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WilmingtonBiz Magazine

How Brunswick County Nabbed A $650M, 500-Employee Plant Deal

By Emma Dill and Cece Nunn, posted Dec 14, 2023
The power of persuasion: Brunswick BID executive director Bill Early talks about the Epsilon project. (Photo by Daria Amato)
They could have driven their business almost anywhere. 

After looking at more than 100 sites in the U.S. alone and spending a year in talks with North Carolina officials, an electric vehicle component manufacturer chose Brunswick County for its first facility outside India. Epsilon Advanced Materials plans to invest $650 million in a 1.5 million-square-foot facility and hire 500 workers to make graphite for lithium-ion batteries, the company announced this fall.

A year ago, Epsilon officials contacted North Carolina economic development leaders about locating their new facility in the state. Brunswick County connected with Epsilon when Brunswick Business & Industry Development, which works to recruit businesses to Brunswick County, submitted a proposal to the Economic Development Partnership of North Carolina outlining the available site in the Mid-Atlantic Industrial Rail Park.
 
As the company evaluated its site options, Brunswick BID executive director Bill Early and his staff communicated with Epsilon through state officials to share additional details about the Brunswick County site. Once Brunswick County was selected as a finalist for the facility, the company began working more directly with Brunswick BID. Early said the county knew it was a finalist for the plant about four to five months before the October announcement. 

According to Early, Epsilon officials visited the site three times before selecting Brunswick County over another location in Tennessee. The company also had direct conversations with Duke Energy to ensure the site off U.S. 74 could supply the large amount of electricity needed to power its operations.  

“When we looked at what we needed, which was a good workforce, really good work environment, industry-ready site, a power-ready site, Brunswick County was really attractive,” said Vikram Handa, managing director of Epsilon Advanced Materials.

He said the site’s access to rail, proximity to the Port of Wilmington and outlook for workforce training programs were additional factors.

In conversations with company officials, Early also tried to emphasize one of the characteristics that officials say have made Brunswick County one of the fastest-growing counties in the state. 

“One thing that we did try to sell them on is the fact that we’ve got a good quality of life here in the area that will help them in attracting and retaining key employees,” he said. 


UPPING THE ANTE


State officials are offering Epsilon millions of dollars in incentives through North Carolina’s Job Development Investment Grant (JDIG) program to make good on its promises. 

“Using a formula that takes into account the new tax revenues generated by the new jobs, the JDIG agreement authorizes the potential reimbursement to the company of up to $3,443,250, spread over 12 years,” state commerce officials said in a news release in October.  

According to the state, the payments are performance-based and only made when North Carolina’s commerce and revenue departments verify that Epsilon has met its job and investment targets.  

The bucks don’t stop with the JDIG grant. 

The Golden LEAF Foundation, a nonprofit organization founded in 1999 with proceeds from the state’s 1998 settlement with cigarette manufacturers, is providing $3 million to lay some additional groundwork for Epsilon. The money will be used to construct a 1-million-gallon elevated water tank at the Mid-Atlantic Industrial Rail Park. 

In addition to applying for the Golden LEAF grant and accepting the funds, the Brunswick County Board of Commissioners approved paying nearly $19 million for 539 acres in the Mid-Atlantic Industrial Rail Park in anticipation of Epsilon’s announcement. 
 

LEARNING NEW SKILLS


Giving Brunswick County residents the skills they’ll need to work at the Epsilon plant falls to Brunswick Community College and will require new training programs, said Greg Bland, the school’s vice president of continuing education, economic and workforce development. 

“They have a very unique product and a unique process that not many people know about,” Bland said about Epsilon. “The creation of graphite is something that is unique, and it’s the first time for Brunswick County.” 

To prepare to train workers, Bland said the community college will have to do three key things. First, community college leaders and instructors must undergo electric vehicle fundamentals training and certifications to prepare them to teach students. 

The college also plans to collaborate with other community colleges across the state that offer training programs related to the electric vehicle industry. Finally, community college officials plan to visit other electric vehicle-related training programs outside North Carolina, Bland said. 

“Obviously, we’re good with the fundamentals of customized training with onboarding, with preparing people for manufacturing and production and safety, we can do that,” Bland said. “But the process of making graphite with a chemical reaction and some of the specifics that are embedded in that company – that’s what we have to prepare for now.” 

The college also aims to employ the state-funded customized training programs offered to upskill workers when a new company comes to town. Once Epsilon releases a list of the types of positions it will employ, the community college will be able to start designing the specifics of its training program, Brunswick Community College President Gene Smith said.

“As they begin building their facility and getting ready to open, we’ll be working with them on what their training needs will be and what skill set they want their workforce to have so that we can meet their needs,” Smith said. 

