During the past several years, international companies have made major investments in Alabama, helping to transform the state’s economic landscape. For instance, last March, the Mobile Press-Register calculated that at least one of every 15 private-sector workers in Mobile County worked for a foreign-owned company. According to the U.S. Department of Commerce, U.S. subsidiaries of foreign firms now employ 78, 400 workers in Alabama, including 45, 200 factory jobs. That’s about 5 percent of the state’s private-sector work force.
Alabama’s success with recruiting foreign companies arguably began with the successful recruitment of Mercedes in 1993, but the state continues to attract international investment from companies in various industries. The past couple of years have brought to Alabama several companies from countries with little prior representation in the state. These new-to-Alabama companies are bringing significant investments in infrastructure and promising thousands of jobs in communities across the state.
Auto supplier rollout continues
Alabama’s success with recruiting automotive plants such as Mercedes, Honda and Toyota continues to draw more automotive suppliers to the state.
Arkal Plastics Products, based in Israel, opened its first U.S. subsidiary in Auburn, to make plastic automobile parts. Arkal Automotive USA Inc. launched operations in January at a new $7 million, 25-employee plant, which already is running three shifts, says Ram Drori, general manager of Arkal Automotive.
Workers at the plant, located in Technology Park West, produce injection-molded structural parts, including door carrier plates, battery trays and seat brackets, Drori says.
Arkal needed a U.S.-based plant to more effectively handle distribution of the company’s large structural products to U.S. customers, Drori says. “We chose Auburn in Alabama as a good fit to support our customers, who are located within a reasonable distance from the manufacturing site, ” he says. Auburn is “very much a supportive environment to conduct our business, as well.”
The first phase of the Arkal plant encompasses 33, 000 square feet, but the company plans to expand up to 110, 000 square feet and eventually employ 70 to 80 workers. Arkal is the second company from Israel to start a manufacturing operation in Auburn.
WKW Erbsloeh, based in Germany, is another foreign automotive supplier investing in Alabama to bring its manufacturing operations closer to its customers. The company, which produces aluminum trim—including roof moldings, covers and roof rack systems—began looking for an American location in 2005 and 2006, says Monika Kocks, head of corporate communications for WKW Automotive. The company’s Pell City location makes it close to “our main customers, Mercedes, BMW and VW, ” says Kocks, and “confirmed our resolution in building up our North American operation in Alabama.”
The company launched its Pell City operations in 2008 and currently operates in a 12, 000-square-meter facility with 450 employees, including temporary workers. The company’s core competence is “the combination of functionality of the profiles and a brilliant surface finishing, ” Kocks says. WKW Automotive helped pioneer the industrial use of aluminum, working with the metal and its alloys since 1898, so “we know exactly how to manufacture premium products for our demanding customers.”
Beyond automotive: missiles, steel, sweetener
Automotive suppliers aren’t the only international companies choosing to locate in Alabama. Rather than putting new cars and trucks on the road, Terma North America, a wholly owned subsidiary of Danish company Terma, is helping to launch new air and missile defense programs in Huntsville. The company, which has been operating in Arlington, Va. since 2003, opened its Huntsville office last August.
“It made sense for us to come to Huntsville because of the proximity of Redstone Arsenal, ” says Bobby Dodd, business unit director for Terma’s Huntsville office. “Army Material Command, Army Contracting Command, and the Missile Defense Agency are all now located here. We work in ballistic missile defense, command and control systems and the integration of air and missile defense, and we will eventually expand into doing homeland security, naval operations and critical infrastructure protection.”
Terma North America currently is making software products in its Huntsville office and has plans to move into systems engineering and product licensing. The company has a partnership with Lockheed Martin Space Operations and shares space with it in Cummings Research Park. However, Dodd says Terma will have its own Huntsville office building by May and will employ up to 40 people, working on some $15 million to $20 million in projects each year.
International companies continue to make a mark in the traditional Alabama business of steel-making. Finnish steel company Outokumpu Oyj has just purchased the stainless steel division of ThyssenKrupp in Calvert. “The transaction aims to create a new leader in stainless steel with broad geographical reach and product offerings, ” says Nora Berg, communications officer for Outokumpu Oyj. “The nearly completed €1.2 billion investment in the highly integrated and cost competitive Calvert facility is expected to enable us to increase our market share in the attractive United States and in South America.”
Currently, the TK stainless steel unit, managed by Inoxum, employs more than 300 people in Alabama. Berg says that headcount is rising rapidly as the plant ramps up production of products like hot and cold rolled strip steel. By the end of this year, the Calvert plant will finalize the build-up of its 900-kt meltshop.
Tate & Lyle, a UK-based food and beverage company, will reopen its plant in McIntosh early this year, says Chris Olsen, vice president of community and government affairs for the company. The McIntosh plant produced Splenda® brand sucralose before it was shuttered in May 2009.
“Restarting the McIntosh plant was part of our thought process from the time we announced the mothballing in 2009, ” Olsen says. “It was a matter of market conditions being right and the time for restart is now. We also considered further expansion at our Singapore plant, but after weighing the two options, we decided restarting McIntosh made the most economic sense.” The company anticipates that the McIntosh plant will have finished product sometime in the first half of its fiscal year, which begins April 1.
Tate & Lyle already has begun staffing the reopening plant, which will employ about 100 workers. “We were very pleased that a large number of former employees chose to return to Tate & Lyle, and the new employees that we have brought on have been great additions, ” Olsen says.
“There are lots of reasons Alabama is a good location for our business, but two stand out, ” Olsen says. “It starts with the high quality workforce that not only works efficiently but safely. Safety is a high priority at Tate & Lyle. And also the state of Alabama, as well as Washington County, have established an excellent overall business climate that seeks to reduce obstacles that prevent businesses from growing.”
Nancy Mann Jackson is a freelance writer for Business Alabama. She lives in Huntsville.
By Nancy Mann Jackson