Special Section: Commerce Expert help for small business
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Boeing’s new Dreamliner just the latest of many products made by South Carolina’s workers
Turnover stirs up banking community
CHANGE SERVICE REQUESTED
MADE IN S.C.
S.C. banks’ new look
Youâ€™ve been in the business world for years and you know the importance of working smart not hard. Thatâ€™s why Columbia Metropolitan Airport makes it easy for business travelers to get where they need to be quickly and easily. With convenient parking, hassle free boarding and free Wi-Fi for checking email, let us make sure that for your next business trip you Travel with Ease.
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Contents COVER STORY: MADE IN S.C. South Carolina’s workers have a talent for making things. Now their work has come center stage, with the first S.C.made Boeing 787 as the star. And there’s a large and growing supporting cast of products that are made here. Take a frontrow seat for a look at some of our top performers.
Boeing shows off first Dreamliner made in North Charleston
A manufacturing renaissance brings rebirth to rural counties
Meatballs to firetrucks: A small compendium of things made in S.C.
Cover Photo: The Boeing Dreamliner rolls out of the Final Assembly Center in North Charleston. (Photo/Leslie Burden)
Special section: Commerce 33
A Publication for the
S.C. Commerce Departmen
Commerce state of business. world
Banking’s new Look
In thIS ISSue: Focus
From names on signs to the size of their balance sheets, S.C.’s banks have changed.
on small business
.............. 2 Welcome Letters ..................... 3 begins ................... Where business help .......................... 4 Finding the right match
........................ 6 Why it pays to buy local .......... 7 Size doesn’t matter ..................... by recycling .......... 8 Boost the bottom line
Starting a small business can be tough. Growing a small business can be even harder. Realizing these needs, the South Carolina Department of Commerce offers small businesses easy access to help with such tasks as finding financing, developing exports and recycling. Read about what’s available in this special section.
1 Department the S.C. Commerce A publication for
Departments 4 Bill Settlemeyer’s Viewpoint
8 Spotlight: Charleston County
36 S.C. Delivers
48 1,000 words
CEO and Publisher | Grady Johnson firstname.lastname@example.org
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Accounting Department | Vickie Deadmon firstname.lastname@example.org Managing Editor | Andy Owens email@example.com Senior Copy Editor | Beverly Morgan firstname.lastname@example.org Special Projects Editor | Licia Jackson email@example.com Staff Writer | Chuck Crumbo firstname.lastname@example.org Staff Writer | James T. Hammond email@example.com Staff Writer | Scott Miller firstname.lastname@example.org Staff Writer | Matt Tomsic email@example.com Staff Photographer | Leslie Burden firstname.lastname@example.org Creative Director | Ryan Wilcox email@example.com Senior Graphic Designer | Jane Mattingly firstname.lastname@example.org Graphic Designer | Jean Piot email@example.com Director of Business Development | Mark Wright firstname.lastname@example.org Account Executive | Bennett Parks email@example.com Circulation and Event Manager | Kathy Allen firstname.lastname@example.org Circulation, Event and Business Coordinator Kim McManus email@example.com The entire contents of this publication are c opyright by SC Business Publications LLC with all rights reserved. Any reproduction or use of the content within this publication without permission is prohibited. SCBIZ and South Carolina’s Media Engine for Economic Growth are registered in the U.S. Patent and Trademark Office.
SC Business Publications LLC A portfolio company of Virginia Capital Partners LLC Frederick L. Russell Jr., Chairman
Welcome to the summer issue of SCBIZ. Since we serve the state’s business community with our bi-weekly newspapers, the Charleston Regional Business Journal, the Columbia Regional Business Report, GSA Business, and daily email news alerts from each of them, we use SCBIZ each quarter to take a more thoughtful and analytical look at some of the biggest stories impacting the state’s economic landscape. We continue to put emphasis on our mission of being South Carolina’s media engine for economic growth by bringing you special sections from some of the state’s most important economic development organizations, and this issue we feature the South Carolina Department of Commerce. The state has seen a whirlwind of activity in the financial services sector and the summer issue takes a look at the recent changes in the banking industry with failures and M&A activity ushering out familiar names and bringing in some welcome stability yet potentially moving control over banking decisions farther away from the state. Change creates opportunity and it will be interesting to see how these new operators fare and if a resurgence of small, local banks can profitably fill the niches any of the big players leave underserved. South Carolinians have always made things and made them well. It’s in our DNA. It seems to me the departure of a large Grady Johnson is portion of the textile industry created a lost generation of the CEO and Group “makers” who have rediscovered themselves due to a remarkPublisher of SCBIZ able resurgence of manufacturing in the state. More tires are News which publishes made in South Carolina than anywhere else in the nation; SC Biz magazine, BMW is the nation’s largest exporter, and small and medium Charleston Regional sized manufacturers are gaining a toehold in counties that Business Journal, have historically been dependent on agriculture. I attended the Business Report and rollout ceremony for Boeing’s North Charleston-made 787 in GSA Business. April and heard thousands of this new generation in full throat, chanting “We build jets!” And we surely do build one heck of a jet. Consider this: there are only three places on the planet that produce wide-bodied commercial jets and now the most advanced commercial jet in the world has Made in SC stamped on it. April 2012 is a pivotal moment in the state’s history. This is a game changer. Not only for the way the world will view air travel, but for the way the world will view South Carolina. We packed all this plus our regular features into this issue. So enough messing around with me. Turn the page. Enjoy!
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Viewpoint The real keys to successful economic development
’ve been an interested observer of economic development in our state for 30 years now. Over all those years, two factors have played leading roles in our success in attracting blue-chip manufacturers and other top-notch businesses to South Carolina. The first factor is that we really are “business friendly.” But the keys to what that means are often misunderstood. It’s not mainly about incentives and low taxes. Many states compete using incentives or touting low taxes. What “business friendly” really means is that at every level of government, our public officials go out of their way to welcome prospective employers, as do our local business communities – bankers, real estate professionals, business leaders, chambers of commerce. And we walk the talk – meaning that we are proactive in easing the path for businesses, and we back up our initial commitments with ongoing service and support. Of course, not everyone plays on the team. One of our two senators, for example, showed how not to do economic development by first throwing a monkey wrench into the process of securing Corps of Engineers funding for port expansion, and more recently opposing renewal by Congress of the Export-Import Bank, a key competitive tool essential to Boeing’s efforts to compete with Airbus and other foreign companies in
the global market for commercial aircraft. By and large, however, most of our leaders have stayed with the economic development playbook that’s worked consistently for South Carolina over the years. As the saying goes, “if it ain’t broke, don’t fix it!” The second major factor in our state’s economic success has been the performance of our workforce. No better proof of that can be found than at the BMW facilities in the Upstate. When a world-class foreign manufacturer keeps adding capacity and lines of production in South Carolina, that means that our workers are delivering the performance needed to drive the company’s success over the long run. I fully expect that our workers at the Boeing facilities in Charleston will deliver the same kind of performance as the company ramps up its production of the 787 Dreamliner. And while the recent rollout of the first 787 produced in our state was a momentous event, the real test lies ahead – our workers will have to constantly “step it up” to ensure that Boeing achieves its goals. It can be fairly said that a strong work ethic is a part of the DNA of our workforce, and it’s also obvious that our state and other Southern states have benefited from the general expectation that most workers will not be joining a union, and even if they do, they’ll still work well with management and have reasonable expectations.
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But neither of these factors will carry the day without a stronger commitment to education at all levels. On more than one occasion, economic development consultants have told us that blue-chip companies are far more interested in the strength of our educational systems than they are in low taxes. One of the things that attracted Boeing to South Carolina was the ability of Trident Technical College to partner with the company to develop a specialized training center for Boeing at the college. Yet even as the role of Trident Tech and all our technical colleges has grown more important to economic development, financial support from the state has continued to fall. Other states, especially the “other Carolina” to the north of us, “get it.” But here, not so much. We’re so obsessed with cutting taxes and spending that we can’t see the forest for the trees. A well trained and educated workforce is the raw material from which prosperity is built, one job at a time. Without an adequate supply of qualified workers, no state can thrive in today’s highly competitive global economy. This is a lesson our political leaders still haven’t learned, at least not well enough.
Bill Settlemyer firstname.lastname@example.org
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regional news | data
aking big tires has become big business in South Carolina as tire manufacturers ramp up production to meet growing demand. Michelin North America has been making off-the-road tires at a plant in Lexington County, and the tire maker is expanding that facility. Michelin also plans to build a second tire plant in Anderson County. Another company, Bridgestone Americas, is building a 1.5 million-square-foot manufacturing facility in Aiken County to make its version of the giant tires. Together the two tire makers are investing nearly $2 billion to increase South Carolina’s OTR tire manufacturing capacity. Analysts say there’s a shortage of the big tires and the major manufacturers are all boosting capacity. Overall, the number of OTR tire units made in the U.S. is expected to reach 300,000 by the end of 2012, passing 2011’s total of nearly 295,000 units.
Big tires, big business for S.C. U.S. sales of OTR tires
= 100,000 units
288,376 232,790 163,509
Source: Modern Tire Dealer
FAST FACTS | BOEING 6,000
Boeing employees in S.C.
Cost of a Dreamliner
est. economic impact in S.C.
NEW ECONOMIC DEVELOPMENT Upfront
Announcements made since March 1, 2012
Company................................... County..............Investment......... Jobs Avtec Inc....................................Lexington .................. $6.1 M............. 25 WNS (Holdings) Ltd..................Richland..................$4.25 M...........300 Fed. Mogul Friction Products.....Orangeburg...................$7 M............. 40 Frontier Communications..........Horry..............................N/A.............110 US Fibers...................................Edgefield....................$5.5 M............. 48 Carolina Canners Inc.................Chesterfield............ $20.8 M..............10 aeSolutions................................Greenville......................$2 M........... 40+ Nation Ford Chemical................York...........................$5.5 M.............. 16 JTEKT Automotive.....................Greenville.................. $102 M.............80 South Carolina Inc. Duke Sandwich..........................Anderson......................$5 M............. 45 Grace Plastics............................Greenville....................$1.2 M.............. 16 Diversified Plastics....................Dillon.........................$2.5 M.............. 15 Ross Stores...............................York................................N/A...........600 Michelin North America Inc......Anderson,................ $750 M...........500 Lexington Accuride Corp............................Kershaw...................$8.73 M............. 25 Ionic Technologies Inc...............Greenville.................... $10 M.............. 13 LowCountry Biomass LLC..........Jasper........................ $16 M............. 26 Tognum America Inc..................Aiken.......................... $40 M............. 20 Nexans.......................................Berkeley..................... $85 M...........200 Rolled Alloys..............................Chester......................$3.7 M............. 24 Caterpillar..................................Sumter....................... $20 M.............80 Naturally Advanced ...................Florence........................$8 M............. 25 Technologies Inc. Belk Inc......................................Union.........................$4.5 M............ 124 Jones-Hamilton Co....................Chester...................... $29 M.............. 15 GSE Lining Technology..............Williamsburg.................$5 M............. 24
Source: S.C. Department of Commerce
S.C. income growth trails U.S. Personal income grew 4.7% in South Carolina last year, 0.4 percentage points below the national average. That put the Palmetto State at No. 32, according to data released by the U.S. Bureau of Economic Analysis. Personal income Personal income rose an average growth rates in 2011 5.1% in the U.S. last year after rising Rank State Growth 3.7% in 2010. State personal income 49....... Alabama............... 3.8% growth ranged from 3.4% in Maine to 43....... Arkansas.............. 4.3% 8.1% in North Dakota. 29....... Florida.................. 4.7% The bureau defines personal income 23....... Georgia................5.0% as income received by all persons from 30....... Kentucky.............. 4.7% all sources. In South Carolina, earnings 27........ Louisiana............. 4.8% rose in the durable goods manufactur48....... Mississippi........... 3.8% ing industry by 8.5% last year, while 40....... North Carolina..... 4.3% earnings from real estate increased 8.4%. 32..........South Carolina........4.7% The professional services sector posted 12........ Tennessee............ 5.4% a 9.3% earnings gain. Other sectors U.S. Average......... 5.1% experienced smaller gains: education, Source: U.S. Bureau of 5.2%; health care, 3.9%; hospitality, Economic Analysis 4.2%; retail, 2.5%; and transportation and warehousing, 3.6%. Earnings from South Carolina farming dropped 20%, and earnings in the construction industry dropped 2%, the BEA reported.
Aiken and Edgefield Counties, South Carolina
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For a closer look, contact: Will Williams, Director email@example.com
P.O. Box 1708 | Aiken, SC 29802 | Phone: 803.641.3300 | Fax: 803.641.3369 | www.edpsc.org
S.C. labor force at a glance April 2012
Number of workers employed
Decrease in number employed from March to April 2012
Unemployment rate Source: S.C. Department of Employment and Workforce
Sweet Carolina onions on our minds
Source: S.C. Department of Agriculture
Columbia, SC 803-461-3831
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The South Carolina Sweet Onion is smelling pretty good for the state’s farmers. Just introduced in 2010, the sweets are repeats – with customers who’ve tried them asking for more, says Sonny Dickinson, assistant director of marketing for the S.C. Department of Agriculture. Offering up some competition for that other mild onion from a neighboring state, the South Carolina Sweet is light goldenbrown with a creamy white interior. Folks find them good for cooking, baking or as burger toppers. Look for some fresh ones now – they’re a winter crop, harvested mid-April through June. You can recognize them by the Certified SC Grown logo.
