How Japan business ties add horsepower to Southeast growth
Date: Nov 13, 2015
Source: Alabama Department of Commerce
BIRMINGHAM, Alabama – As leaders from seven Southeastern states gather with their Japanese counterparts for a high-level forum in Birmingham, this longstanding Trans-Pacific relationship is positioned to strengthen as trade and investment ties expand.
Those strong economic bonds provide the foundation for the SEUS Japan 38 joint forum beginning this weekend in Alabama’s largest city, an event that’s expected to draw scores of corporate leaders, political officials and economic development specialists from Japan and across the region.
Two-way trade between Japan and the Southeastern states exceeded $30 billion in 2014, a figure that includes nearly $8 billion in SEUS-region exports to Japan, led by chemicals and transportation equipment.
“The partnership between Southeastern states and Japan continues to flourish, driving economic growth, creating opportunity and fostering friendship,” said Greg Canfield, secretary of the Alabama Department of Commerce. “Across the Southeast, it’s easy to identify examples of how this Japanese business connection has boosted prosperity in many cities and towns.”
Here’s a look at four ways the close relationship with Japan has benefited the SEUS states and how the partnership will continue to pay dividends through expanding trade, investment and job-creation.
No. 1: INVESTMENT IMPACT
Japanese corporations continue to build on a long tradition of investing in the SEUS region. Hundreds of Japanese companies now have a presence across the seven states, including steel makers, chemical producers, pharmaceutical firms, logistics organizations, auto manufacturers and many others.
Since 1999, when Honda announced plans for an assembly plant in Talladega County, Japanese companies have invested more than $4.8 billion in Alabama alone. Last year, Japanese companies announced projects valued at $345 million in the state, creating 1,120 new jobs, according to the Alabama Department of Commerce.
The momentum hasn’t slowed in 2015. In October, Yorozu, a global Tier 1 auto supplier, announced plans to build a $100 million factory in Jasper, creating 300 jobs. Yokohama-based Yorozu will be the third Japanese auto supplier to operate in the Walker County city, located 40 miles from Birmingham.
Tennessee has been a major beneficiary of Japanese foreign direct investment, which has reached a cumulative total of $15 billion. That accounts for 60 percent of the state’s FDI, making Japan its No.1 foreign investor. Nearly 40,000 jobs have been created by Japanese-owned companies in Tennessee, according to a report from the state’s office in Yokohama.
Around 180 Japanese companies have operations in Tennessee, and Nissan moved its North American headquarters to Nashville a decade ago.
No. 2: INDUSTRY MIX
With foreign direct investment totaling $42 billion in 2014, Japan is a top source of FDI in the U.S. A considerable share of that investment ends up in the seven SEUS states. Throughout the region, Japanese companies in many different industries continue to build new facilities or expand existing operations.
- In September, Mitsubishi Polyester Film Inc. announced plans to invest $100 million to expand its facility in Greer, South Carolina, which at 1 million square feet is already the largest polyester film plant in the US.
- Tokyo-based Toray, the world’s largest producer of lightweight carbon fiber, is investing $1 billion-plus in a facility in Moore, South Carolina, to supply advanced materials for Boeing’s 787 and 777X aircraft, as well as the automotive industry. Toray also has two facilities in Decatur, Alabama, where it has invested $511 million.
- Kubota Manufacturing of America last year announced plans to invest $100 million to expand its Gainesville, Georgia, headquarters, creating an additional 650 jobs. Kubota, which makes tractors and lawnmowers, has nearly 2,200 employees in the state.