The Carolinas Cultivate
Their Stronger Sectors

Jan. 16, 2004 -- One would be hard-pressed to find a company that can match the expansion streak of Fuji Photo Film's Greenwood, S.C., operations.

The Japanese-owed company came to South Carolina's Upstate region in 1988 with the company's first U.S. factory for production of pre-sensitized plates for the graphic arts market. Expansion has been virtually nonstop ever since. Headquarters for the company's North American research-and-development effort, the Greenwood site, is Fuji's largest, encompassing more than 2.5 million square feet on a 500-acre site.

"We've been here 15 years and there's been just two months when we were not under construction," says Craig White, vice president of corporate communications at the Greenwood complex. Actually, in 15 years, the site has seen 15 expansions. Of course, not all have been major enlargements, but the past two represent a total investment of more than $400 million.

The latest project is a $100-million expansion of production of computer-to-plate printing capacity. The expansion is the first of the 15 not to create new jobs, as employment at the Fuji complex will remain at its current level of 1,500 when it comes online this summer. The line will produce printing plates for a variety of uses, including calendars, posters, annual reports and magazines.

"Fuji tends to put manufacturing capability close to its customers, and the U.S. is the largest single market for all of Fuji's products," Mr. White says. As far as Fuji is concerned, it's been a picture-perfect relationship with Greenwood and South Carolina.

"It's been a wonderful friendship over the years with local and state government and economic-development agencies being incredibly supportive," Mr. White says. "Every time we do an expansion, we're in competition with other Fuji sites in Japan and Europe. We have to make a good business case every time."

The Carolinas continue to revamp and diversify their economies as they try to weather the storm that has seen much of their traditional manufacturing base, especially in textiles, unravel over the past three years. North Carolina has lost nearly 30,000 textile jobs since the start of 2001. South Carolina lost 4,200 textile jobs during the year running from September 2002 to September 2003. Both states see various forms of high technology as their salvation.

North Carolina Digs Early JDIG Results

North Carolina state officials are touting their latest economic-development tool, the job development investment grant program (JDIG), giving it credit for bringing in 1,580 jobs and $50.5 million in investment during a six-month period (May to October) in 2003. Created by the General Assembly in 2002, JDIG provides grants to new and expanding companies deemed "strategically important."

GE Nuclear Energy is the latest grant recipient, taking $5.9 million over nine years to move from its Silicon Valley home in San Jose, Calif., to Wilmington. A unit of General Electric Power Systems, GE Nuclear Energy will be expanding its existing facility in Wilmington and will create 200 jobs.

Charlotte is the new home of the headquarters of General Dynamics Armament & Technical Products (GDATP), a unit of General Dynamics Corp. GDATP moved its headquarters from Burlington, Vt., in September and will establish a light manufacturing operation in the Charlotte area this year. GDATP chose Charlotte from among 10 cities. The company may receive up to $5.9 million over 10 years if it makes good on its promise to create 405 jobs.

Other companies receiving JDIG grants thus far:

• Global aerospace and defense systems supplier Goodrich Corp. expects to add 125 to 150 jobs by late 2004 to staff a customer services facility in Monroe, near the company's Charlotte headquarters. The Monroe facility will serve as a major repair and manufacturing site for various Goodrich aerospace systems.

• R.H. Donnelly Corp. is moving its corporate headquarters to the Raleigh-Durham area, creating 275 jobs. The company could receive up to $4.3 million over 10 years if it meets job creation targets. (See cover story, November 2003.)

• Infineon Technologies was the first company to cash in on JDIG by agreeing to locate its East Coast base in Cary. The semiconductor company could receive as much as $9.5 million over 11 years if it meets job creation requirements. The company plans to create 400 jobs at salaries averaging more than $75,000.

Lowe's Campus Becoming a Magnet For Suppliers

Lowe's Companies, the second largest home improvement retailer, opened the first phase of its new corporate campus near I-77 in Mooresville in September 2003. The first facility, a 400,000-square-foot structure the company describes as its Customer Support Center, is home to 1,300 employees, many moving from the company's long-time headquarters in North Wilkesboro.