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Making Business History South Carolina’s Oldest County Charts a New Course
ince 1670, Charleston, S.C., has earned its reputation as a survivor. It has recovered from crop failures, hurricanes, earthquakes, the Civil War and Reconstruction, the Great Depression and the Naval Base closure of the mid-1990s. As early as the 1700s, the port at Charleston launched the city into the vanguard of “world trade” alongside other commercial centers such as Boston, Philadelphia and New York. In the aftermath of the Civil War, however, the economy in Charleston entered a long stagnation that would not begin to lift until after World War II and the early industrialization of the 1960s. Crisis would revisit the city again in 1993 when BRAC claimed its Navy complex and some 22,000 area jobs.
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View from the solar roof of Boeingâ€™s new final assembly building, North Charleston, SC.
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Following the base closure, Charleston County and neighboring Berkeley and Dorchester counties were determined to double down on economic diversification. In 1995, they joined together to partner in economic recruitment activities, creating a “better mouse trap” by forming the non-profit Charleston Regional Development Alliance (marketing/ recruitment). The three counties also launched extensive county business retention and expansion efforts designed to serve their more than 300 existing employers. Building upon local assets like the Medical University of South Carolina, the Space and Air Warfare Systems command (SPAWAR), Boeing, the Clemson University wind energy research initiative, and the burgeoning downtown Charleston technology scene, Charleston County and its tri-county partners target aerospace, advanced security (e.g. defense-related IT and electrical engineering), bio-medical, wind energy, automotive, and creative industries. These initiatives have yielded strong results. Since 1995, more than 23,000 new jobs have been created by relocating or expanding
County Spotlight: Charleston
‘The Phoenix rises’
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Above: PeopleMatter headquarters on King Street under construction. (Photo/Leslie Burden) Right: Inside the SPAWAR data center. (Photo/ Provided)
Charleston County-based businesses alone, and those businesses have invested in excess of $4 billion within the county. This effort has included blue-chip firms such as Cummins, GE Aviation, Verizon Wireless, Daimler Vans, SKF, Scientific Research Corporation,
SAIC, BAE Systems and The InterTech Group. Charleston County made aviation history in 2009 as The Boeing Company chose North Charleston as the site of its second 787 Final Assembly Facility, announcing a $750 million investment and 3,800 new jobs. North Charles-
Why Charleston County? Growing, educated workforce, and ability to attract more talent With 21% population growth during the past decade, Charleston’s workforce growth continues to outpace both the state and the nation. With an average of 32 new people moving into the region each day, our “brain gain” has also been impressive – in fact, 31.9% hold a bachelor’s degree. We have outpaced the state and nation for the percentage of engineering and information technology workers. Superior multi-modal transportation network serving domestic and international markets Within one hour transit of the open sea, our natural harbor hosts five terminals from which shippers can serve 140 countries around the globe. These terminals already accommodate post and super-Panamax vessels, but waterways are being further deepened to 50 feet to serve the new, expansive Veteran’s Terminal when the
Panama Canal expansion is complete in 2014. An extensive network of rail service and interstate highways enables shippers to quickly reach south Atlantic, Northeastern and Midwestern markets representing over 60 million consumers. Southwest, Delta, U.S. Air and other airlines offer non-stop air passenger service to 16 destinations, including New York, Washington, D.C., Chicago, Boston, Atlanta, Charlotte, and Houston. A nationally competitive business cost structure Charleston County offers below the national average land and building costs, unemployment insurance, workers compensation premiums and sales and use taxes. Continuing this trend, the state corporate income tax is among the lowest in the nation. Throughout the recent recession, Charleston County continues to hold property taxes down, practicing shrewd financial stewardship that helped retain its coveted Triple-A credit rating with all three major bond rating agencies.
The county’s award-winning planning, green-belt preservation, recycling, and emergency services enhance the bottom line for businesses. A documented pro-business track record Charleston County has long understood that economic development is a “team sport.” We partner with the South Carolina Department of Commerce, our municipalities, readySC, utilities like SCANA, Berkeley Electric Cooperative, AT&T, and our economic development allies. Speed to market is crucial to business profitability; our customized workforce training, expedited permitting and strategic use of financial incentives have earned us our “business-friendly” reputation. Companies in the trenches can count on the expertise of our local law firms, environmental and engineering firms, and general contractors. These assets help complete the due diligence process and deliver new facilities on or ahead of schedule. Many of our allies’ advertisements appear on the pages of this article.
County Spotlight: Charleston
Businesses expect a value-added partnership with their host community and Charleston County offers several distinct advantages.
27 Graduate Degree Programs Seven Graduate Certificate Programs Four Evening Undergraduate Programs
If you want to fulfill your dream of continuing your education and enhancing your career, contact The Citadel Graduate College to learn about our master’s and bachelor’s degree programs.
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The Citadel congratulates Boeing on the roll out of their newest aircraft, the 787 Dreamliner.
County Spotlight: Charleston
Kiawah Island’s Ocean Course will host the 2012 PGA Championship. (Photo/Leslie Burden)
ton joined the elite ranks of Everett, Wash., and Toulouse, France, as only the third city in the world where wide-body commercial aircraft are assembled.
A surprise around every corner
The open sky is reflected in the marsh along the 2,200-foot wooden pier that is the centerpiece of the Shem Creek Park, which opened recently in Mount Pleasant. (Photo/Leslie Burden)
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The Charleston region is no longer a wellkept business secret. Its business ingredients, unique sense of place and compelling quality of life earn it a variety of national and international accolades praising everything from its
“livability” to its favorable climate for small business innovation. The diverse personality of Charleston County draws its elements not only from the mystique of 18th century downtown Charleston, but from the bustling suburban growth of Mount Pleasant, the urban renaissance of North Charleston, the beaches and golf resort communities and the rural beauty of places as unique as Edisto Island and McClellanville. Despite quaint first appearances, there is
Palmetto Commerce Park. (Rendering/Google Earth)
County Spotlight: Charleston
a modern-day surprise around every corner. Massive cargo ships complete their transcontinental passage down the Cooper River past graceful 18th century steeples. Among historic district storefronts and restaurants in “the Digital Corridor,” there are exciting new software firms like PeopleMatter setting up shop. Just a few blocks from the Shem Creek shrimp fleet in Mount Pleasant, Mediterranean Shipping Company coordinates its worldwide voyages and day- trader Automated Trading Desk generates some 6% of NASDAQ’s daily volume. In the bustling West Ashley suburbs, not far from the historic plantations along Ashley River Road, Charles River Laboratories produces an industry-leading pharmaceutical agent. On the once-idled Navy Base in North Charleston, a $100 million wind turbine test facility is coming out of the ground and mine resistant vehicles (MRAPs) produced by Force Protection Inc., are being shipped overseas to American troops. Just blocks away, awardwinning neighborhoods near East Montague Avenue are being repopulated by’”twentysomething” professionals, and a vast network of global businesses is managed from the worldwide headquarters of The InterTech
Group, the second-largest privately-held company in South Carolina. Adjacent to the Charleston International Airport two miles away, the first South Carolina-made Boeing 787 nears completion and delivery.
“Build it and they will come” The Charleston region offers 28 million square feet of industrial, flex and distribution space for lease in the business park settings within the Charleston, North Charleston, Mount Pleasant and West Ashley sub-markets. The most current vacancy rate was 12% (3.4
million square feet available) during 4Q 2011, according to Grubb & Ellis / WRS . An ample supply of undeveloped acreage is also readily available in light industrial settings like Palmetto Commerce Park, the Ingleside tract, Ladson Station Industrial Park and Carolina Park, to name a few. Palmetto Commerce Park offers a large-acreage Class A locale just nine miles north of the Charleston International Airport. Neighbors include Cummins, Daimler Vans, Shimano, GE Aviation and the Boeing Interiors Responsibility Center (IRC). The extension
Smart businesses come on over.
For more info call 843.884.8517 experiencemountpleasant.com
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Mount Pleasant is home to stunning natural beauty, low taxes, the best schools, low crime and an unbelievable array of recreational opportunities, shopping, dining and culture. What you might not know is how attuned and attentive to business Mount Pleasant is - with incentives, support and hands-on, real-time help built for start-ups and smart growth.
County Spotlight: Charleston
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Smart, Growing and Cool
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brain gainer metro
For highest growth in adults with college degree Wall Street Journal â€“ 2011
#1 top city in the United States For atmospheric ambience, culture/ sites, friendliness, lodging, restaurants and shopping Conde Nast Traveler â€“ 2011
A top 50 best place for business & careers Forbes â€“ 2011
#1 coolest small city in America GQ â€“ 2010
A top 20 best performing large city The Milken Institute â€“ 2010
#4 small business vitality score in the nation Portfolio Magazine â€“ 2010 www.scbizmag.com
A top 10 best city for technology jobs
Forbes â€“ 2009 www.charlestoncountydevelopment.com
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25 Calhoun St. (Photo/Provided)
the site of an 180,000-square-foot speculative building, the first such building in the Charleston regional market since the 2008 recession dampened the lending climate. Owned by Albert W. Weber and represented by commercial realtors Meyer, Kapp & Associates, the Ingleside tract represents the’”New Frontier” along Palmetto Commerce Parkway . The vast development potential of this 2,700-acre property (straddling I-26 for more than two miles) is captured in a dynamic mixed-use plan featuring office, commercial, industrial and residential areas. Some 600 acres of light-industrial property, many of them adjacent to the Norfolk Southern rail line,
are immediately available for sale or for BTS packages. The aforementioned Immedion data center and manufacturing projects represent the first transaction within this exciting new development. Beginning in 2001, Robert Caldwell & Associates developed the first phase of the Aviation Avenue Business Park, which would go on to encompass eight buildings of highly versatile flex space totaling 350,000 square feet and housing some 31 tenants like BAE Systems and ManTech. Perched near the front gate of SPAWAR, Remount Road Business Park began in 2009 with the construction of a 200,560-square-foot multi-tenant building by a consortium consisting of Clayco, Venture 1 Real Estate, First Commercial Partners and Landmark Enterprises. An additional building undertaken during 2011 added another 100,000 square feet, and a third in the works during 2012 will add yet another 75,000 square feet. The blue-chip tenant list keeps growing, already including industry-leading defense contractors like SAIC and Scientific Research Corp. Inc. Some 9.2 million square feet of corporate office space exists throughout Charleston
County Spotlight: Charleston
of Palmetto Commerce Parkway to Ashley Phosphate Road in 2010 opened up some 2,000 additional acres and spurred yet another wave of development. Construction cranes again dot the horizon as three data centers (Immedion, Roper-St. Francis Hospitals, and Charleston County Consolidated 9-1-1 Dispatch) and two manufacturing facilities (Streit USA Armoring: armored cars and InterTech-owned subsidiary TIGHITCO: aerospace composite products) are now going vertical. As the original park approaches build-out, some 400 acres remain available for sale or build-to-suit (BTS). Pattillo Construction (Stone Mountain, Ga.) first pioneered BTS construction in Palmetto Commerce Park and is responsible for five of the largest industrial buildings now housing park tenants. Pattillo offers BTS packages on its remaining two tracts totaling 159 acres. Commercial realtor CB Richard Ellis represents owners Jamestown Properties (Atlanta, Ga.) and Childress Klein (Charlotte, N.C.) in their BTS offerings at the 300-acre Cross Pointe development, located directly opposite Daimler Vans and the Boeing Interiors IRC. CB Richard Ellis announced in mid-April that Cross Pointe will soon become
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County Spotlight: Charleston
97,000-square-foot Faber Centre at an adjacent location in 2008. Ever bullish on our market, Holder completed the 25 Calhoun St. office building in downtown Charleston in 2011, recently announcing that this 63,000-square-foot facility is leased. Holder started construction in April 2011 on Faber Pointe, a new 80,000-squarefoot office building in North Charleston, and will commence yet another project this summer in downtown Charleston at 174 Meeting St. (50,000 square feet).
Historically forward thinking
A crowd watches the Lee Brothers cooking demo at the 2012 Charleston Wine + Food Festival, one of the many festivals held annually in Charleston. This year’s festval brought 21,250 guests and added $8.6 million to the local economy. (Photo/Leslie Burden)
County, from the downtown Charleston central business district to suburban campuses in North Charleston, Mount Pleasant and West Ashley, with vacancy currently at 14% (1.3 million square feet available). Amidst the recent recession and recovery, development of
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new office space had become almost unheard of. Almost. Holder Properties (Atlanta) entered the Charleston market in 2005 with its 105,000-square-foot Ashley Overlook in North Charleston. They followed up with the
Since its inception in 1994, the Charleston County Economic Development Department has pursued a mission with three distinct elements: business recruitment, retention and expansion, and business climate improvement. A lifelong resident, Economic Development Director J. Steven Dykes, SCCED, has spearheaded this focused mission with a five-member staff under the direction of several County Administrators and County Council Chairmen spanning the past 18 years. The economic development mission is a direct reflection of the business experience and community
County Spotlight: Charleston
commitment which has always characterized Charleston County Council. Council Chairman Teddie Pryor is a former small business owner and lifelong resident of North Charleston, and County Administrator Kurt Taylor is an accomplished attorney and manager whose civic calling led to his prior service as a city councilman. As it nears the 20-year mark, the Charleston County Economic Development Department is not resting on its laurels. It is closing out a three-year expansion program that has featured an increase in its staff, relocation to larger offices, an overhaul of its office technology and creation of its first independent website. The year 2012 will provide “no rest for the weary” as the department expands its Business Assistance Program offerings to existing companies and helps host the 2012 PGA Championship at Kiawah Island.
