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Record Growth Becomes the Norm in South Carolina

Caterpillar launches two expansions, while foreign investment floods in.

  [ 3/1/1999 ]  By: Kerrie L. Bertz   Print This Article  Reprint/License This Article  E-mail This Article To A Friend  
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Some states focus on new business, while others concentrate on expansions. South Carolina does both well, as indicated by a fourth consecutive year of $5 billion-plus annual capital investment and record-breaking job growth.

Since 1994, 83 percent of the investments and 72 percent of the jobs have come from expansions of businesses already in operation.

Champion Roller in Rock Hill is one such company that decided to expand in South Carolina. Ron Steele, project manager of the company's $3.5 million expansion, said Champion discussed moving to another state.

"But there are some very big advantages to being in Rock Hill --work force and transportation are the most important," said Steele.

"We have a great work force. They show up for work and seem genuinely happy to have jobs. We've been able to find people with some related experience, and York Technical College in Rock Hill has been able to help us with some recruiting."

Tax credits of approximately $2,500 per new job for the next five years were included in the incentive package, which Steele valued at $250,000.

The state has numerous incentives for expanding and relocating businesses. The worker training program, called Special Schools, helps companies find qualified workers. The state will recruit, test and train potential employees, all at no cost to the company.

Other incentives include: a job tax credit ranging from $1,500 to $4,500 per job; a fee-in-lieu-of property taxes; and a job development credit.

Familiarity breeds success
In central South Carolina, Caterpillar Inc. was so pleased with its current facility in Sumter that it awarded the city another division's project. Caterpillar's 210,000 square foot precision pin operation celebrated its grand opening last October. In December, executives announced plans to open a hydraulic cylinder plant down the road.

Western Star Trucks Inc., which already operates this facility in Kelowna, S.C., is building a second manufacturing plant in Charleston.
For the $32 million precision pin investment, Peoria, Ill.-based Caterpillar identified 20 sites throughout the South, Southeast and Midwest. Executives narrowed the search to four locations before selecting a site in Sumter's Airport Industrial Park.

"The precision pin project has been a very positive experience," said Ed Hubbard, facility manager for Caterpillar.

"Sumter and South Carolina had a lot of the same financial incentives others had, but we took a look at the total package, how we were going to get people trained, how the county handled things, how the city and county governments work together. From a total package standpoint, we felt very comfortable."

Training programs, work force availability, access to highways, the support services of surrounding businesses, and infrastructure influenced Caterpillar's decision.

"If any one of those was missing, it wouldn't have worked," said Hubbard.

International growth
Foreign investors are also expanding throughout South Carolina. BMW and Fuji Film are two of the most prominent recent projects. However, low-profile, foreign companies are also calling South Carolina's small communities home.

In Newberry, a town of 12,000, Korean, Italian and English businesses all have invested in the town.

"There is a lot of interest by local officials in helping find what you need to get a project going when you need it," said Wayne Boozer, operations manager for McKechnie Vehicle Components in Newberry.

Last year McKechnie, PLC, the United Kingdom-based parent of McKechnie Vehicle Components, decided to open its first fluid handling division in the United States. Corporate executives considered expanding at the company's other U.S. locations, but decided on South Carolina.

In August, McKechnie broke ground on a 20,000 square foot building next to the Newberry facility to house the fluid handling division. Total investment will be $3 million to $4 million when production begins this spring.

To secure the project, the state developed an incentive package of property tax abatements and reimbursement for training expenses.

"The availability of qualified workers and existing company-owned property added to the appeal of the Newberry site," said Boozer.

Charleston has also received foreign investment. Western Star Trucks, a truck maker based in British Columbia, announced it will build a 330,000 square foot manufacturing plant in the Palmetto Commerce Park. The $25 million facility will employ 200 workers when opened in the fall of 1999, with 200 more added in the next several years.

"Charleston is an ideal location for us and will play a large role in Western Star's continued prosperity by locating our company closer to key suppliers and our existing customer base," said Robert Enright, president of Western Star Trucks.

South Carolina Facts & Contacts

Demography And Economy


Population: 3.7 million
Capital: Columbia
Three Largest Cities: Columbia, 112,773; Charleston, 71,052; North Charleston, 59,923
GSP: $79 billion
Per Capita Income: $19,977
% of Private Manufacturing Workers Organized: 5.6%
Right to Work State: Yes
Unemployment Rate: 3.9% (Dec. '98)
Average Hourly Manufacturing Wage: $10.43
Population Age 25 and Over With a Bachelor's Degree or More: Columbia, 31.7%; Charleston, 29.4%; North Charleston, 11.4%
EM's Education Quotient for the Largest School Districts: Columbia (Richland Sch. Dist.), Yellow; Charleston, Red
Corporate Income Tax Rate: 5.0%
Percentage Employment by Sector: construction, 5.9%; manufacturing, 20.7%; mining, 0.10%; service industries, 22.8%; transportation/public utilities, 4.4%; wholesale/retail, 24.2%
Primary Industries: capital equipment, metals, chemicals, automotive, textiles, agriculture, tourism, forestry products

Business Assistance
Major Financial Incentives: fee-in-lieu of taxes, jobs tax credits, job development credits
Worker Training Programs: Special Schools: customized training by state technical schools
Enterprise Zones: entire state
Foreign Trade Zones: 3

Quality Of Life
Average Price for a Single-Family Home: Columbia, $120,927; Charleston-North Charleston, $137,270
Cost of Living Index: Columbia, 97.4; Charleston-North Charleston, 100.3

For More Information Contact
Charles Way, Secretary of Commerce, South Carolina Dept. of Commerce, P.O. Box 927, Columbia, SC 29202, (803) 737-0400, fax (803) 737-0418

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