, Edmonton is the key transportation and supply chain hub for the energy, manufacturing and industrial sectors in Western Canada.
“Together with business leaders, we are building on our strengths in energy, petrochemicals, agri-business, forestry, life sciences and tourism, creating a stronger, more diversified Alberta,” said then Premier of Alberta Rachel Notley.
To build on that growth, in 2018 the regional government created a new international investment and trade arm, Edmonton Global, with the help of a $2.3 million investment through Western Economic Diversification Canada. The Investment and Trade Program will boost the Edmonton Metropolitan Region’s business growth and competitiveness by identifying global opportunities, attracting foreign direct investment, supporting high growth small- and medium-sized enterprises and increasing market awareness of western Canadian products and services.
Edmonton Global is a new regional economic development organization that has unified all 15 regional municipalities to undertake the mission of strengthening global competitiveness, growth and innovation in the Edmonton Metropolitan Region. The Edmonton Metropolitan Region, which accounted for 30 percent of Alberta’s GDP in 2016, is the second fastest-growing region in Canada.
“This funding from the Government of Canada into the International Investment and Trade Program, will enable Edmonton Global to aggressively position our value proposition and drive investment across the Edmonton Metro Region,” said Malcolm Bruce, CEO, Edmonton Global “The funding will have immediate and tangible impact on the economies of all 15 municipalities who are shareholders of Edmonton Global.”
Foreign direct investment in Canada increased by $17,199 million (CAD) in the fourth quarter of 2018, and it’s not all in the petrochemical field. The Edmonton metro region is among the youngest, best educated and fastest growing regions in Canada. Innovation is driving this region’s economy. A world-leading artificial intelligence (AI) R&D cluster is fast emerging in the heart of Edmonton, Canada’s fifth biggest city thanks in large part to its world-class universities. Its innovation corridor stretches from the Northern Alberta Institute of Technology through the downtown core to the University of Alberta. Alberta Machine Intelligence, a research institute associated with the University of Alberta, features in the country’s national strategy for this type of research. The university is second in the world for academic papers and research on AI and machine learning, according to CSRanking.org, an international ranking of computer science research institutions.
“The city is becoming recognized internationally for the excellence of its research on ‘reinforcement learning.’ It is becoming a gravity well for talent and companies in the AI field. Important research in biotechnology and health sciences, and in clean technology and renewables, is also taking place here,” said Glen Vanstone, vice-president of Enterprise Edmonton at Edmonton Economic Development Corporation (EEDC).
The city of Edmonton has six major public tertiary institutions, creating a vast talent pool of more than 100,000 students with a significant number of graduates in engineering, machine learning, medical sciences, law and skilled trades. It is home to 1300 companies in the ICT sector, employing about 19,000 people.
In 2017, one of the world’s leading artificial intelligence companies DeepMind Ltd, Google’s high-profile AI research firm, set up headquarters in Edmonton, signaling a boon for the city’s science and technology sector.
DeepMind co-founder and CEO Demis Hassabis said of the decision, “DeepMind considers the capital region a key hub for AI research in Canada. Collaborating [with the University of Alberta] to open a lab feels like a natural extension of what we do here in London. The fact we’re doing so in Edmonton is a sign of the deep admiration and respect we have for the Canadian research community.” The satellite office, named DeepMind Alberta, will work in close partnership with the University of Alberta.
“Edmonton’s an obvious choice,” Google Canada communications head Aaron Brindle said. “It’s quickly becoming a primary mover in the global tech community. I think that’s a real testament to not only the great research that’s happening here, but also the great expertise and the growing ecosystem that’s clearly emerging.”
This type of intelligence hub is a primary reason many innovative companies are choosing the region for R&D lab facilities. “Great minds attract great minds,” said Mario Nascimento, professor and chair of the University of Alberta’s department of computing science. “As a global leader in AI research, the university’s many excellent professors and researchers produce leading-edge scientific discoveries and play a vital role in attracting and retaining top AI talent and companies to Edmonton.”