The Oak Terrace neighborhood within the Park Circle area of North Charleston is one of the vibrant parts of the city undergoing a renaissance by attracting new development, young professionals and a spirit of entrepreneurship and community. (Photo/Provided)
The Buzz Charleston County is a mid-sized community with big-city amenities. Our physical surroundings, mild climate and Southern charm have always drawn in the visitor, but it’s our neighborhoods, schools and universities,
restaurants and cultural offerings, beaches and recreational pursuits that keep the residents here and loving life. This buzz draws college students, young job-seekers, new families, the military, and retirees alike.
It is drawing business people in record numbers, because they understand that beyond the “business basics,” Charleston is a place where they can have happy families, happy employees, and a happy Board of Directors!
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MADE IN S.C.
Boeing Co. finishes and flies its first jet built
he Boeing Co. flew its first Lowcountry-built 787 Dreamliner in May, marking the start of a generational airplane-building legacy officials hope will ripple through South Carolina’s economy and reinforce its workforce’s ability to manufacture high-tech international products. The 787 traveled nearly 2,000 miles, and the flight was unusual because of how smoothly it went, said Randy Neville, the 787 chief model pilot. The Boeing test pilots took off from Charleston International Airport about noon on May 23 for a five-hour flight. Neville and his co-pilot, Tim Berg, per-
formed ground checks and did two taxis down the runway — including a low-speed abort — before taking off and flying over the Atlantic Ocean, where most of the flight occurred. Then they flew five approaches to Charleston International Airport. Mike Sinnett, chief project engineer for the 787 program, said the Dreamliner’s flight proves the plane is everything the aerospace giant promised. “I’ve been impressed with the quality of the airplane, the quality of the build, the quality of the engineering here,” Sinnett said, referring to workers at Boeing South Carolina. The first flight came on schedule after
Boeing rolled the jet from its final assembly facility on April 27. During the rollout, Jack Jones, vice president and general manager of South Carolina, said pilots would fly the plane within three to four weeks. The April event featured Boeing executives and politicians, all of whom spoke about the historic day. Music pumped from stacks of speakers on each side of the stage. Marco Cavazzoni, vice president and general manager of final assembly and delivery, kicked off the event, running through the crowd and asking Boeing employees to share their feelings about the day. “Today is our day,” Cavazzoni said, “because this is your story.”
MADE IN S.C.
outside Puget Sound since World War II build jets!” chant that the audience repeated. Boeing Commercial Airplanes CEO Jim Albaugh said the day also was a historic day for the company. “You sold us on South Carolina, and we’re really happy you did,” he said. “It’s an airplane that others will be measured against for decades to come.” The speakers and excitement culminated while a video played on a big screen. Behind the screen, the giant doors to the final assembly center crawled open, revealing a black curtain. As numbers flashed on the screen, the crowd counted down from 10. The curtains dropped, blue fireworks
screeched into the sky and the first 787 began rolling from the final assembly facility. The crowd cheered, directing the jet with blue ornamental air traffic control wands Boeing had prepared for the event. The 787 pushed forward, slowly turned to its left and continued until stopping behind the stage.
‘A strong message’ If you search Boeing South Carolina on Google, you may find an ad for the S.C. Department of Commerce listed in the paid section at the top of the search page. Boeing South Carolina gives the state a reputation for producing world-class
U.S. Sen. Lindsey Graham followed Cavazzoni and lightened up the crowd. “Marco’s been in the caffeine, hasn’t he?” Graham asked, pausing for laughter. Lt. Gov. Glenn McConnell, S.C. Sen. Hugh Leatherman, Gov. Nikki Haley and S.C. House Speaker Bobby Harrell also spoke, congratulating the employees and acknowledging the importance of the rollout to the state and its workforce. “The fact is, our dream to be competitive and equal to or exceed the others in the aerospace industry around the world becomes true as this Dreamliner rolls out,” McConnell said. Jones then took the stage, starting a “We
By Matt Tomsic
MADE IN S.C.
ing, but as we go out to recruit other businesses and other industries to come to the area, it says that we do have a very qualified workforce,” Summey said. Haley said the body of work is a testament that South Carolina is worth bidding on. “South Carolina continues to prove that when we build things, we build them well,” she said. “Now you will see we are the state that everyone is looking to.”
Watching Boeing, reminded of BMW An economic beast all its own, the Boeing Co. has a template for its ability to affect South Carolina’s aviation industry much like another international brand did for the automotive industry with its entrance two decades ago. “It reminds me very much of my time at BMW,” said Bobby Hitt, secretary of the S.C. Department of Commerce. “I think the
210 - 250 passengers
BMW X6 5.5’ Tall
3 | | | 00
5 37 | | |
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Capital Investment Per Job
600 67 525 | | | | | | | | |
parallels are enormous, and I think they are exactly on point.” Hitt was the manager of corporate affairs for BMW Manufacturing Co. in Spartanburg before he became Commerce secretary. Haley also mentions BMW when talking about the potential for an expansion of the aviation industry in South Carolina. Haley said the automotive company’s success in the Upstate is one reason other auto companies look at the Palmetto State. In a 2010 report, economic development consultants Miley & Associates tracked BMWs impact on South Carolina since 1992 and then used those growth statistics to estimate Boeing’s impact on the Palmetto State by 2027 if the aerospace giant follows BMW’s trajectory. At first, Hitt said, BMW had 600 to 700 employees and made 30,000 cars each year. Across the state, about 20,000 people worked in the auto industry at the time.
products, said Heather Simmons Jones, outgoing president of the South Carolina Economic Developers’ Association. “Having Boeing kind of gives us the good manufacturers’ seal of approval,” Jones said. “It reinforces the same statements that were made when BMW chose us in the ’90s and Michelin chose South Carolina in the ’70s. You start adding all those up, it’s a strong message.” North Charleston Mayor Keith Summey said Boeing’s facilities here raise South Carolina’s profile in the business world. “It makes them look and say this is an area we need to consider,” Summey said. “The South quite honestly (was) never considered a great place for manufacturing, but now it is.” Summey and Haley said the period from Boeing’s breaking ground to rolling out its first Dreamliner proves that South Carolina builds things well, another marketable trait. Workers finished the final assembly facility early and without any accidents causing construction workers to lose job time. Then Boeing employees finished the first Dreamliner within the time frame allotted to them. “This workforce has really pulled this off,” Boeing’s Jones said. “Everybody made this happen.” Employees are assembling three additional Dreamliners now, and the company is shooting to be producing its quota — 3.5 airplanes each month — by the end of 2013 or early 2014, Jones said. Boeing has more than 800 orders for the Dreamliner. “I think that not only says a lot to Boe-
Top s peed for
Speed in MPH
Source: Miley & Associates Inc., Boeing Co., BMW
87 d for 7 g spee Cruisin
The first 787 Dreamliner rolled from the Boeing Co. final assembly facility in late The Boeing Co.’s roughly 6,000 employees turned out for the rollout. A high April with decals that would be removed for the first flight. (Photos/Leslie Burden) school marching band escorted them to the final assembly facility.
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The Citadel congratulates Boeing on the roll out of their newest aircraft, the 787 Dreamliner. If you want to fulfill your dream of continuing your education and enhancing your career, contact The Citadel Graduate College to learn about our master’s and bachelor’s degree programs. We offer 27 graduate degree programs, seven graduate certificate programs and four evening undergraduate programs. With classes held during the evenings, in a professional, civilian environment, The Citadel permits you to have a flexible schedule. Many classes are also available online. The Citadel is ranked by U.S. News & World Report (2012) as the No. 1 Best Public University in the South offering up to a master’s degree. Ninety-five percent of The Citadel Graduate College’s faculty have doctorate degrees or the highest degree offered in their
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MADE IN S.C.
The first Lowcountrybuilt 787 performs touch-and-goes during its first flight on May 23. The Dreamliner flew for roughly five hours and nearly 2,000 miles. (Photo/Matt Tomsic)
Now, more than 90,000 are employed in the auto industry across the state, 7,000 work for BMW, and the company built nearly 30,000 cars just in March. More and more suppliers have opened in South Carolina since BMW located here, Hitt said. He thinks the state will see similar growth in aviation, and some of the pressure faced early by BMW will be similar for Boeing. “I remember when we launched the first South Carolina BMW, which was the Z3 Roadster in 1996,” Hitt said, adding the chairman of BMW came for the event and had specific directions: “Now you must do
it every day, you must do it better and you must do it faster.” And, the chairman said, the world was watching. Hitt said, “I don’t know whether it’s quite that dramatic for Boeing, but it’s close.” At Boeing’s North Charleston facilities, the company’s employees face the same pressure to increase the rate. “This is going to be very euphoric, very exciting,” Jones said before the rollout. “And then 15 minutes after it’s over, everybody’s got to get focused on making sure that we start to crank the rate up.” Between North Charleston and Everett,
Wash., Boeing hopes to produce a minimum of 10 planes a month. The company expects to deliver four planes from North Charleston by the end of 2012; the second 787 delivery is expected about three months after June’s delivery. Meanwhile, the industry is watching. “The big question is how many, how fast will they be able to produce them, and what will be the cost to their operation,” said Adam Pilarski, senior vice president for Avitas, an aviation consulting firm. “We have to wait for all that.” At stake is more than Boeing’s production goals, profits and decision to open an assembly line in South Carolina and build a jet outside of Puget Sound for the first time since World War II. If it meets those goals, the aerospace giant may create a new aircraft-building legacy here that employs generations of South Carolinians, further raises the state’s profile in the global economy and reinforces a theme Haley often speaks of: “Success breeds success, and South Carolina continues to prove when it comes to manufacturing we are and we can be successful.”
The dawning of a new age of research and education in aerospace is at the University of South Carolina The College of Engineering and Computing’s aerospace research initiatives include: Composites • Composites Health Monitoring Composites Lightning Strike Test Lab • Condition-Based Maintenance Conformal Antennas • Friction Stir Welding Power and Electronic Systems • Safety-Critical Aerospace Systems Sensors • Systems Design • and more! Master’s degrees in aerospace and in engineering management Learn more about us online at http://cec.sc.edu
MADE IN S.C.
Boeing’s incentives: $470 million
he Boeing Co. received an estimated $470 million in incentives from South Carolina and local governments as part of its deal to open a Final Assembly and Delivery Center in North Charleston. The state issued $270 million in bonds to pay costs of “the Boeing Project,” according to a bond filing in April 2010. The bond proceeds were used for site development in Charleston County. The work included road improvements, site preparation and the construction of a $750 million manufacturing facility. The state also set aside a $5 million grant and gave the company sales tax exemptions on equipment and construction materials, accord-
ing to a 2010 report by economic development consultants Miley & Associates. The sales tax exemptions are estimated to be worth roughly $41 million. For training, readySC spent $34 million to prepare South Carolina workers for jobs at the plant. The aerospace giant also is eligible for job tax credits estimated at $67 million. The credits are awarded based on the number of jobs created, but whether Boeing receives those credits isn’t known publicly. The state can’t divulge tax credit information because of disclosure laws, said Samantha Cheek, a spokeswoman for the S.C. Department of Revenue. At the local level, Charleston County ap-
job tax credits
Source: Miley & Associates Inc.
proved an incentive package that gave $50 million to Boeing while bringing $138.6 million in new tax revenue over the life of an incentive agreement with the company. The agreement set Boeing’s tax assessment rate at 4% for the facility. The rate is good for 30 years and was negotiated as a fee-in-lieu-oftaxes agreement. The rate was lower than the county’s normal industrial property assessment rate of 10.5%. The agreement brings a total of $188.4 million in tax revenue during the next three decades, but the incentive arrangement allows the county to return $50 million to Boeing during the first 15 years. The money must be used for site work. estimated in sales tax exemptions
in bonds issued by S.C. for site development
in incentives from Charleston County
grant issued by S.C.
S.C.’s readySC Misc. training program
Boeing HUB AIA SC 2012 COTE Award AIA SC 2012 Design Award CISCA 2011 Bronze Award
Boeing, Thank You and Welcome to South Carolina!
w w w. m c m i l l a n p a z d a n s m i t h . c o m greenv i l l e
s pa rta nburg
c h a r l e st o n
a sh e v i l l e
A Publication for the S.C. Commerce Department
Commerce state of business. world of opportunity.
