Chinese textile executive plans SC plant

Charlotte ObserverDecember 16, 2013 

Economy

In this Oct. 25, 2012, photo, a sign attracts job-seekers during a job fair at the Marriott Hotel in Colonie, N.Y.

MIKE GROLL — ASSOCIATED PRESS

— The head of a Chinese textile company says he is bringing a new yarn factory and 500 jobs to Indian Land, S.C., part of what local officials call a growing trend of Chinese firms setting up shop in the Charlotte region.

Shang Qing Zhu, chairman of the Keer Group, a manufacturing company about two hours from Shanghai, told the Observer in a telephone interview that he is pleased to be bringing his company to the area.

Speaking through an interpreter, he said he plans to start construction in February. He was drawn to the area for the low labor costs, particularly in Lancaster County, and the fact that he found a good parcel of land close to major ports.

The company will invest $218 million to construct and operate a 230,000-square-foot manufacturing facility in Indian Land, according to the S.C. Department of Commerce. The industrial yarn-making operation is expected to produce 501 jobs within five years.

Zhu is also opening an office in uptown Charlotte to house engineering, financial and upper management functions. He said proximity to Charlotte’s strong financial sector bodes well for the company’s future growth in the region.

“We’re going to continue the relationship for a long time,” he said.

South Carolina Gov. Nikki Haley joined Lancaster County officials in trumpeting the announcement as one of the largest in the county’s history.

“This is one of the largest onshorings back to the U.S. of a textile operation in recent memory and we are grateful for the opportunity to partner with the company,” said Keith Tunnell, president of the Lancaster County Economic Development Corporation.

Zhu’s decision to build in Indian Land represents the latest example of a wider trend in which manufacturing jobs that were leaving the U.S. in droves for lower-cost Chinese locations are increasingly coming back.

With labor costs rising in China, experts say growing Chinese firms see less financial advantage to be gained by staying home.

In recent years, Chinese firms have been stepping up their presence in the U.S., buying everything from real estate to billion-dollar corporations such as the Smithfield pork producing firm in eastern North Carolina.

Chinese firms spent a record $12.2 billion in the first nine months of this year on projects and acquisitions, according to the Rhodium Group, a firm that tracks Chinese investments.

Zhu said that in his experience, most Chinese manufacturing firms looking to go outside of China head to other Asian countries. His firm, he said, is one of the first Chinese textile firms to come to America.

The firm’s announcement capped what Tunnell described to Lancaster County Council last week as a fierce competition between the two Carolinas and several Northeastern states.

The Charlotte Chamber’s corporate recruiting specialist for Asia, Eileen Cai, said she worked for about two years with Keer, but the company was able to find a plant site more suitable to its needs in Lancaster County.

She said even though Charlotte didn’t get the factory, the Queen City’s airport and financial section provided a strong part of the attraction for Keer officials. She said the project will help attract other Chinese companies to the Charlotte area.

“We see this as a win-win for the region,” said Cai, who interpreted for Zhu during his telephone interview with the Observer.

South Carolina officials said Chinese firms represent a growing part of their business community, noting that China provided the fourth-highest amount of foreign-direct investment in the Palmetto State, behind Germany, Japan and France.

There are 23 Chinese companies in Charlotte now, said Jeff Edge, senior vice president for economic development with the Charlotte Chamber.

That’s fewer than Germany, which had 127 firms in Charlotte as of 2012; but this year, more potential relocation or expansion projects have come out of China than Germany.

“We see many good activities coming from China,” said Cai, a Shanghai native.

Chinese textile firms especially know the Carolinas “are famous for the textile industry,” she added. “When they look for U.S. operations, they automatically think about this region.”

The Keer Group says on its website that it employs more than 2,000 people in China and has total assets of 2.2 billion yuan, or $370 million.

Zhu said he expects to come to the area in February, and hopes to someday buy a house here.

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