The Alberta Machine Intelligence Institute (Amii) is one of the top AI research institutes in Canada and has partnered with the University of Alberta and Google DeepMind to develop AlphaGo. They were one of the main reasons South Korea’s artificial intelligence (AI) service firm MINDs Lab chose Alberta for its North American expansion. MINDs Lab has become an official member of, and plans to proceed with collaborative research with Amii researchers for three years. As South Korea’s leading AI company, MINDs Lab has worked on major AI projects inside and outside of Korea, and has Samsung Electronics, Daegu Metropolitan City and KEB Hana Bank as its clients. Starting with its membership in Amii, MINDs Lab said it plans to expand its R&D capacity to compete in the global market and expand its business overseas, focusing on the North American market.
JEFFCO: BUILDING RELATIONSHIPS
Colorado has a strong international presence with almost 87,000 employees working directly for foreign-owned companies. Jefferson County, which is on the west side of the Denver Metro Area offers a strong manufacturing presence, as well as strong aerospace, bioscience, energy and aviation industries. Jefferson County is home to international companies such as Pilatus Business Aircraft Ltd., Hestra Gloves, Terumo BCT and more.
In fact, Pilatus Business Aircraft Ltd.’s recent expansion resulted in an addition of over 200 new jobs in the county and the construction of a new 118,000- square-foot facility. Headquartered in Stans, Switzerland, Pilatus Business Aircraft Ltd. is the only Swiss company to develop, produce and sell aircraft to customers around the world. Pilatus’ new facility in Broomfield, CO is custom-designed to conduct aircraft interior and exterior completions for all Pilatus PC-12 NG and PC-24 aircraft. Jefferson County is thrilled to be helping to produce the latest aircraft, PC-24— the world’s first ever business jet for use on short unprepared runways.
“We are proud to be able to continue producing and supporting the industry’s highest quality aircraft here in Colorado,” said Thomas Bosshard, President and CEO of Pilatus Business Aircraft Ltd. “Over the past 20 years we have built up a tremendously talented workforce that maintains the high quality standards set by our Swiss parent company.”
The key factors in Pilatus’ decision to expand in Colorado, are also the factors many foreign companies note when choosing Colorado for expansion and relocation. These include the state’s strategic location between Canada and Mexico, a competitive supply chain, low energy prices, the state’s competitive business tax structure and an economic development incentive program that rewards investment and innovation. Colorado offers one of the lowest income tax rates in the U.S. at 4.63 percent. There is a strong Swiss presence in Colorado. In fact, Swiss-based companies have the 5th largest FDI in the state of Colorado. When it comes to workforce, Colorado has the 2nd most highly educated workforce in the nation. Colorado also ranked 5th among states for aero- space manufacturers in 2018, its highest ranking in the five years that accounting giant PricewaterhouseCoopers has con- ducted the study. Add to that the fact that the cost of living is 30 percent less than east and west coast cities, and you have a winning formula for FDI.
The Colorado lifestyle offers 300+ days of sunshine every year and access to 52,000 acres of county land preserved as open space, 28 parks, 210 miles of trails and 107,000 acres of national forests. All of these lifestyle factors are attractive to foreign corporations. Jefferson County also is a prime location for FDI due to its ability to offer strong relationships with research institutions and organizations such as the National Renewable Energy Laboratory and the Colorado School of Mines. Jefferson County offers access to other countries through Denver International Airport’s 170 direct daily flights and 25 international destinations.
In an effort to continue to build strategic relationships that will result in FDI opportunities, Jeffco EDC has engaged in a number of trade missions and hosting of international delegations in Colorado. Jeffco EDC delegates have traveled to Southeast Asia, Germany and Spain in the past 10 months and Jefferson County also hosted a delegation from Germany in an effort to establish partnerships and opportunities for FDI.
The trip to Southeast Asia resulted in an investor from Seoul Korea visiting Jefferson County two months later in an effort to find a company to invest in. The investment firm is considering a number of options.
The relationships developed with foreign ambassadors also resulted in a company by the name of Astroscale choosing Colorado for its North American operations and bringing 54 jobs at an average salary of $108,000.