In this Issue: Focus on small business Welcome Letters.................................... 2 Where business help begins.................... 3 Finding the right match........................... 4
Why it pays to buy local......................... 6 Size doesnâ€™t matter................................ 7 Boost the bottom line by recycling........... 8
1 A publication for the S.C. Commerce Department
Letter from the Secretary of Commerce
Letter from the Editor
A drive for success
Help at your fingertips
When you hear news about economic development, it’s often about one of the larger businesses that have decided to set up shop or expand their footprint in our state. These investments are certainly critical to South Carolina’s economic development success, but it’s also important to remember another group of businesses that don’t always get a big splash: small businesses. Small businesses play an integral role in the state’s economy as a whole, and in the cities and towns where they are located. Well over 90 percent of employers in South Carolina are small businesses. In all, more than 645,000 people work for such small businesses. While some of those businesses might grow into larger companies, many will remain small “momand-pop” firms, and it’s important for them to succeed and thrive. We’re making a concerted effort this year at Commerce to do what we can to foster the success of small businesses. We’ve not only made some internal additions, but are also working with partners to help devise solutions for small businesses. At Commerce, we’ve hired new staff in our small and existing business division. We’ve helped establish the Small Business Advisory Council, which will help determine and meet the needs of the state’s small business community. We are also stepping up export assistance for small businesses. One of our newest initiatives we have to offer is the South Carolina Business Network, which can be found at SCBIZNetwork.com. The network provides an avenue for connecting small businesses with other companies, large or small. It is also very convenient as it can be accessed 24 hours a day. The network also includes a calendar of relevant small business events, searchable by ZIP code, and a Q&A section where any small business question can be asked. These and other programs will be critical in our efforts to aid small businesses in reaching success. We’re sure this year will be another great one for economic development across South Carolina. We are working to make sure small businesses in cities and towns across the Palmetto State share in that success.
Robert M. Hitt III S.C. Secretary of Commerce
Commerce state of business. world of opportunity.
A publication of the South Carolina Department of Commerce
Small business is big business in South Carolina. For many small business owners, running their shop is a full-time, roundthe-clock job. Pounding the pavement to find services that might be beneficial to them takes up time they could be spending improving their bottom line. With that in mind, this insert makes available services the S.C. Department of Commerce offers to small businesses across the state. At the heart of Commerce’s small business outreach efforts is the Small Business Development Office. In this special insert, you’ll learn more about the office and what resources are available to small businesses and those wanting to start one. Want to connect with more customers in South Carolina? Read up on Commerce’s BuySC program. BuySC is designed to connect South Carolina-based suppliers with potential customers in the state. Got an idea for a product or service, but not sure how to get financing to turn it into a business? Then check out the scoop on the Lender Matchmaking program, which pairs entrepreneurs with both traditional banks and other lenders. Many small businesses don’t realize just how much of a financial boon recycling can be to their operations. Here you’ll read about not only what our Recycling Market Development Office does, but also about successes stories from businesses in South Carolina. Many small businesses focus on selling to customers in their immediate area, but Commerce can help a business reach markets in all corners of the world. The Export Services Program can provide guidance in a range of areas, from product export potential to market research on areas where a product might sell. The program provides a door to the world for small businesses. Small businesses are critical to the economic success of South Carolina. We hope this insert will provide information that will help them find more success and continue to grow.
Amy E. Love Editor
1201 Main Street, Suite 1600 Columbia, SC 29201-3200 (803) 737-0400 | (800) 868-7232 sccommerce.com
Contributing: Lydia B. Dishman, writer Darrell Snow, photographer Published by
Robert M. Hitt III S.C. Secretary of Commerce www.scbiznews.com
2 A publication for the S.C. Commerce Department
Where business help begins The Small Business Development Office and SCBIZNetwork.com
mall businesses needing advice and assistance in our state should head for one destination: The South Carolina Department of Commerce’s Small Business Development Office. And that service is now available 24 hours a day through the South Carolina Business Network at SCBizNetwork.com. The service provides resources to small businesses and entrepreneurs who want to bring their business concepts to reality. The Small Business Development Office, which maintains the innovative micro website, connects new and existing businesses with a myriad of training and development programs and other resources to support growth and keep costs in check. The office focuses on: • Existing Business Support • Small Business and Entrepreneurial Development • Export Development* • Recycling Market Development*
Existing Business Support
For existing companies, business specialists are available to assist with specific needs, such as workforce development, regulatory assistance and export development. Other areas where support is available are supplier/supply chain development, production and process improvements, emergency preparedness, recycling and finance.
ess in S.C. Small Busin all business:
New and growing businesses can receive individual counseling. The assistance includes one-on-one support to guide them to resources for business planning, finance, workforce, marketing, regulations and other issues. Sources of assistance include:
South Carolina Business Network
(SCBizNetwork.com, a Small Business microsite): The network is a gateway to information and services relating to preparation, business operations, marketing and e-commerce, financial and accounting issues, human resources and occupational health and safety. Once basic information is entered, the website compiles a customized list of local resources. A calendar of business events and a Q&A section are also available.
Small Business Resource Guide
Designed as a comprehensive handbook of tools and resources to increase success, the guide lists and explains state, regional and local outlets with contact information. Topics covered are: getting started; licenses, permits and regulations; financing; marketing; workforce development; and business operations.
The BuySC Program
This program is a buyer/supplier service that helps businesses connect with in-state suppliers, buyers and service providers. On the Buyer side, Commerce staff meets with owners, purchasing agents and prime contractors to identify a detailed list of products and services needed. Then qualified suppliers, vendors and contractors are matched with needs, and a list of South Carolina suppliers is given to the company. On the Supplier side, Commerce staff meet with companies and gather product and service information, which is stored in a database. The suppliers receive help identifying potential customers among S.C. companies. Online request forms for buyers and suppliers are in the BuySC section of the SCBizNetwork. com micro site.
The Small Business Regulatory Review Committee
Supported by Commerce, the Small Business Regulatory Review Committee is a watchdog for business on the effects of regulations. Sanctioned by the Legislature, the 11-member committee reviews all proposed regulations to determine whether they would be especially tough on small business. The committee is made up entirely of small business owners: five appointed by the governor and three each appointed by the President Pro Tempore of the Senate and the Speaker of the House of Representatives. If the proposal has an adverse impact, the agency proposing it is directed to prepare an economic impact study and look for other options.
The Small Business Advisory Council
The members of the council, all South Carolina small business resources providers, are the South Carolina Department of Commerce, U.S. Small Business Administration, the Small Business Development Center, U.S. Department of Agriculture, South Carolina Manufacturing Extension Partnership and Michelin Development Corporation. The council’s initiatives include establishing joint programs to help small business, improving outreach through technology, providing new business opportunities through BuySC and other programs, creating opportunities for small businesses and potential owners to meet with financial institutions one-on-one; and developing comprehensive statewide reporting metrics on small business successes.
* Information about the Small Business Development Office’s Export Development program is on Page 7 and Recycling Market Development is explained on Page 8. A publication for the S.C. Commerce Department
finition for a sm The working de employees. fewer than 50 101,773 ployer firms, or 95% of total em ployees em 50 fewer than ve ha s, er oy pl em er firms, or orking in employ 45% of those w s of fewer m ployed with fir 649,357, are em ees than 50 employ s ployer businesse 280,119 non-em nerate receipts ge ) es ris rp te (single-person en 0 billion of more than $1 ent of Commerce Source: S.C. Departm
Small Business and Entrepreneurial Development
right match Matchmaking event gives business owners
incomparable access to lenders, advisors
4 A publication for the S.C. Commerce Department
The Commerce Department partnered with the Federal Reserve Bank of Richmond to create the lender matchmaking program to help the state’s small businesses make the connections that could help them secure financing. Other sponsors include the S.C. Bankers Association, the S.C. Chamber of Commerce, the S.C. Credit Union League, the S.C. Small Business Development Centers, National Federation of Independent Businesses, the U.S. Small Business Administration and the U.S. Department of Agriculture. Campbell says, “We can help businesses learn about other types of loans out there.” That’s why banks weren’t the only lenders present at the matchmaking event. The Commerce Department also recruited
available from SCORE and the state’s CPA association. Representatives from the S.C. Small Business Development Centers were helping participants improve business plans, said State Director Michele Abraham. They also helped participants identify new markets and uses for their products, or assisted with identifying sources of capital other than bank loans. “We helped South Carolina companies get more than $1 billion in contracts with the government last year,” Abraham said. “They may be landscaping or making linens. The government needs a lot of services, and we can help businesses go through the steps to get those contracts.” Chuck Bundy, the Commerce Department’s deputy director of Small Business and Existing Industry says the lender matchmaking event even helps businesses that don’t yet exist. “I talked to someone who came in wondering if his idea was sound enough to turn into a business who left convinced he could get financing from at least four potential lenders.” In addition to the introductions to potential lenders, Bundy maintains that the feedback about how to tweak a business plan, marketing efforts or a management team is invaluable to participants. “I’m hearing ‘no’ (from bankers) but they are giving me directions on talking to other people,” said Cathy Talley, who plans Michele Abraham to adjust her business plan according to director, S.C. Small Business Development Center lenders’ suggestions. Talley wants to open a barbershop and day spa for men in downtown Spartanburg. She’s been pursuing her dream of credit unions and micro-loan programs like becoming a business owner since she lost her job when Tyco Electronics closed Appalachian Development Corporation, its Spartanburg manufacturing plant in Michelin Development Company and the 2007. Greenville Housing Fund to hear pitches. Campbell says, “The sessions helped to The day-long event began with a panel educate people on some of the mechanics discussion featuring representatives from a on how startups can raise capital. On the range of lenders speaking about accessing capital and understanding lenders’ perspec- flip side, established businesses learned tives. Another panel discussion highlighted about relationships and how a bank will small business owners on overcoming barri- become part of your business through the ups and downs of the economy.” ers during the recession. Bottom line, says Campbell: “The mesAfterward, participants could sign up for 15-minute time slots with as many lenders as sage was that money is out there for good they could fit into a two-and-a-half-hour ses- projects; and there are resources available to help businesses prepare for funding.” sion. The slots were first come, first served. The next lender matchmaking event was In one hour, a borrower could meet four scheduled for Rock Hill earlier in May, with potential business partners, and a banker future dates for Charleston in September could meet four potential customers. and Florence in November. • Small business counselors were also
“We helped South
Carolina companies get more than $1 billion
in contracts with the
government last year.”
ong-time real estate developer David Norton is looking for capital to build a pub in one of his commercial buildings. After 38 years in real estate, Norton has seen a decline in the commercial real estate industry. Development costs are rising while property values are declining, he observes, adding that capital has dried up for many real estate development projects, too. “I’ve used a lot of my savings. I‘ve used a lot of my IRA to keep things going. I’m 63. Who’s going to hire me?” Norton said. But Norton is betting there is a match made in funding heaven for him out there. So he, along with70 other hopefuls, attended the business-lender matchmaking event organized by the S.C. Department of Commerce in Greenville. Each had exactly 15 minutes to pitch a business plan to potential lenders. As in speed dating, once time was up a bell rang and participants moved to pitch to another lender. Ted Campbell of the Existing Industry Program at the S.C. Department of Commerce says he understands that business owners seeking capital are caught in a tougher environment. “With the economy and regulations, many companies know that the game has changed,” he says. Lending became scarce during the recession. Loans and leases held by South Carolina-based banks have been cut in half since 2009, according to data from the Federal Deposit Insurance Corporation. As of Dec. 31, banks headquartered in South Carolina held a combined $23.8 billion in leases and loans, nearly identical to the amount reported 10 years ago, but down from $40.5 billion at the end of 2009. Assets have also been cut – from $56.7 billion to $37.5 billion – as banks rid their books of problem loans and foreclosed real estate. Even popular government-backed lending has begun to subside. The U.S. Small Business Administration reported nearly $34.95 million borrowed in South Carolina under its 7(a) loan program during the quarter ending Dec. 31. That’s down 64% from $97.2 million during the prior-year quarter. Banks approved 69 loans during the quarter, down from 116, the SBA reported. But based on FDIC data, South Carolina’s banks returned to collective profitability at the end of 2011, after two years of losses. That could free up capital for lending.
5 A publication for the S.C. Commerce Department
Why It Pays To
Buy Local BuySC program connects suppliers with customers within the state
t’s hard to imagine that a business that prides itself on providing excellent customer service and offering highquality parts at competitive prices could ever falter. But thanks to the downturn in the automotive industry, Columbia Tool & Die’s customer base was shrinking. Stephen King, general manager of the Columbia Group, says, “The company was losing ground because of the economic recession. Our technology and expert workforce could not survive without new customers in new industries.” Close to laying off several employees, Columbia Tool & Die sought out the support of the state’s group of manufacturing specialists, the South Carolina Manufacturing Extension Partnership (SCMEP). After consultations and strategic planning, “monthly sales increased and Columbia Tool & Die was able to save jobs,” King said. A major part of that turnaround was realized when Columbia Tool & Die added Boeing to its stable of clients. Chuck Bundy,
deputy director of Small Business and Existing Industry at the S.C. Department of Commerce, says this connection was made through the BuySC program, which helps link suppliers of goods and services with potential customers within the state. “Once the company decided they wanted to go after the aviation business and became AS9100 certified (an aviation quality requirement for companies), Boeing agreed to ‘showcase’ them in a 30-minute Webex exchange,” says Bundy. “Columbia Tool & Die presented to Boeing through BuySC and ultimately qualified as a supplier of perishable tooling for Boeing’s facility in South Carolina.” “We diversified and grew our customer base, developed new industries, and also achieved AS9100 certification,” King said. The BuySC program’s team uses a comprehensive network to match a company’s needs with in-state resources. Bundy says they are trying to provide a targeted locator service to help companies control costs and delivery times in order to
Columbia Tool & Die was able to save jobs at its West Columbia plant when it secured work for Boeing through the BuySC program.