While various published reports have the complex eventually growing to 1.2 million-square feet, company spokeswoman Chris Ahearn says plans call for an eventual development of a campus, but future growth will be on an as-needed basis. Estimates place eventual employment at the 175-acre site at 8,000.

Meanwhile, Lowe's vendors are already lining up to locate nearby. Melanie O'Connell Underwood, executive director of economic development for the Mooresville/South Iredell Chamber of Commerce, estimates 300 to 400 of the company's vendors may eventually move some type of operation to the area.

"We're expecting a lot, but it won't be a mad rush all at once," says Bob Palmes, vice president of business development for G.L. Wilson Building Co. in Statesville. G.L. Wilson is building a $1.5 million, 21,300-square-foot building for DDP Holdings Inc., a holding company whose subsidiaries supply store racks and displays for Lowe's. "Vendors like to be close or at least have an office close."

Building a Bio Work Force

Already a tier-one biotechnology state, North Carolina has taken another step forward with the commitment of $64.5 million to train biomanufacturing workers. The Golden LEAF Foundation, which provides grants for economic development activities from the state's tobacco settlement with cigarette manufacturers, committed up to $60 million, while the North Carolina Biosciences Organization (NCBIO) has pledged up to $4.5 million in in-kind contributions of equipment and other resources. The North Carolina Biotechnology Center surveyed biomanufacturing companies throughout the state to determine future training and employment needs.

"This initiative was tailored to meet those industry needs," says Leslie Alexandre, president and CEO of the Biotechnology Center. "We're determined that North Carolina will have the world's best-trained work force for biomanufacturing."

North Carolina State University will receive the biggest share - $36 million - to build and equip a central biomanufacturing facility to train workers. North Carolina Central University in Durham will receive $19.1 million to establish graduate and undergraduate degree programs in applied process research. The North Carolina Community College System will get $9.4 million to recruit and train workers and to serve as a feeder system to the NCSU and NCCU programs.

Upstate Automotives Still on the Uptick

South Carolina's Upstate region is already an automotive nerve center, with BMW in Greer, 39 Tier-1 suppliers and many Tier-2 and Tier-3 suppliers. The area may shift into the fast lane with Clemson University's development of a $40-million auto-research park in Greenville, which is expected to attract even more automotive investment.

One of the sectors of the beleaguered U.S. textile industry that may actually see some positive news in coming years is the myriad of textile products going into automobiles. Suminoe Textile Co. Ltd., of Osaka, Japan, chose Gaffney, at the northern end of the state's textile belt, to place its first U.S. automotive facility. Suminoe, a tufted carpet specialty manufacturer, will invest $30 million in an existing 220,000-square-foot building near I-85 and plans to hire 130.

The Suminoe deal was in the works for about two years before being announced by Gov. Mark Sanford and Commerce Secretary Bob Faith during their trip to Japan in October 2003.

A recent auto industry supplier lighting in the Upstate is Fraenkische, a manufacturer of corrugated plastic tubing. Headquartered in Koenigsburg, Germany, Fraenkische's U.S. operations were just a small sales office in Atlanta until late 2000. That's when the company purchased three production lines from Delphi Packard. The deal gave Peter Winkler, vice president of sales and engineering, just four months to find a suitable building to begin operations.

Mr. Winkler says the company looked at sites in Georgia and in Laurens, S.C., before finding an empty 41,000-square-foot building in Anderson near I-85. A quick refitting allowed Fraenkische, a Tier-2 and Tier-3 supplier, to begin manufacturing last April. Products are eventually used in Ford, DaimlerChrysler and BMW vehicles. The company currently employs about 20, but plans to grow to 50 within four years as it adds production lines.

Mr. Winkler says state and local incentives, including job development credits, were among the considerations in moving to Anderson, but he says the community seemed a good fit, too.

"We always have the feeling it is a family here and everyone knows everyone," Mr. Winkler says.

-- Site Selection Magazine is the official publication of the Atlanta-based Industrial Asset Management Council.

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