South Carolina seeks $40.5M in state funds to reel in Chinese tire maker
David Wren — The Post and Courier
South Carolina is seeking public financial assistance to land a Chinese manufacturer of car and truck tires that wants to build a $1 billion manufacturing plant in Orangeburg County.
Wanli Tire Corp. says it will employ up to 1,200 workers at the factory, which would be built in two phases over an eight-year period. The initial phase would produce 6 million radial tires per year, according to a news report of the initial announcement of the project earlier this year in China.
Wanli would be the sixth international tire manufacturer to locate in South Carolina. The Palmetto State leads the nation in tire exports, with more than $1.3 billion worth of tires shipped in 2016 to foreign markets through the Port of Charleston. With Wanli's projected production, South Carolina's tire manufacturers would have the capacity to make more than 120,000 tires per day.
The state Commerce Department is asking the Legislature's Joint Bond Review Committee to approve issuing up to $40.5 million in bonds to pay for site preparation, construction of a rail spur and roads at the site.
The committee is expected to vote on the proposal Tuesday in Columbia.
Tuesday's meeting "is another step in the process to potentially secure a company," said Commerce Department spokeswoman Adrienne Fairwell, who added the deal is far from done.
"Because there are still a number of details that need to be worked out and both parties must still go through corresponding approval processes, it is too early to confirm anything further," Fairwell said.
Jeff McWhorter, president and CEO of Palmetto Railways, declined to comment Monday on whether the state-owned short-line railroad would be in charge of building and operating the rail spur. Palmetto Railways is a division of the Commerce Department.
If approved, the bond revenue would be spent beginning next month through 2018 as Wanli proceeds with construction of its campus. The bonds would be repaid over a 15-year period.
Daniel Young, director of grants and incentives for the Commerce Department, met with Wanli officials in April, according to Chinese news reports. The tire company signed a letter of intent to locate in South Carolina during a conference in China.
"We are very pleased to work with Wanli Tire ... to locate in South Carolina and feel confident that Wanli tire would contribute to smart manufacturing development in South Carolina, in addition to increasing employment and creating more jobs for the state," Young told Chinese business leaders, according to news reports.
Wanli, based in Chonghua, is a joint venture of Guangzhou Wanli Group and South China Tire and Rubber. The company has an annual production capacity of 16 million tires and employs 2,100 people, making it South China's largest radial tire manufacturer.
Wanli would join South Carolina tire manufacturers Michelin, Bridgestone and Continental, which employ nearly 12,000 people. In addition, Singapore-based Giti Tire Group is building a manufacturing plant in Chester County that will employ 1,700 people over the next decade. Trelleborg, a Swedish company, makes tires for agricultural equipment at its Spartanburg plant.
In addition to domestic sales, those companies account for roughly 28 percent of all tires exported from the U.S. to foreign markets each year, according to the U.S. Department of Commerce.
The Port of Charleston last year exported 20,766 cargo containers of tires — more than double the number from five years earlier.
"South Carolina's automotive cluster, and tire companies in particular, provide both importing and exporting cargo volumes for the port," said Jim Newsome, president and CEO of the State Ports Authority. "They generate positive economic impacts on maritime commerce and spur job creation through the region. The addition of a tire manufacturing facility like Wanli would bring significant benefits to our port and state."
The demand for tires in the U.S. is expected to show slight growth of 0.4 percent this year compared to 2016, according to the Rubber Manufacturers Association. The association forecasts U.S. sales of nearly 260 million passenger vehicle tires and 37 million light truck tires.