Training workers to fill the new jobs will be a regionwide effort. Smith said he’s had conversations with officials at Columbus County’s Southeastern Community College about the needed training, and Jim Morton, Cape Fear Community College president, said they, too, are watching the regional training needs. 

“No one school would be able to support the sudden growth of the (worker) supply,” Morton said. 

The state’s budget this year included funding for a Brunswick Community College workforce training center, expected to be built on U.S. 17, that could provide room to train potential Epsilon employees.

“They said they want to work with us to see what kind of skill sets we are looking for so they can kind of equip the training center with those (pieces of equipment) or those training modules,” Epsilon CEO Sunit Kapur said.

The idea would be for people “to come off those training modules and straightaway get on the job,” he said. 

Kapur and Handa said the company plans to break ground on its Brunswick County facility in 2024 and begin manufacturing in 2031. 


COURTING THE EV INDUSTRY 


With competition heating up for pieces of the electric vehicle market and its clean energy manufacturers, Gov. Roy Cooper lauded Epsilon’s decision to choose North Carolina.  

“They had a lot of options,” Cooper said during the Epsilon announcement Oct. 26. “And they chose us.” 

The governor noted other recent EV wins for the state, including a Toyota battery plant in Randolph County and VinFast’s electric vehicle manufacturing facility in Chatham County. 

“This great Indian company, Epsilon, will be joining our manufacturers’ supply chain for electric vehicles,” Cooper said. “In North Carolina, we will not only be making electric vehicles, but the charging stations, the semiconductors, the batteries and now the graphite for the lithium-ion battery.” 

The influx of investment across the Southeast in an electric vehicle supply chain stems from the passage of the sweeping Inflation Reduction Act last year. Among the federal law’s clean energy provisions are incentives for consumers – up to $7,500 in tax credits for buying an electric car. But those vehicles have to be assembled in the U.S. to qualify for the credit, prompting automakers and suppliers like Epsilon to focus heavily on supply chain buildouts domestically.

Consumer adoption and political changes could impact the EV industry’s anticipated route, but for now, billions of dollars from federal government funding and manufacturer investments are powering the ramp-up.

And those investments go beyond the automakers and battery manufacturers to the companies processing the component materials of EV batteries such as lithium, cobalt and – in Epsilon’s case – graphite.

Graphite can be manufactured from coke, which is a fuel made from coal. Without graphite, electric vehicle batteries would not be able to produce electricity.  

According to Epsilon, 42% of all battery anode material comes from natural graphite flakes and 58% from synthetic graphite material. 

“Lowering battery costs is crucial in making electric cars more affordable since the battery pack accounts for half of the purchase expense, with the cells making up 70% of the cost, the graphite anode 15%,” Handa said. 

The prices of electric vehicles vary widely, but many of the models range from around $40,000 to more than $100,000. 

“You talk to any CEO of any car company, and they will tell you how they are falling all over themselves to get into the competition in the market for this, to get a priced vehicle that everyday families can afford,” Cooper said during the Epsilon announcement. 

Electric vehicle manufacturing is an up-and-coming industry with relatively high wages and considerable growth potential, said regional economist Mouhcine Guettabi, with the University of North Carolina Wilmington. 

Epsilon Advanced Materials’ projected 500 jobs are expected to come with an average wage of $52,264, officials said, adding that the average annual private sector wages for 2023 in Brunswick County is $46,464.  


IS IT ELECTRIFYING?


Today’s Mid-Atlantic Industrial Rail Park lacks buildings. But that could change quickly over the next few years.

“I believe once Epsilon locates there, and (companies) can see how infrastructure is being brought into the site, that will help with the visual marketing of the property,” Early said. “I believe that certainly will help build the foundation for other similar companies to consider Brunswick County for their businesses.”

Guettabi said attracting more employers would be a boom.

“Anytime you have an investment of that size, the hope is that it is going to encourage other companies in related industries to consider the Wilmington region to build a local supply chain and retain – at the local level – as much of the benefit as possible,” the economist said. 

Regarding indirect effects, Guettabi said, “The investment/jobs will reverberate through the rest of the economy regionally and at the state level as the company buys equipment, builds facilities and goes about its operations.”

Epsilon officials have said they are in discussions with U.S.-based contractors to construct their plant but could not share specifics as of press time.

They also said in October that Epsilon has nonbinding memorandums of understanding with various battery manufacturers in hopes of reaching more formal agreements soon.
Cooper said Epsilon is expected to have a long-lasting impact on the state.

“Our analysts predict that over the next 12 years,” Cooper said, “this project will benefit North Carolina’s economy by more than $1.3 billion.”
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