Jeffco EDC also participates and sponsors events through the Select USA Trade Show, and is applying to be the host community for the 2020 American Competitiveness Exchange on Innovation and Entrepreneurship through the U.S. Department of Commerce. President & CEO, Kristi Pollard has been selected as a delegate to the 2019 American Competitiveness Exchange in Puerto Rico and looks forward to establishing partnerships and making relationships there that may result in opportunities for FDI. County officials also are ensuring that they have the infrastructure in place to support companies that may be importing and exporting, by applying to be Colorado’s newest Foreign Trade Zone.
CHARLOTTE: AN FDI FORCE TO BE RECKONED WITH IN NORTH CAROLINA
With 1,041 international firms in the region, representing 45 different countries and employing more than 66,000 people, it’s clear Charlotte, NC is a force to be reckoned with in terms of FDI. But then Charlotte is really positioned wonderfully for international trade. The region has 13 international honorary consuls, including Austria, Canada, France, Germany, Great Britain, Guatemala, Hungary, Ireland, Italy, Mexico, Moldova, Nicaragua and Switzerland. There are 245,000 foreign-born residents according to the U.S. Census. It is home to Charlotte Douglas International Airport, the 7th busiest airport in the world which has more than 173 nonstop flights, including 34 international destinations.
The Charlotte Regional Business Alliance even includes two international staff members from Germany and China respectively, who are integral to cultivating international relationships. And in 2018 The Alliance established an Inter- national Advisory Council (IAC), comprised of local business leaders with inter- national business ties and relationships to support their economic developers with introductions and lead generation.
The Alliance staff maintains strong working relationships with several inter- national organizations in the city, including the World Affairs Councils, Mayor’s International Cabinet and International House among other organization and personal relations with ties to the international community domestically and abroad. The Alliance also will participate in SelectUSA in June 2019.
Charlotte offers a nurturing climate for regional, national and international companies of all sizes. The area’s high quality of life, reasonable cost of living, world-class arts, major league sports and educational and advancement opportunities attract talented people from around the globe. Charlotte offers exceptional air service, a foreign trade zone, transparent government and business practices and numerous non-profit organizations that focus on international business, foreign policy and global culture.
In terms of location, its time zone is only six hours different from central Europe, making communication easier. On top of that, it’s only a two-hour flight or 12-hour truck haul to more than half the U.S. population. These two factors give foreign corporations access to the best of both worlds, Europe and the U.S.
And if you’re looking for great access to business, there are more than 425 companies that have their headquarters in Charlotte, including 15 Fortune 1000 corporations. In fact, the Charlotte region has two times the national average of people working in headquarters operations according to the U.S. Bureau of Labor Statistics. It’s no wonder that finance, technology, energy and manufacturing companies, among others, have made Charlotte their global or North American home. Another 250-plus house their regional headquarters in the region. The city also is the second largest banking center in the nation.
Charlotte is proud of its diversity of industry representing FDI. The manufacturing/ advanced manufacturing sector has strong representation with a wide spectrum of businesses represented in this cluster. About half of the region’s FDI companies are manufacturers, and another 20 percent are in wholesale trade or transportation and logistics. Within manufacturing, it has particular strengths in auto parts, metal working, plastics and advanced textiles. Many international manufacturers find Charlotte an ideal place to start a sales office, because of its lower costs of doing business. Those lower business costs include the North Carolina corporate income tax, one of the lowest on the East Coast at 2.5 percent.
International companies from around the globe are investing in the region with new U.S. locations and expansions of their existing Charlotte facilities for good reason. In fact a number of them announced new projects this time last year.
Yokohama Tire Corporation, a subsidiary of Tokyo-based The Yokohama Rubber Co. Ltd., announced plans in April 2018 to locate an R&D facility in Mecklenburg County. The Cornelius facility will create 56 jobs and generate $5.85 million investment for the area.
“Cornelius is a great fit for our company,” said Tetsuya Kuze, VP of Yoko- hama Corp. of North Carolina. “The proximity to the airport and the skilled workforce is going to make this facility very successful.”