6 A publication for the S.C. Commerce Department
be more competitive in today’s economy. Bundy explains that in some cases businesses call looking for something specific such as a supplier to make industrial bags or machined engine parts. “Or they are looking at doing more sourcing closer to home, and sharing with us some of those key parts, which were previously coming from China or Mexico,” he says. “Likewise, on the supplier side, we have suppliers who call, looking for business with a new announced project, or expansion. Sometimes they call wanting help with an introduction to an original equipment manufacturer (OEM), or another 1st tier, or 2nd tier, supplier, just to get more business or increase utilization of excess capacity.” Bundy says both buyers and suppliers are encouraged to add their requests or company information to the BuySC program’s database online. There is no charge for the service. Bundy notes that the BuySC program helped Nephron Pharmaceuticals Corporation, a recent announcement for Lexington, S.C., capture potential suppliers for both construction contracting and future operational needs. “The success of small and diverse businesses is important to strengthen the local, regional and global economy,” says Ray Healy, production engineering director for Boeing South Carolina. “Columbia Tool & Die was part of the Boeing showcase in September 2011, which is a successful collaboration between Boeing, South Carolina Manufacturing Extension Partnership and the South Carolina Department of Commerce. Through this process, qualifying small businesses have a great opportunity to showcase their capabilities and establish a direct line of communication with Boeing.” Says Bundy: “We are just trying to make mutually beneficial matches for South Carolina companies.” •
e e Do
at t e r sn’t M
Small Businesses Can (and Should) Be Exporters, Too
ou don’t need to have annual revenues in the millions, or employ hundreds of people to get into the export business. Just ask Marilyn Becker, president of Transfer Point, Inc., a Columbia-based immune supplement distributor. With only four employees, Transfer Point exported $600,000 in products in 2011 to several countries in Europe and Asia. That’s an increase of 15 percent over the prior year. To make the connection with a major distributor in South Korea, Becker says, “The U.S. Department of Commerce and the S.C. Department of Commerce provided assistance with preparation for our visitors, attended the meeting, and explained the various programs that the United States can offer exporters. Our visitors were quite impressed with their presence at the meeting.” She adds, “I believe it added to our credibility.” Transfer Point was also a recipient of the State Trade and Export Promotion Program (STEP) grant. STEP is a 3-year pilot trade and export initiative authorized by the Small Business Jobs Act of 2010 to help increase the number of small businesses that are exporting and to raise the value of exports for those currently exporting. Anita Patel, S.C. Department of Commerce International Trade specialist, says the STEP
grant program provides small businesses with assistance to bridge the cultural divide including help setting up appointments with buyers in country and translation services. The South Carolina Department of Commerce Export Services Program also includes seminars and conferences offering trade guidance, evaluation of product export potential, determination of export prices, and market research to identify key foreign markets. Clarke Thompson, International Trade Director at the S.C. Department of Commerce, says the average business they’ve assisted has about 40 employees. “Those are the ones who often ask for expertise and help the most.” Thompson says small business owners typically have multiple duties running the company, handling sales and marketing efforts, and more. But larger businesses can use assistance, too, usually in logistics. Patel says exporting can benefit companies of all sizes. “Studies have shown that companies who export have higher productivity rates, pay better, give better benefits, experience faster growth, are less likely to go out of business than those companies who do not export,” she explains. And the opportunities are plentiful.
An estimated 95 percent of the world’s customers and more than 70 percent of the world’s purchasing power are located outside the United States. Yet, less than one percent of America’s 30 million companies export – significantly lower than all other developed countries. And of U.S. companies that do export, 58 percent export to only one country. Thompson says he has not seen a small business owner get cut out of a sale or a market because of competition from a larger company. The key to successful exporting, rather, is in perceived quality of product and personal customer service. “We in the U.S. will do business with those we don’t know personally to make a sale,” notes Thompson, “The rest of the world isn’t like that. For example, in Latin America it may take a year to establish relationships before exporting can begin. In Asia, it may take two to three years. Personal attention to the customer is very important.” If a company isn’t quite ready to export, Thompson says they’ll be referred to other organizations for mentoring. But it’s worth going through the paces, Patel maintains, to have economic stability. “It’s like putting your eggs in several baskets. Companies that were exporting weathered the recession better than companies that didn’t.” •
S.C. Exports | By the Numbers Top 5 in 2011
That’s the total dollar value of exports in 2011 to 198 countries, and is up 21 percent from 2010.
percentage customers located outside the U.S.
percentage of purchasing power outside the U.S.
percentage of U.S. companies that export
BY VALUE OF PRODUCTS Vehicles.......................................... $8.1B Machinery.................................... $4.35B Rubber........................................... $1.9B Electrical machinery......................... $1.5B Plastic............................................ $1.2B
BY Market sHARE (Destination) Germany..........................................16% Canada.............................................15% China................................................12% Mexico...............................................7% United Kingdom..................................6%
7 A publication for the S.C. Commerce Department
Boost the Bottom Line
By Recycling P ssst, business owners. Want to find an easy way to boost your bottom line? Check your trash. Chantal Fryer, senior manager of Recycling Market Development at the S.C Department of Commerce notes businesses that recycle can realize significant cost savings by avoiding disposal costs. Fryer explains that is what occurs when a business diverts materials from the trash bin to the recycling bin. “Companies can usually find a recycling budget within their current waste budget – it’s just a matter of moving dollars from the trash disposal to the recycling line item. When compared to the cost for trash, recycling services usually cost less,” she says. Fryer says small businesses in South Carolina have the most to gain by recycling. “Small businesses are always struggling to
Average Landfill by Weight
Paper .................. 31% Food Scraps ......... 13% Yard Trimmings..... 13% Plastics ................ 12% Wood .................... 7% Ferrous ................. 6% Glass ..................... 5% Textiles .................. 5% Rubber & Leather .... 3% Other .................... 2% Aluminum ............. 1% Other Nonferrous .... 1% Misc. Inorganic ...... 1%
Recently, Commerce staff helped an Aiken waste hauler, Dumpster Depot, change its business model to include recycling services. According to Norman
8 A publication for the S.C. Commerce Department
operate more efficiently and with lower costs, striving to operate leaner, meaner, and cleaner,” she says. Recycling helps with those goals. “Switching from waste management to recycling their materials is a smart solution to effectively operate in the current business environment,” she says. But don’t just take her word for it. In the restaurant business, for example, Drunken Jacks & Inlet Affairs in Murrells Inlet saved at least $200 per month by recycling with Fisher Recycling instead of putting their waste in the trash bin. Fisher asserts that recycling reduces the frequency of Dumpster pulls, and a commingled collection means that all glass, plastic, aluminum and tin from the restaurant can be placed in the same bin, saving time and organizational space, in addition to costs. Cooper Standard Automotive in Spartanburg increased its recycling rate from 40 percent to 78 percent of all its waste. By finding a vendor for most of the company’s plastic waste, the diversion resulted in a $49,300 per year cost savings and prevented 1,356,000 pounds of material from going to a landfill. In the Midlands, Select Comfort went from spending $8,000 a month on landfill fees to making $2,800 in revenues from recycling its cardboard, textiles, and other office materials -- a $10,800 per month net change in cash flow. Fryer says there is no rule of thumb on how much a business can save by recycling since it varies with the type of establishment
and the service provider’s fees as compared to waste disposal costs. She does say that municipal solid waste disposal costs can range from an average of $36 to a high of $66 a ton. “Each company has to look at their waste and decide what is recyclable and has markets close by and what is more of a challenge to get recycled,” Fryer advises. Businesses can go to the Department of Commerce website or call for a directory of recyclers in their area. According to DHEC, South Carolina recycled 8 million tons of waste between 2003 and 2011, with a current recycling rate of 27.1 percent. Which means there is room to improve as well as help boost the state’s economy. Recycling creates employment opportunities, which range from low-skilled work such as sorting materials to mediumand high-skilled jobs including collection, materials handling and processing to manufacturing products. But Fryer says many businesses would be surprised to find out how many “cool products” are made from recycled material. “The bottle you recycle today can become a T-shirt tomorrow from a Carolinas-based supply chain,” she points out. SustainTex is one such company that is making T-shirts from recycled PET bottles. “Jack Miller from SustainTex is an entrepreneur who contacted Commerce about his product and we have helped with supply chain and marketing,” Fryer says, “So recycling is easy to do and it’s important.” •
Dunagan, CEO of Dumpster Depot, “For ten years my company has been operating on the paradigm ‘bury it in the landfill.’” Then Dunagan met Chantal Fryer of the Recycling Market Development team at the Department of Commerce. Dunagan says Fryer assisted by connecting Dumpster Depot with other recycling businesses that could help divert waste away from the landfill and back into South Carolina’s economy. Fryer’s assistance didn’t stop there.
Dunagan says she continues to provide his team with information and online resources Commerce offers small businesses, as well as sending updates via email of networking opportunities with like-minded businesses in the state. The Dumpster Depot set a goal of diverting 1 million pounds of waste in its first year. Says Dunagan: “With Chantal’s help, our Greenworks service diverted more than 4 million pounds away from South Carolina’s landfills.”
MADE IN S.C.
S.C.'s rural communities play role in industrial rebirth By Chuck Crumbo, Staff Writer
hile most of last year’s $4.7 billion worth of economic development announcements were aimed at South Carolina’s metro areas, 37 projects landed in the state’s small
towns. All of the announcements were hailed by state and local officials, who cited the manufacturing renaissance that has burnished the state’s reputation at making just about anything from luxury automobiles to tires to wide-body passenger planes. The deals ranged from a $14 million investment by Masonite International to make molded interior doors in Denmark to Schaeffler Group USA’s plan to invest $10 million in expansion of the company’s plant in Cheraw. Some of the deals involved companies such as ESAB Welding & Cutting Products,
which plans to invest in a Union County facility that will eventually replace its operations in Ashtabula, Ohio. Other companies said they were moving jobs to the United States from abroad. In one such case, A&K Textiles plans to open a new cut-and-sew production operation in Barnwell County, relocating its operations from Alexandria, Egypt. All of the announcements are precious to the state’s rural communities, said Gov. Nikki Haley, who grew up in Bamberg, population about 3,600. “These are treasure pockets that we have throughout the state,” Haley said in a speech at the 2012 S.C. Rural Summit in Greenwood. In each instance, the announcements meant more jobs for a state where the jobless rate in April was 8.8% -- well above the
national average of 8.1%. But in the rural areas of South Carolina where the unemployment rate can be significantly higher than the state average, local officials were especially grateful. “New jobs are exciting and our citizens are anxious to get to work,” said Dwight Stewart, chairman of Clarendon County Council, in November following Alucoil America Corp’s announcement. The company is investing $5 million in a new plant to make composite building materials, creating 18 new jobs. Clarendon’s jobless rate was 13.1% in March.
‘A good track record’ Bringing manufacturing jobs to South Carolina has been the top priority of Haley and Commerce Secretary Bobby Hitt. Hitt said 21% of all new jobs announced
MADE IN S.C. www.scbizmag.com
A worker at Accuride inspects a forged aluminum wheel. The plant in Kershaw County was acquired in 2011 and employs about 80 people. (Photo/Jeff Blake)
MADE IN S.C.
Accuride rolls into Kershaw County CAMDEN – As the commercial vehicle industry pressed to improve fuel efficiency and replaced its aging fleet, Accuride Corp. saw a need to increase manufacturing capacity for lightweight, aluminum wheels. Projections showed that the peak industry cycle demand was due to hit in 2013-2014. So in June 2011, Accuride – which last year posted $936.1 million in revenues – announced it had bought substantially all the assets of Forgitron Technologies for $22 million cash. Located off Black River Road near the interchange of U.S. 521 and I-20, the plant is included in Accuride’s efforts to increase aluminum wheel manufacturing capacity at plants in Erie, Pa., and Monterrey, Mexico. Not only did Accuride get a modern, 80,000-square-foot plant in the deal, it also retained about 80% of the Forgitron workforce, saving dozens of jobs. The acquisition strengthened Accuride’s core product offering, but it also put the Evansville, Ind.-based manufacturer closer to its original
equipment and after-market customers in the Southeast. Everything came together to make the deal work, said Don Krampe, director of operations at the Camden facility. Locating in Kershaw County made sense because of the workforce needed to run the manufacturing operation and financial incentives offered by local and state government. Accuride presently employs about 80 people in Camden, a company spokeswoman said. And it will be adding another 25 jobs following the company’s investment of $8.7 million in two new machine lines.
