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WilmingtonBiz Magazine

International Manufacturing Investment Zeros In On Region

By Emma Dill, posted Sep 25, 2024
Employee at Shanghai-headquartered Wisdom Playground’s warehouse in Navassa (Photos by Madeline Gray)

In the past year, several manufacturers with international ties have announced plans to expand their reach into the Wilmington area.

These announcements offer just a snapshot of the foreign direct investment that’s coming to the Cape Fear region – investments that offer the potential to draw in more new business, according to Scott Satterfield, CEO of the local economic development organization Wilmington Business Development.

Foreign direct investment is an investment made by a foreign company or individual in the United States, according to the U.S. Department of Commerce.

“We’ve had a strong run of (foreign direct investment) in recent years and see it as more of a secular than cyclical trend,” Satterfield said.

He points to the GE Hitachi Nuclear Energy campus in Castle Hayne as a “big piece” of the region’s foreign direct investment story. Satterfield noted that the company is a “highly globalized” joint venture that’s had a presence in the Wilmington area for more than 50 years.

More recently, in 2022, the company announced a major investment in its Wilmington-area plant, pledging to add 485 new jobs and invest $85 million for a new fuel facility.

Since then, a string of other foreign direct investment announcements has followed.

For example, Kesseböhmer, a German company that processes metal for retail racks and kitchen storage products, broke ground last September on a $30 million facility just north of downtown Wilmington on U.S. 421.

The 93,000-square-foot building will operate as the company’s North American headquarters and a warehouse and distribution hub. Last year’s groundbreaking marked the company’s expansion in Wilmington – the firm has had a presence here since 2007.

Shanghai-headquartered Wisdom Playgrounds, a commercial playground manufacturer, recently leased about 70,000 square feet of industrial space in Navassa for a distribution center that will serve the East Coast and Midwest.

Wisdom Playgrounds started out leasing about 13,000 square feet of space along U.S. 421 four years ago but realized the company needed more room to grow, said Kim Haemker, Wisdom Playgrounds’ chief operations officer.

Wisdom Playgrounds has a presence in 27 countries and is one of a handful of commercial playground manufacturers in the U.S. market, according to Haemker.

And last October brought the largest potential foreign direct investment in recent memory when Epsilon Advanced Materials, an India-based company that makes graphite for electric vehicle batteries, announced its plans to bring a massive $650 million manufacturing plant to Brunswick County.

The plant, which would be the company’s first in the U.S., plans to hire 500 workers.

Epsilon’s plans have spurred investment in Brunswick County’s Mid-Atlantic Industrial Rail Park, including new water and sewer infrastructure and a 1-million-gallon elevated water tank.

Bill Early, executive director of economic development group Brunswick Business and Industry Development, told the Business Journal that Epsilon’s commitment would “raise the profile” of Brunswick County and has the potential to draw new foreign and domestic businesses, especially those in the electric vehicle industry, to the area.

“I believe it certainly will help build the foundation for other similar companies to consider Brunswick County,” Early said.

Early said this summer that Epsilon is working to finalize its site plan and engineering for the plant and secure required permits.

Just a month after Epsilon’s announcement, last fall SANY America, the U.S. division of a China-based heavy equipment manufacturer, announced plans to establish a warehousing and distribution hub near Wilmington’s port.

Pender Commerce Park felt the impact of foreign direct investment recently too, according to Satterfield. Maersk Global, a transportation company headquartered in Denmark, moved its Performance Team third-party logistics company, through a partnership with RL Cold, into more than 300,000 square feet of cold storage space at Pender Commerce Park earlier this year.

Next door, Polyhose, an India-based maker of industrial hoses and fittings, announced plans to double the size of its existing 52,500-square-foot facility in the commerce park.

The latest announcement of foreign direct investment came this spring when Protocase Inc., a Canadian rapid manufacturing and prototyping firm that serves the aerospace and defense industries, chose Wilmington for its first expansion into the U.S.

Protocase established an office in downtown Wilmington this summer and is eyeing plans for a manufacturing facility that could employ around 400 people within five years.

So, what’s drawing all of these foreign-based firms to Wilmington?

Company officials often point to the Cape Fear region’s central location on the East Coast and the area’s transportation infrastructure, including Wilmington’s port and the major highways and rail lines that crisscross the region.

SANY America officials, for example, recently said the company decided to bring its warehousing and distribution hub to Wilmington because of its easy access to a port and central location on the East Coast – factors officials say will help speed up the distribution of parts within the company’s dealer network.

The company has signed a seven-year lease for a roughly 532,000-square-foot facility formerly occupied by Vertex Railcar Corp. and Terex Cranes.

“Foreign firms appreciate our location,” Satterfield said.

Being in the Eastern Time Zone means Wilmington shares “several hours of the business day with Europe and much of the Middle East,” Satterfield said – a plus for foreign-based firms operating across several countries.

Its location puts companies within a “two-day drive of a huge swath of the U.S. consumer base,” according to Satterfield. The port also plays a significant role in connecting companies with raw materials and broader markets.

Protocase officials, for example, looked at several locations across the U.S. before landing on Wilmington. The company initially looked at the Western U.S. but decided the region would be too far from Protocase’s existing facility in Nova Scotia.

Officials also considered the Northeast and Midwest but didn’t feel the business climate was a good fit, so they looked more closely at the Southeast. Protocase officials ultimately narrowed it down to Savannah, Charleston and Wilmington before selecting the Port City.

They were drawn to the area because of its coastal location and “business-friendly environment,” which includes favorable tax rates and attitudes toward business and development, said Doug Milburn, the company’s co-founder and vice president.

For Polyhose, it was support from local economic development groups and the availability of a “ready-to-build site” that initially drew the company to the Wilmington area in 2019, according to Polyhose President Mo Millwala.

The Wilmington location serves as Polyhose’s headquarters for the Americas and is the foundation for the growth of its North American business, according to Millwala. Over the past five years, the company has invested $8 million to $10 million in the area.

Foreign direct investment not only builds up Wilmington’s economy, but it also appeals to U.S. companies that want to do business globally, according to Satterfield.

Although global geopolitics make it difficult to determine exactly how foreign direct investment trends will play out, Satterfield believes the region’s recent track record attracting foreign-based businesses could make the area more attractive as a business destination for other companies – both domestic and foreign.

Satterfield expects the investment trends in the Wilmington area to continue, especially with the uptick in reshoring that’s followed the COVID-19 pandemic.

As foreign-based companies continue to see growth in the Wilmington area, Satterfield said they spread the word about Wilmington to their networks of partners, suppliers and buyers.

“With greater Wilmington being a prominent part of their success story, we get talked about all over the world,” he said. “Execs have credibility amongst their peers, which is impossible to overstate. They have been very generous in their praise of our region, and we expect that to continue.”

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