That same month, HangCha America, the American division of China’s largest forklift truck manufacturer, announced it would open its U.S. headquarters in Charlotte. The location serves as a sales office and showroom as well as a customer service and warehouse location.
“Charlotte is a perfect location for us logistically and geographically,” said Yiping Wang, vice president of HangCha Group. “The U.S. headquarters location will allow us to be close to customers while also better serving existing and potential customers’ needs. Communication will be more efficient, customer service will be more hands on and we will be immersed in this market more than ever.”
Adding to the region’s corporate headquarters growth, German-based company, KURZ, a worldwide leader in hot stamping and coating technology, announced plans last April to build its North American headquarters in Huntersville, NC. KURZ will invest more than $18 million in the new facility and plans to hire 90 new positions by 2022.
“Businesses expect a certain amount of basic infrastructure to be in place before they will even consider a site,” said Thomas Hertlein, CEO of KURZ USA, “but after visiting Huntersville and meeting with neighboring companies, we knew this would be a great place for our North American headquarters. I would like to thank the Town of Huntersville, Mecklenburg County and the state of North Carolina for all their assistance in this process.”
In February of this year, Porta North America, a subsidiary of Italy-based Porta-Solutions S.p.A., announced they will relocate their North American head- quarters to southwest Charlotte. In addition, the company is expanding its U.S. business operations with the opening of a North American Training Center for Flexible Production. The facility will offer training in Lean Manufacturing practices for customers as well as any company in the production metal cutting industry, enabling them to better compete in the world marketplace. The expansion and relocation will create more than 25 new jobs and a $3.5 million capital investment.
“The Charlotte region was selected for several reasons, including the world- class airport, strong economic growth and especially the skilled workforce,” said Maurizio Porta, CEO of Porta-Solutions. “We are excited to work closely with the area’s technical schools to establish a collaborative relationship that will be both beneficial to our training center and the community.”
AUTO SECTOR DRIVES FDI IN ALABAMA
Since 1993, when Mercedes-Benz selected Alabama for its first U.S. auto assembly plant, Alabama has become a magnet for FDI. Mercedes-Benz’s success in Alabama served to build a foundation for future foreign investment in the state, and in particular, the international automotive industry has found a North American home base in Alabama. Since 2013, nearly $13 billion in foreign direct investment has poured into the state, bringing around 25,000 jobs. The state saw $3 billion in new foreign direct investment that accounted for at least 6,000 new or announced jobs last year. Most of that FDI has been in manufacturing, mainly in the automotive sector with companies from Germany, Japan and South Korea leading the way.
The automotive sector is a primary driver of job growth in Alabama. Besides Mercedes, Alabama now is home to auto assembly plants operated by Honda and Hyundai, along with a Toyota engine plant. Alabama’s four existing OEMs have invested around $11 billion in their Alabama operations, counting ongoing projects. The presence of these international industry leaders in Alabama transmits a strong signal about the state’s competitiveness to corporate decision-makers and site selection professionals around the globe. Alabama’s overall exports for 2017 reached a record $21.7 billion, thanks to the strength of automotive exports, as well as aircraft components, chemicals, paper and minerals. Alabama automotive exports have climbed 50 percent in the past decade, and represent over half of the state’s exports.
“We expect that by 2022, if the numbers hold and the forecast is true, Alabama will take the position as the No. 2 vehicle-producing state in the U.S.,” Canfield said.
The Birmingham region has been attractive to foreign companies with 81 companies representing 20 countries. The top three countries represented by Ger- many with 18 companies, Japan with 14 and Canada with 13. In 2017, seven foreign-based companies announced 900 jobs and $323.2 million in capital investment in Birmingham, representing
29 percent and 56 percent of announcements, respectively. In 2013, the federal government defined the Birmingham–Hoover, AL Metropolitan Statistical Area as consisting of seven counties (Bibb, Blount, Chilton, Jefferson, St. Clair, Shelby and Walker) centered on Birmingham.