Phoenix makes ‘lot of parts for lots of people’
BAMBERG – Back in the 1960s, Robert Hurst Sr. came down from New York to visit his Navy buddy, Frank Hartzog. The two had served aboard the U.S.S. Ticonderoga in World War II. Hartzog, at the time, was the owner of Ziggy’s Motel and Restaurant, on a wide, four-lane stretch of U.S. 301 in downtown Bamberg. Hurst enjoyed his stay so much that he decided to move to Bamberg. Not only did he bring his wife and kids, Hurst brought his company. Hurst was then executive vice president of the family-owned business – Phoenix Specialty – which made special washers and gaskets. In 1966, he founded a separate company, Phoenix Southern Washer & Gasket, in Bamberg to increase production and improve the company’s competitive edge. Ten years later Phoenix relocated all manufacturing to Bamberg. These days Phoenix Specialty occupies two buildings – one of them a 150,000-square-foot manufacturing facility and warehouse – on both sides of U.S. 301, south of Bamberg. Phoenix’s niche, says Hurst’s son, Robert Hurst Jr., “is making a lot of parts for lots of
people.” The company, with 94 employees, specializes in made-to-order specialty washers, shims and precision stampings for some 2,000 customers. Phoenix has about 450 million parts in stock, representing 90,000 separate lot numbers. Aerospace makes up about 40% of Phoenix’s business. A prime customer is GE Aviation in Greenville, which makes jet engines. Hurst Jr. praised the quality, work ethic and loyalty of the company’s employees. The average length of service is about 20 years at Phoenix Specialty, which offers full benefits and profitsharing. Turnover is less than 5% a year.
since Haley took office in January 2011 have landed in rural counties. Rural counties are getting the administration’s attention because their jobless rate is so much higher than the state’s metro areas. “It’s important that we work on it faster,” Hitt said. Often, it’s a matter of fitting the companies planning to expand or move to South Carolina to the available workforce in terms of skill sets and education, Hitt said. In all cases, though, companies want to make sure they can make a profit and have enough quality labor to make their products, whether they are luxury boats or windows. “Companies need a loyal workforce that will show up and work,” Hitt said. “We have a good track record of people who take a job and show up.” The ability of the state’s workers to make quality products like luxurious BMWs and Boeing 787 Dreamliners has cemented the reputation of South Carolina’s workforce as a “premium brand,” Hitt said. “South Carolinians are very capable of training and growing into these jobs.” What manufacturing jobs represent, observers say, is long-term economic growth. A new company bringing 150 jobs to a community of 3,000 could have an impact similar to BMW’s arrival in the Upstate, observers say. Originally projected to provide 2,000 jobs when it opened in 1994, BMW Manufacturing now employs more than 7,000 people. Through its suppliers and support positions at the manufacturing facility, BMW’s investment has created another 28,000 jobs. While significant for the community, many of the rural economic development announcements may not have the same impact of a BMW on the local area, said Joey Von Nessen, an economist at the Darla Moore School of Business at the University of South Carolina. “The reason is that the total economic impact depends largely on the supply chain – that is, the economic ripple effect of the manufacturer spending dollars with their suppliers to obtain necessary inputs,” Von Nessen said. Von Nessen offered the example of a manufacturing facility in a rural area and
recover their costs. If not there in the first place, the jobs won’t be there.” The state also helps rural communities spruce up their image and build infrastructure through self-help efforts and federal grants. At the Rural Summit in March, Haley called on local leaders hoping to recruit companies to take a good look at their communities. Drive from one end of town to the other and try to look at the community the same way a visiting corporate executive might see the courthouse square, the governor suggested.
If buildings are dilapidated or in need of a new coat of paint, then the community needs to spruce up, Haley said. “We need to go through these small towns and bring that charm back,” Haley said. “We need to take a look at everything that made a small town beautiful at one time.” Looks are important, Hitt said. Prospective companies want to “locate in a place that looks like it’s successful and meet with people,” he added. New firms look at everything in a town from retail to restaurants, Hitt pointed out.
MADE IN S.C.
one in an urban area – both of which hire 200 workers. If suppliers of a manufacturer in an urban community locate in the same area, then both the direct impact – the hiring of the 200 workers – and the indirect impact – the purchasing from the vendors/suppliers – will affect the local community, Von Nessen said. “If, however, the vendors are not located in the same area, as might be the case with the rural manufacturer, then only the direct impact – the hiring of the 200 workers – would affect the local community, while the indirect impact would occur in whatever area the suppliers are located.” Still, money spent by the manufacturer in the community will be the same whether it’s rural or urban, Von Nessen said.
Putting on the best face
South Carolina has employed a number of tools to spur economic development outside the metro regions of Charleston, Columbia and Greenville-Spartanburg. One example is a new electric rate offered to industrial customers by Santee Cooper and the state’s 20 electrical cooperatives. The rate – considered an economic incentive – can reduce an industrial or distribution facility’s power bill as much as 20% depending on the size and characteristics of the electric load. The rate is available to a company that’s already in or is considering moving into a Santee Cooper or co-op service area. The firm must commit to creating 35 new jobs or investing a minimum of $500,000 per 1,000 kilowatts of demand, said Fred Gassaway, executive vice president for marketing for the SC Power Team. The rate reduces the demand charge over the first four years after a qualifying industry begins operation, Gassaway said. Typically, the demand charge could represent as much as 40% of a firm’s total power bill. The reason the charge is reduced for four years is that it usually takes three to four years for most firms to recover capital costs associated with a new facility, Gassaway said. “It helps them get into the black a little quicker,” Gassaway said. “They still have to
MADE IN S.C.
Integra keeps S.C. tradition alive in textile industry
LORIS – South Carolina’s textile industry is still in business these days thanks to companies like Integra Fabrics. “Textiles are very much a traditional industry for the Carolinas,” said Debbie McArthur, Integra president. A privately owned firm, Integra specializes in custom printing fabrics used in commercial settings – from hotels to hospitals. The fabrics – wovens, vinyls, sheers, prints and upholstery – all are custom designed for the customer, McArthur said. One example she offered was the design printed on a hotel’s drapes. “You want the design of the fabric to reflect the location,” she said. Drapes in a Key West, Fla., motel may have a beach design with bright colors. “It’s not what a business traveler would see in a hotel in Chicago.” Founded in 1988, the company moved its operations from the Upstate to Horry County in the mid-1990s. Initially, Integra operated from a two-story house on 37th Avenue in Myrtle Beach and consisted of three employees – McArthur,
founder and CEO Terry Purcell, and a staffer. Now it’s in a modern, 70,000-square-foot facility on the outskirts of Loris, a town of about 2,700 in northern Horry County. Integra, with about 30 employees, plans to add 10-15 workers as it expands services. Future customers will be able to buy fabric from Integra, have it custom-printed at the Loris facility, and then fashioned on the company’s sewing machines into drapes or bed coverings. Bringing sewing in-house will improve quality control and meet customers’ needs for a fully integrated provider of commercial fabrics, McArthur said.
To help communities shore up their infrastructure, the Commerce Department helps officials tap into Community Development Block Grant funds, Hitt said. In August, Hitt’s agency announced that 37 communities received a total of $16.3 million for a variety of projects from improving existing water and sewer systems to upgrading services to meet environmental and health standards. About 82% of the money went to 31 communities in the state’s less-developed counties. The projects fit into the state’s efforts to “set the table” for economic development by reducing the amount of time companies need from announcement of a deal to startup. Once, communities had the time to put in the necessary infrastructure after an economic development announcement, Hitt said. “Today, companies want to move. Velocity is a key issue.” Communities also need to find the best way to market themselves to a prospective employer, Hitt added. “You have to be what you are,” Hitt said. “Then, let’s go sell it.”
We know about BMWs and tires and forestry products, but who knew fire trucks and hunting rifles were made in S.C.? Here is a small sampling of some of our state’s products you might not know about, provided by the S.C. Manufacturers Alliance. For more, see www.madeinsc.org.
Made by: Honda of South Carolina Location: Timmonsville, S.C. (Florence County) About the company: Honda of South Carolina makes all-terrain vehicles and personal watercraft, in an effort to build products close to where its customers are. The plant is one of 12 major Honda factories in North America. It is one of the top employers in Florence County and the PeeDee region.
Location: Duncan, S.C. (Spartanburg County) About the company: AFL Telecommunications is an industry leader in fiber optic products, engineering expertise and integrated services to the telecommunications industry. Its products and services allow communications companies to provide high-speed voice, video and data services. Its expertise serves a variety of markets from consumer to electric utility, enterprise and private networks.
Freightliner Custom Chassis Corp.
STOUFFER’S SPAGHETTI www.scbizmag.com
Location: Gaffney, S.C. (Cherokee County) About the company: Freightliner Custom Chassis Corp. manufactures premium chassis for the motorhome, delivery walk-in van, and school bus and shuttle bus markets. Recently, the company secured an order to supply the U.S. General Services Administration with 100 commercial bus chassis. Freightliner Custom Chassis Corporation is a subsidiary of Daimler Trucks North America LLC, a Daimler company.
Made by: Nestle’ Prepared Foods Co. Location: Gaffney, S.C. (Cherokee County) About the company: The South Carolina plant of Nestle’ processes and packages foods for Stouffer’s and Lean Cuisine frozen food products. It is one of the company’s 25 manufacturing plants across the United States. More than 1,500 employees work at the Gaffney plant. Nestle’ USA is part of Nestle’ S.A. in Vevey, Switzerland.
MADE IN S.C.
Some things you might not realize we make in S.C.
MADE IN S.C. www.scbizmag.com
Location: Ladson, SC (Charleston County) About the company: American LaFrance is an emergency and vocational vehicle manufacturer. The company is one of the oldest and most widely known fire apparatus manufacturers in the U.S. Its roots go back to 1832, when the company built hand-drawn, horse-drawn and steam-powered fire engines. Today it focuses on emergency apparatus fire engines and fire aerial, including ambulance and rescue vehicles.
Location: Charleston, SC About the company: Folbot makes lightweight folding kayaks that can be transported in a bag. Manufactured since 1933, the Folbot has been modernized and simplified making them easy to use for beginners and experienced paddlers. The kayaks come in four models with various features, and they can be checked as luggage when traveling. Folbot sells its kayaks directly to customers.
Location: Jackson, SC (Aiken County) About the company: Jarrett Rifles started out as a custom rifle builder more than 30 years ago, but has since become a custom rifle manufacturer. The company makes all the major components of its rifles and tests each one by firing 150 rounds on its own range to test accuracy and repeatability. The company began when Kenny Jarrett could not find a rifle that met his standards. So he started his own company to make “the World’s Most Accurate Hunting Rifle.”
Location: Duncan, SC (Spartanburg County) About the company: STAUBLI Corporation in South Carolina is the headquarters of STAUBLI North America. Staubli Robotics makes precision and high-speed robotics. Its robots are used worldwide in assembling, handling and process applications. Staubli Connectors develops industrial connections for automotive, aeronautics, plastics, motorsport, railway, nuclear and offshore uses. Among its products are connectors for all fluids, gases and liquids, magnetic or hydraulic clamping units and multicoupling systems or toolchangers.
By Scott Miller, Staff Writer
MADE IN S.C.
South Carolina banks have different look from five years ago – from names on signs to balance sheets
a growing Columbia-based bank that has acquired three failed institutions. “We have to be able to control the assetquality issues,” he said. South Carolina’s banking industry looks much different than it did five years ago, from the names on the signs to the size of the balance sheets. In five years, there has been 26% turnover in banks operating in South Carolina, according to analysis of Federal Deposit Insurance Corp. data. That is, 28 of the 107 here in 2007 either abandoned the market, merged into another company, or were closed and sold by federal regulators. They’ve been replaced, as there are still
106 banks operating here. New names dot the streetscape: TD Bank; Fifth Third; BNC Bank; Park Sterling Bank; Bank of the Ozarks; and CertusBank. Others have faded away: Carolina First; Bank Meridian; Community Capital; Atlantic Bank and Trust; CommunitySouth; Beach First National; and others. The trend has not favored homegrown, locally owned banks. In 2006, there were 95 insured banks headquartered in South Carolina. Today, there are 76, according to the Federal Deposit Insurance Corp. Those banks employ 8,960 people, almost 2,400 fewer than five years ago.