Contributing to Birmingham’s attractiveness for FDI is the state’s considerable logistical advantages which include: three Class I railroads; five major inter- states—38 percent of the U.S. population is within a one-day truck trip and 76 percent of the U.S. population is within a two-day trip; Birmingham-Shuttlesworth International Airport currently operates 100 flights daily to 21 airports in 18 cities; the Port of Birmingham is just 30 minutes away from Downtown Birmingham and consists of an inland waterway with barge access to the Port of Mobile, Alabama’s deep-water port. Alabama also has one of the lowest business tax burdens in the nation, and national cost of living surveys show that the cost of living in the Birmingham region is only 90 percent of the national average, meaning it’s very affordable.
A chief reason that companies from around the world are interested in Alabama is the overall quality of the state’s educated workforce, excellent job-training programs and an extensive secondary educational system.
The Birmingham region is home to six of the 10 top performing school systems in Alabama. There are several technical and community colleges in the region such as Lawson State, Jefferson State and Bevill State that offer a multitude of career technical education opportunities with programs such as industrial electrical technology/maintenance, machine tool technology, welding, robotics and many more. In addition, the University of Alabama at Birmingham is ranked in the top 25 among all National Institutes of Health funded universities in the country.
In the fourth quarter of 2018, Brian Hilson, President and CEO of the Birmingham Business Alliance (BBA) said, “By year’s end we expect the Birmingham region will surpass, for the first time ever, 4,000 announced jobs from core sector economic development projects. Similarly, capital investment for those companies should come in at just under $1 billion, which is one of our best years on record.”
In 2018, a number of foreign suppliers to the automotive industry and automotive manufacturers either announced expansions or completed construction on new projects in the Birmingham region, driving unprecedented job growth numbers in the region.
Mercedes-Benz U.S. International, one of the primary drivers of FDI in the region, recently broke ground on a battery plant in Bibb County. The plant will provide batteries for future electric SUVs under the product and technology brand EQ.
The battery plant is part of a $1 billion expansion Mercedes-Benz announced last year for its Alabama plant to set up electric vehicle production in the United States. The company also is building a new $248.2 million Global Logistics Center and a new after- sales North American hub on 278 acres in Bibb County, both providing a $307.9 million annual economic impact on the state and $285 million impact on the Birmingham region. With the battery plant, Mercedes-Benz said its Bibb County campus will employ at least 600 people.
German automotive supplier, Moeller Tech, officially opened its $46.3 million state-of-the-art manufacturing facility in Bibb County in March of last year. The 150,000-square-foot facility will employ up to 222 people.
That same month, Yorozu, a Tier 1 automotive supplier, opened its $110 million manufacturing plant in Walker County. The plant is expected to create 300 jobs by 2020, when full production is achieved. Yorozu produces metal stamped suspension components for automakers including Honda, Toyota and Nissan.
Autocar Trucks opened its new manufacturing plant in Center Point in April of 2018. The company is investing $120 million to open the plant, where its heavy-duty cab-over-engine trucks are built. The plant is located in a 1 million-square-foot complex spanning both Center Point and Birmingham and is home to 746 employees.
Automotive supplier Unipres announced in June that it will add 70 jobs and invest $40 million into its production facility in St. Clair County. The company specializes in stamping technologies, and its expansion will add a new hot stamping process.
In October, auto supplier Eissmann Group Automotive LLC completed its $14.5 million expansion in St. Clair County. The 130,000-square-foot building project added 200 jobs, making it the largest employer in Pell City with approximately 850 employees.”
JAMAICA: YOUR PLACE TO DO BUSINESS
Jamaica’s reputation as one of the premier global destinations for investment continues to rise, as discerning entrepreneurs increasingly seek to capitalize on the exciting business opportunities that abound in the country. Beyond its vibrant culture and natural beauty, Jamaica’s value lies in its business- friendly environment, educated and trained workforce, stable democracy, solid infrastructure and strategic location.
Ideally located in the center of the Caribbean, Jamaica is the largest English- speaking island in the region and the third largest overall. Abundantly endowed with natural resources such as rich mineral deposits of bauxite, high quality limestone and marble, the country covers a total area of 10,991 sq. km (4,244 square miles).