Federal regulators post notice of the closing of First Savers Bank in Greenville. The bank was sold to First Financial Holdings Inc. of Charleston in April. (Photo/finFOTO)
he relationship Upstate Sen. Lee Bright had with his lender soured after his bank was closed and sold by federal regulators. Bright’s business, On Time Transportation of Roebuck, had been working with its bank to get through hard times, according to a legal battle between Bright and his new lender. His original lender, Spartanburg-based First National Bank of the South, was closed by federal regulators in 2010. It was sold to Capital Bank, a North Carolina group led by former Bank of America executives. Capital Bank foreclosed on On Time’s property in December. Bright filed a counterclaim. His suit claims Capital Bank refused to honor First National’s agreement and would not accept payments from On Time after June 2011. Both cases are pending. Neither Bright nor Capital Bank responded to requests for comment. The strained relationship spotlights tension in a changing industry in South Carolina. Bad loans have slashed bank profits and shareholder returns. Federal regulators have closed banks. New banks have entered the market. Long-time relationships have fallen victim to the cleansing of bank portfolios. “Every bank has a customer bulls-eye (for credit worthiness). Some customers might not fit into the new culture,” said Craig Nix, CFO of First Citizens Bank and Trust,
BANKING A worker installs a TD Bank sign at the former Carolina First bank branch in downtown Greenville. (Photo/S. Kevin Greene)
A third of banks based here are unprofitable, according to FDIC figures. That figure was 12% five years ago. Since the end of 2008, South Carolinabased banks have shed nearly 33% of their assets, FDIC data show. Today, the state’s banks collectively hold $37.5 billion in assets. That downsizing of assets has not been the national trend. There are fewer banks operating nationally – 7,357 compared to 8,680 five years ago – but they hold more assets. Nationally, insured banks hold $13.9 trillion in assets, up nearly 17% from 2006. Industry consolidation means larger, regional and national institutions are controlling more assets and that’s a problem, said Tony Plath, a banking professor at the University of North Carolina at Charlotte. “It removes credit decisions from local control,” he said. “I like to have decentralized financial power.” “You could argue that lending is more
objective, but I don’t know that objectivity is always in the best interest of the local community,” Plath said. “You can save some borrowers based on that local knowledge.” Industry downsizing has been a good thing, said Walter Davis, co-CEO of CertusBank, a Greenville-based institution launched in 2010 by former executives of Wachovia and Bank of America. “Competition is a good thing. Too much competition can be unsettling and drive behaviors that are not good for the industry as a whole. Too much competition drives prices and causes banks to behave erratically,” Davis said. Certus aims to be a $5 billion bank – it’s around $2 billion now – and is growing by acquiring failed banks from the FDIC. In this changing industry, the larger banks will survive, Davis said. “The market is speaking for itself,” Davis said, saying investors are looking for larger
have either abandoned the market, merged into another company, or were closed and sold by federal regulators since 2007
banks that can provide greater returns. Those larger, national banks can maintain some local autonomy, bankers said. TD Bank, as in Toronto-Dominion, acquired The South Financial Group in 2010. South Financial owned the state’s largest bank, Carolina First, and was bleeding money. The Greenville-based company lost nearly $1.4 billion over a two-year period beginning in 2008. But TD has left decisions on customer creditworthiness and lending to the local executives, said Rob Hoak, TD Bank’s regional president for the metro Carolinas. “We have the ability to approve 85 to 95 percent of the credit requests we get (locally),” said Hoak, who is based in Greenville. TD’s U.S. headquarters in the Northeast holds sway on the largest loans here. When TD Bank acquired South Financial, it expected to eat $1 billion in bad loans on the bank’s portfolio. Preserving customers or the relationships with them has not been a problem, Hoak said. TD continues to work through South Financial’s problems. He noted that as one of the world’s only AAA-rated banks, “you can afford to work through your problems very thoughtfully,” Hoak said. Banks will need five years or more to overcome real estate losses, said Claude Lilly, dean of the Clemson University business school and chairman of the Charlotte branch of the Federal Reserve Board of Richmond. That includes loan maturation and the time needed for devalued real estate to come back, he said. As that happens, industry executives and analysts agree that more closures are likely. Guessing how many is a loser’s game. “Banks are barely holding on, and regulators are going to be overly cautious,” Lilly said. Stockholders are becoming impatient, he said. “They’re looking at mergers,” Lilly said. “They’re looking at taking out their money in banks and putting it in something with greater returns.” The days of launching a bank and building it to sell are gone, in the short run anyway, he said. Rarely can banks, particularly small community banks, attract the outside capital needed to survive. Private equity groups don’t want to own more than 9.9% of a
BANKING A worker paints the new name, Park Sterling, on the former CapitalBank in Greenville. (Photo/Liz Segrist)
ing, he said, and certain customers will come looking for it. “Customers can sit down at my desk and look me in the eye,” Barnett said. Larger, acquisitive banks want to maintain that intimacy as well. “How do you keep that? Make the top accessible. Our CEO meets with customers,” said Blaise Bettendorf, executive vice president and CFO of First Financials Holdings Inc. of Charleston. The holding company of First Federal Bank just acquired Plantation Federal Bank of Myrtle Beach and First Savers Bank of Greenville through a loss-share agreement with the FDIC. First Federal plans to grow inland beyond its coastal footprint, farther into the Upstate and Midlands and into North Carolina’s major metros – Charlotte, Raleigh and Greensboro. The bank currently has a North Carolina presence in Wilmington. “There is an attitude for banks from
a safety and soundness standpoint and a regulatory standpoint that it makes sense to grow,” Bettendorf said. Bettendorf acknowledged the sensitivity of acquiring a failed bank with bad loans still on the books. Each problem account is evaluated separately, she said. The credit crisis and new regulatory pressures that come with it have changed the bank’s flexibility in modifying loans, she said. But that’s not always a bad thing. “Some of that enabling, or accommodating (of customers behind on payments), could have attributed to some of the problems we’re in right now. To tell a customer, ‘you can’t afford this,’ is really not a bad thing. We’ll have an even stronger relationship. That’s part of the financial advisory services we offer,” Bettendorf said. “But, we do look at business people’s backgrounds; we still do modifications to loans.”
Today, the state’s banks collectively hold $37.5 billion in assets.
bank, but they don’t make small investments either, said Neil Grayson, a banking and M&A lawyer with Nelson Mullins Riley & Scarborough. “You just can’t find investors willing to invest in the smallest banks because it’s not cost effective,” he said. “The general consensus seems to be that your bank has to get bigger to survive,” Grayson said. “The regulatory burden is getting bigger.” Regulatory pressures are forcing banks to preserve more capital, making it harder for banks to lend and make money. “We believe that scale is the heart of a franchise’s viability and success in banking. That can be achieved through M&A or organic growth,” said Nix of First Citizens. “Banks under the $500 million range and even under a $1 billion will struggle with the cost of scale and compliance.” Plath said he believes banks must have $5 billion in assets or more to achieve the economies of scale necessary to survive. “In certain smaller markets, rural markets, you could probably make it with around $5 billion,” said Plath, of Charlotte. Pinnacle Bank President and CEO David Barnett still sees long-term shareholder value in his young bank. The small institution, with branches in Powdersville and Greenville, posted a profit of $513,695 for 2011, a gain of 43% over 2010 earnings. “We’ve seen $5 billion banks fail. We’ve seen $5 billion banks that aren’t making money,” Barnett said. “I think it’s a lot more about how you run your bank, how you deploy your capital … We have to control credit costs and be smart about our growth.” Pinnacle Bank raised $18.5 million from local investors and launched its business in 2006. Scarce capital would make that difficult today, Barnett said, but the bank has not changed its business plan. The bank plans to remain small, independent and closely held. Growth will come organically, and Pinnacle also could acquire branches of a downsizing bank, he said. “Right now, it’s difficult for small banks to access capital, but I think even that may turn around when investors see that small banks can be successful,” Barnett said. Smaller banks have an advantage that larger competitors have a hard time match-
Ports, Logistics & Distribution
Canal chief wonâ€™t pick sides in port fight By Chuck Crumbo, Staff Writer
he ports of Charleston and Savannah should be improved because both will be needed as trade expands with the rest of the world, says the CEO of the Panama
Canal Authority. Political fights that attempt to strengthen
one port over another can hurt both sides, he said. See PANAMA CANAL, Page 40
Alberto Aleman Zubieta CEO of the Panama Canal Authority
South Carolina exports jump 21% in 2011
wo key nuggets of export news have South Carolina political and business leaders doing a little bragging. The first piece of news is the state Department of Commerce’s report that the Palmetto State recorded a 21% increase in 2011 exports. And the second is BMW’s announcement that its plant in Spartanburg County exported $7.4 billion worth of passenger vehicles through the Port of Charleston in 2011, making the South Carolina facility the No. 1 U.S. automotive exporter. “South Carolinians knows how to make things — and we ship them the world over,” Commerce Secretary Bobby Hitt said. According to data from the U.S. Department of Commerce, last year’s numbers marked a 68% increase over BMW’s 2010 value of $4.4 billion. In 2011, more than 192,000 vehicles were exported from its South Carolina plant. Overall, BMW accounted for about onethird of the $24.6 billion in goods e shipped
2011 S.C. export rankings among states • 17th overall in U.S. • 1st in exports of automobiles to the world, surpassing Michigan
• 1st in exports of tires, holding nearly 30% • • • •
of the share of U.S.-made exported tires 2nd in exports to Germany 4th in exports to Saudi Arabia 9th in exports to India 10th in exports to China Source: S.C. Department of Commerce
from South Carolina to 198 countries. South Carolina also zoomed to the top among U.S. states in tire exports, holding nearly 30% of the share of U.S.-made exported tires. “South Carolina is poised to become the No. 1 tire-producing state in the U.S., and the tires that we make here are exported all over the world,” said Pete Selleck, chairman and president, Michelin North America,
which is headquartered in Greenville. The state’s other top export products in 2011 were machinery, electrical machinery, plastics, paper and paperboard, organic chemicals, optics and medical equipment, wood pulp and cotton yarn and fabric. Germany overtook Canada again for the ranking as South Carolina’s No. 1 export market in 2011, purchasing nearly $4 billion in products, a 36% increase from 2010. Canada was second at $3.7 billion worth of products, while China ranked No.3 at $3 billion. The rest of the top 10 export destinations in 2011 were Mexico, the United Kingdom, Australia, India, Brazil, Japan and Saudi Arabia. “Exporters in South Carolina’s manufacturing and agricultural sectors benefit from access to competitive, deepwater port facilities,” said Jim Newsome, president and CEO of the South Carolina Ports Authority. “Growing our export base is essential to generating jobs in the maritime industry and across the state.”
Professor works to link academic expertise to supply chain industry
tate universities and colleges can play a key role in shaping South Carolina’s future transportation plan and supporting the supply chain industry, says a logistics expert at Clemson University. Scott Mason serves as the inaugural Fluor Endowed Chair in Supply Chain and Logistics in Clemson’s industrial engineering department. “There are fantastic opportunities here given all the modes of transportation, the companies and industries that are here,” Mason said. The state Department of Transportation is developing a 25-year statewide multimodal transportation plan. The plan will
prioritize future transportation infrastructure requirements and serve as a tool to spur job creation, business expansion and education. It also will analyze infrastructure requirements, as well as rail, freight and transit components. Academia’s role is built into the transportation plan because it “requires the consultants to coordinate with the universities’ transportation faculty,” Mason said. That, of course, includes him and other supply chain experts at Clemson, the University of South Carolina’s Darla Moore School of Business and other colleges around the state. “We have a toolbox for solving problems that is pretty powerful,” Mason said. “We think we can offer value given different
capabilities, objectives and mathematical, model-based capabilities.” An expert in modeling large-scale systems, Mason joined the Clemson faculty from the industrial engineering department at the University of Arkansas, where he was chairman of graduate studies and associate department head. Before moving into the ranks of academia, Mason began his career in the semiconductor industry. Mason’s position at Clemson is funded through the SmartState program that links the state’s research universities to industry. Fluor Corp. contributed $2 million to match $2 million from the South Carolina Centers of Economic Excellence program, which was rebranded SmartState.
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PANAMA CANAL, from page 36
lberto Aleman Zubieta declined to pick sides in the race between Charleston and Savannah to deepen their harbors for the huge cargo ships that soon will be moving through the Panama Canal. “Charleston’s and Savannah’s ports should be improved,” said Aleman, CEO of the Panama Canal Authority. “Both are going to be needed.” The Panama Canal is undergoing a major expansion that will allow container ships carrying 14,000 TEUs (twenty-foot equivalent units) to pass between the Pacific and Atlantic oceans. These ships will carry nearly three times the capacity of container vessels now using the canal. The project is scheduled to be completed by 2014, in time for the canal’s centennial celebration. When bigger container ships and other cargo vessels reach the ports of the eastern United States, trading patterns are bound to change and cargo facilities expanded. To safely handle the larger ships on a
The MSC Bruxelles is the 2nd largest container ship to ever call on the Port of Charleston. The 9,200TEU Mediterranean Shipping Co. vessel can draft up to 49 feet, which required the ship to enter the Port of Charleston during high tide. (Photo/SCSPA)
24/7 basis, both ports need deeper water. Political firefights that attempt to stymie the efforts of one port over another to deepen their harbors can hurt both sides, Aleman said. “What you have to understand is that you are in a globalized world,” he said. “If you don’t do it, somebody else will do it.” Aleman noted that the Port of Virginia and one terminal at the Port of New York already can handle the bigger ships around the clock. More will be needed if the United States hopes to grow its economy and build trade with other countries in all corners of the globe.
Both the ports of Charleston and Savannah need to have deeper water for the big ships. Charleston, which has the deepest harbor in the Southeast, can handle the big ships safely, but only at high tide. A feasibility study is under way on a proposal to deepen the harbor to 50 feet — the depth needed for the bigger ships. Georgia, which has its port about 40 miles inland on the Savannah River, needs South Carolina’s approval for a permit to dredge the river because it forms the border between the two states. The state Department of Environmental Control gave its
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CANAL facts $5.25 Billion Cost for the Panama Canal expansion.
Sources: Panama Canal Authority, www.buildingthenewpanamacanal.com Infographic: Ryan Wilcox
O.K., much to the chagrin of many S.C. legislators, who passed a bill to suspend the agency’s authority over the permit. The resolution argued that the Savannah River Maritime Commission has the authority over the river’s role as a waterway for container and commerce ships, and DHEC’s permit approval violated that authority. Gov. Nikki Haley vetoed the bill, saying that DHEC is the only agency that can issue the permit. Her argument was rejected by the legislature. Haley’s veto was overridden in a 39-0 vote of the Senate and 111-1 vote of the House. Political fights aside, Aleman said the United States needs to find a way to speed up the process of bolstering its infrastructure, and develop a comprehensive program of what ports need to be deepened. If the United States can’t find a way to accelerate the process, it faces the prospect of falling behind. “You can’t take 10 years for a feasibility study and whatever. The process takes too long,” Aleman said. “And, at the end of the day it’s about jobs,” he said.
1,400 ft. Length of new locks being built
1,250 ft. Height of the Empire State Building
Length of Post-
1,200 ft. Panamax Vessel
8 to 10 hours
The average time it takes a ship to complete the journey.
The length of the Panama Canal.
85 feet The height ships are raised over sea level.
By Chuck Crumbo, Staff Writer
‘Real work begins’ at V.C. Summer Nuclear Station
all it a sign of the times, but Jenkinsville finally has a traffic light. The light, though, isn’t just for the 640 souls who live in the rural Fairfield County community. Installed earlier this spring, the traffic signal is at the contractors’ entrance of V.C. Summer Nuclear Station off S.C. Highway 213 and serves as an example of how construction of two new reactor units at the power plant is ramping up. Investor-owned South Carolina Electric & Gas and its state-operated partner, Santee Cooper, are expanding the nuclear power plant they jointly operate some 26 miles northwest of Columbia. Although workers have spent the past couple of years excavating the 25-acre site, construction directly tied to the two reactor units couldn’t begin until March 30 when the Nuclear Regulatory Commission
issued combined construction and operating licenses to SCE&G and Santee Cooper. “Now, the real work begins,” said Lonnie Carter, president and CEO of Santee Cooper. “We’re poised to have a very large construction project here, probably one of the largest ever in the state, certainly in terms of dollars.” About 1,300 construction workers flow through the gate daily. By the time the project is fully ramped up, around 2015, more than 3,000 people will be working on the site. Another 600 to 800 workers will form the permanent workforce at V.C. Summer to operate and maintain the 1,117-megawatt AP1000 units engineered by Westinghouse. When the project is completed in 2018, both reactors are expected to generate power for more than 1.5 million residential and commercial customers served by SCE&G, Santee Cooper and 20 electric cooperatives.
The nuclear units also will give the power companies an opportunity to retire older, coal-burning units and reduce their carbon footprint. SCE&G estimates that by 2019 when the nuclear project is completed, 61% of power generation mix will not be emitting pollutants into the air. About $2 billion has been spent on the project, said Kevin Marsh, chairman and CEO of SCE&G’s parent company, SCANA. Marsh added that SCE&G’s share of the project — which will be $6.3 billion or 55% — is projected to come in $500 million under budget at $5.8 billion. “We’re certainly optimistic that we can hold that,” Marsh said. The company has managed to keep the price down by getting up to two-thirds of the project’s costs fixed upfront in contracts signed with Shaw Group and Westinghouse. Marsh said costs also are being kept low
because SCE&G is paying less for money borrowed to build the reactors. Through the state’s Base Load Review Act the utility can increase electric rates, with regulators’ approval, to cover interest payments. Marsh estimates the pay-as-you-go approach will save $1 billion in interest costs over the life of the project, which is scheduled to be completed in 2019. The construction site includes two batch concrete plants that can mix 240 cubic yards of concrete per hour, Byrne said. One batch plant will supply enough concrete needed for the project, Byrne said, but a second plant provides insurance against a construction slowdown. “Once you start one of these big, siterelated pours, you don’t want to stop,” he said. The project, which was announced in March 2008, has been a long-time coming, Marsh said. “It’s something that we’ve worked at every day,” Marsh said. “It’s something to think about when you come to work and when you go home at night.” Planning for the new units began around 2000 when SCANA officials began consider-
The lower containment bowl for the Westinghouse AP1000 reactor, which looks like a large cereal bowl, is under construction for Unit 2 at the V.C. Summer Nuclear Station. The bowl is made from 1¾-inch thick steel plates. The containment bowl will be 139 feet in diameter and weigh 3,700 tons. (Photo/provided)
ing what technology to use for next-generation base-load power plants, Marsh said. By 2004-05, following analyses of various technologies from renewable sources like wind to solar to fossil fuels like coal and gas, SCANA opted for nuclear, Marsh said. Nuclear was picked because it’s clean, reliable and the cost of fuel is stable, Marsh said. “We thought it was the right answer
but we had to prove that it was the right answer,” Marsh said. Both Carter and Marsh said the new units are needed to meet future power needs in South Carolina and help spur economic development. “I believe industry will seek out these new nuclear projects as they look for places to locate, particularly where stable energy costs are important,” Carter said.
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By Chuck Crumbo, Staff Writer
25-year transportation blueprint aims to meet needs of portâ€™s expansion
statewide transportation plan aimed at bolstering South Carolinaâ€™s distribution and logistics network should set the table for economic growth through the 21st century, experts and industry officials say. States that focus investment in transportation, distribution and logistics infrastructure seem to do well economically, and South Carolina already has the key ingredients, said Scott Mason, a professor of industrial engineering at Clemson University. â€œThere are fantastic opportunities here given the modes of transportation, the companies that are here and the industry,â€? said Mason, who serves as the Fluor Endowed Chair in Supply Chain Optimization and Logistics at Clemson. The S.C. Department of Transportation will be drawing up a 25-year statewide multimodal plan centered on moving freight
to and from the Port of Charleston. The plan will set priorities for future transportation infrastructure requirements and serve as a tool to spur job creation, business expansion and education, officials said. It also will analyze infrastructure requirements, as well as rail, freight and transit components, according to S.C. Transportation Secretary Robert St. Onge. Advocates cite a $5.3 billion expansion of the Panama Canal to open in 2014. When completed, the largest cargo ships in the world will flow through the canal and call on Charleston and other Eastern seaports. â€œItâ€™s very important that we keep our eye on the ball,â€? said Brian Gwin, South Carolina manager for Norfolk Southern. John Carr, an associate of consulting firm CDM Smith, said a transportation plan will serve as a roadmap for South Carolinaâ€™s economic future.
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â€œIt is a big opportunity for South Carolina,â€? Carr said. South Carolinaâ€™s TDL industry involves some 2,600 firms that employ more than 44,000 workers. Its payroll tops $1.7 billion. In 2011, South Carolinaâ€™s export growth ranked the state 14th in the United States. The state also ranked first in exports of automobiles and tires. The new transportation plan should incorporate a number of the stateâ€™s advantages, Mason said. Those include: Two-thirds of the nationâ€™s population lives within two daysâ€™ drive of South Carolina, which is home to five interstate highways, offering access to the entire country. Two world class railroads, CSX and Norfolk Southern, serve the state via 2,400 miles of track. Nearly any location in the state is within an hourâ€™s drive from primary airports at
Charleston, Columbia, Greenville and Charlotte, which offer “excellent” cargo services. The Port of Charleston has deepwater, high bridges, and is served by 25 shipping lines that reach more than 100 countries. South Carolina is one of the leading areas in the world that offers affordable and reliable energy. How the TDL sector drives growth and creates jobs depends on whether Charleston Harbor is dredged deep enough for the onslaught of post-Panamax ships in 2014, observers said. In anticipating the big ships, the S.C. State Ports Authority is in the midst of $1.3 billion in infrastructure improvements to expand the port’s capacity by 50%. “We have to expand the cargo base,” said State Ports Authority CEO Jim Newsome, adding that the port’s ability to handle the bigger ships is essential to developing it into a regional port. Deepening the harbor, which is expected to cost $300 million, is an essential part of the expansion project, Newsome said. The big ships will be using deepwater ports on the East Coast because 70% of the
A container ship is docked at the Wando Welch Terminal at the Port of Charleston. The S.C. State Ports Authority is working to expand the port’s capacity by 50%. (Photo/Leslie Burden)
U.S. population lives east of the Mississippi River, Newsome said. Charleston and South Carolina want to be ready, he said. The dredging project, presently in the study phase, is expected to take between five and eight years. The state has committed $180 million — its share of the project. Leaders in the private and public sectors have to be willing to spend money on transportation projects, Gwin said. “The winners are those who make the decision to invest,” he said.
Members of the TDL Council need to get behind the state’s efforts, said Deepal Eliatamby, the group’s chairman. “We’ve got to look at this from a holistic standpoint,” said Eliatamby, who is president of Alliance Consulting Engineers in Columbia. “We have to get funding for deepening of the port,” he said. “That’s absolutely critical. BMW wouldn’t be here, Michelin wouldn’t be here, Continental wouldn’t be here, if the Port of Charleston wasn’t here.”
By James T. Hammond, Staff Writer
Continental Tire chiefs see growth ahead in S.C.
ontinental Tire the Americas has officially begun construction of its Sumter County tire manufacturing plant on a 330-acre site on U.S. 521. Initial employment estimates for the $500 million plant are about 1,600 jobs. But Jochen Etzel, CEO of Continental Tire the Americas, said it would be reasonable to expect the plant to employ 2,000 to 3,000 workers when fully mature in perhaps two decades. Etzel said the $500 million investment will include the first two phases of the plant. Further expansion beyond 2021 will depend upon the progress of the initial operations. But other Continental Tire plants in Europe and Mt. Vernon, Ill., typically employ as many as 3,000. Continental Tire expects construction to be completed by the end of 2013, with the start of production in early 2014. Officials predicted annual production capacity of 8 million tires when full production levels are reached. They offered a timeline of milestones as the plant is built and ramps up production: Very soon, the company will recruit about 18 key engineering and management employees, including human resources professionals to manage hiring of employees at the Sumter County plant. The staffing process and manufacturing training for the first 150 employees will begin in the first quarter of 2013. Continental has partnered with Ready SC’s local technical colleges to assist with staffing and training interested candidates. • Production in 2014 is expected to be 800,000 units. • By 2015, production is expected to rise to 2 million tires annually. • In 2016, Continental expects to make 3 million tires in Sumter County. • By 2017, employment should reach 800 people. • By 2021, when phase one and phase
Gov. Nikki Haley joined Continental Tire the Americas CEO Jochen Etzel (left) and Continental board member Nikolai Setzer (right) to kick off construction of the Sumter plant. (Photo/James T. Hammond)
“We are experiencing an increasing demand for Continental and General brand passenger and light truck tires in the U.S. and with the Sumter plant we can meet our customer’s needs and can grow our business.” Nikolai Setzer executive board member and head of global tire business, Continental Tire
two are complete, employment should hit 1,600 and annual output should reach 8 million tires at the 1 million-square-foot production facility. Etzel and others said the new plant is designed for growth. The plant will manufacture passenger
and light truck tires to meet the increasing demand for Continental and General brand tires from both aftermarket business and automotive manufacturers. Approximately 80 more jobs will be added as part of the expansion of CTA’s headquarters, located in Lancaster County. Nikolai Setzer, member of Continental’s executive board and head of Continental’s global tire business, said, “building this new facility in Sumter is an important part of Continental’s growth strategy worldwide and, in this case, in particular for the U.S. market. We are experiencing an increasing demand for Continental and General brand passenger and light truck tires in the U.S. and with the Sumter plant we can meet our customer’s needs and can grow our business. This $500 million investment is our very clear commitment to our customers.” Setzer said the $500 million investment in Sumter County represented more than one-third of the company’s $1.3 billion special growth fund. “We deeply believe in the United States
Continental Tire will build a 1 million square foot building on 330 acres in Sumter County. (Photo provided)
and our long-term opportunities in this market,â€? Setzer said. He said Continental starts new plants on a â€œsister plantâ€? principle, and workers from Continental plants worldwide will be coming to Sumter to ensure that the highest quality tires roll off the assembly line â€œfrom day one.â€? As a gesture to the Sumter community, Continental is making a $25,000 donation to Sumter School District. The donation
will pay for 200-book classroom libraries for English classes in each of the seven middle schools in the district. Continental Tire the Americas has continued to hire employees during the economic downturn. Since January 2008, CTA has created more than 2,500 new jobs in the Americas region. Some 625 of these new positions were created in the U.S., particularly in the Mount Vernon, Ill., plant.
To keep up with business growth, CTA announced the hiring of more than 400 employees at the Mount Vernon plant in May 2011. Continental Corp. hired 30,000 new employees globally in 2010 and 2011, a period when the company saw a 20% increase in demand for its tires. Continental currently has approximately 164,000 employees in 46 countries.
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From the publishers of
April 29, 2012 Cheered on by thousands at Isle of Palms, Eclipse is returned to the ocean by the solicitous hands of Mason Holland. Eclipse, a rare hybrid loggerhead and green sea turtle, was one of seven sea turtles found cold stunned off the coast of Cape Cod, Mass. The New England Aquarium was overwhelmed, so Holland volunteered the services of North American Jets and pilot Andy Smith to fly all seven turtles to the SC Aquarium in Charleston. All seven turtles were treated and released in record time. (Photo/Kim McManus)