The island’s strategic location is further reinforced by the fact that it is within a four-hour flight radius of over half a billion of the world’s population across the Western Hemisphere.
Situated at the nexus of the major air and sea routes into the Caribbean Basin, Jamaica provides transnational corporations (TNCs) with a solid investment base for their Caribbean operations, which will allow them to seamlessly tap into the North and South American markets as well as the rest of the world.
In the capital city of Kingston, which is set against the backdrop of the majestic Blue Mountains, investors will discover a cosmopolitan center of commerce and culture that is globally connected and perfectly primed for business.
It is home to the world’s seventh largest natural harbor—Kingston Harbor—which enjoys significant maritime traffic due to its ease of access to the Panama Canal shipping lanes. Leveraging its port and logistics capacity and proximity to key markets, Jamaica is excellently positioned to become a major multi-modal logistics hub in the region, particularly given recent investments that have enabled the country to host post-Panamax vessels.
With its prime location providing excellent investment and trade opportu- nities and numerous incentives for international companies doing business with Jamaica, the Jamaican government focuses on five key sectors, which have great projects for investments:
- Business Process Outsourcing (BPO): Jamaica leads as the Caribbean’s ideal location for BPO investment. There are currently over 50 companies that offer BPO services in the country, and among these firms are global industry players such as Conduent (formerly Xerox), Teleperformance, Vistaprint, Hinduja Global Solutions and Suther- land Global Services (SGS) as well as home-grown entities such as ItelBPO.
- Tourism: Jamaica’s brand as a leading tourist destination provides the perfect setting for investment, boasting global hotel brands from across the world. The breathtakingly beautiful scenery, world-class accommodations and attractions, rich culture and signature warm hospitality of the people combine to give Jamaica an irresistible appeal. In 2017, Jamaica attracted more than 4 million tourists to the island.
- Logistics: With the expansion of the Panama Canal, Jamaica is poised to benefit from new and innovative commercial ventures as it seeks to position itself to join Rotterdam, Dubai and Singapore as the fourth node in the international logistics chain. The country’s location in proximity to major East-West shipping lanes and direct connections to all regional ports means Jamaica’s Logistics Hub will satisfy the demand for global-standard logistics capacity serving the Eastern Seaboard of the U.S.
- Agriculture: Jamaica is an ideal location for agricultural and/or agribusiness-related investment.The expansive local market bolstered by millions of visiting tourists annually, the increasing demand for high quality Jamaican produce overseas,
a network of trade agreements and the country’s proximity to key export markets gives investors the opportunity to earn high returns on their investment in the country.
- Manufacturing: With Jamaica being located at the hub of air and sea routes in the Caribbean, the country is ideally placed for export-oriented, niche manufacturing and assembly operations. Under the Jamaica Logistics Hub initiative, there will be significant opportunities for business interests to be integrated into the global supply chain, particularly in keeping with the natural resources of the country.
These sectors hold very profitable prospects, especially with duty free incentives on the importation of goods and products, income tax credits and other lucrative benefits for doing business in Jamaica. The country has a newly minted Special Economic Zone (SEZ) regime to encourage the creation of productive zones that have special concessions for investors. To complement this, Jamaica continues to make strides to improve its ease of doing business and global competitiveness.
The Jamaica Promotions Corporation (JAMPRO), Jamaica’s trade and investment promotion agency, assists clients with finding the best match for their trade and investment interests, assists potential investors with cementing their presence in the Jamaican market and provides support for investors to achieve their Jamaican investment and trade goals. The agency works with clients from all regions in the world, and has a customized approach to each sector, utilizing its network of Government business facilitators to meet all the needs of an investor.
JAMPRO is committed to working closely with local businesses to make them more competitive and export- ready, providing practical support, expert advice and access to technical assistance that will enable companies to expand their operations into new and existing markets. The agency prepares companies to provide the best products and services to export from Jamaica.
As Jamaica moves forward, JAMPRO aims to develop its relationships not only in the region, but the world. We are ready to partner with you on your business journey. To do business with Jamaica or to connect with JAMPRO, visit www.tradeandinvestjamaica.org.