State, Fayette, PTC ante up $1.2 million plus tax breaks for Sany assembly plant

Wed, 09/12/2007 - 3:03pm
By: John Munford

UPDATE (PHOTO BELOW): Sany welcomed by Gov. Perdue, officials in Capitol ceremony Wednesday morning ... plans to build $30 million campus at first ... headquarters coming in future to PTC ... Sany officials excited about locating initial 200 jobs in PTC, later expanding to force of 600 ... Logsdon: Chinese firm will add to city's international culture

Sany announcement

[Editor’s note: Below is a press release from the office of Gov. Sonny Perdue.]

Georgia recruits another major Chinese manufacturer as state, region increase ties to world’s fastest-growing economy

Sany America Inc. expected to bring 200 jobs, $30 million in investment over five years

ATLANTA – Governor Sonny Perdue announced today that Georgia has recruited another major Chinese manufacturer. Sany Heavy Industry Co. Ltd., a major heavy construction equipment manufacturer, is expected to bring 200 jobs and $30 million in investment over five years to its first North American assembly plant, which will be located in Peachtree City.

Click here to watch a video of Gov. Perdue and Sany officials

“We’ve had great success building a relationship between China and Georgia, which has led to this announcement of our third significant Chinese manufacturer choosing a Georgia location,” said Governor Sonny Perdue. “With the announcement of Sany’s selection of Peachtree City, we look forward to forging even stronger ties between the business communities of China and Georgia.”

Sany Heavy Industry Co., Ltd., based in Changsha, is the largest concrete-pumping equipment company in China, with 8,000 employees and 2006 sales of about $594 million. As sales grow in the U.S. market, the company has the potential to create up to 600 jobs at the new campus in Fayette County. Sales, service, assembly, testing and distribution, as well as research and development, will all take place at the new facilities, which will serve as corporate headquarters for Sany America Inc.

“We chose metro Atlanta and Georgia to build our U.S. headquarters and assembly center for several reasons,” said Sany America president Lincoln Liang. “North America has a large market for our products, and Georgia occupies an important geographical location with convenient transportation. Most importantly, support for foreign investment from the state and the local governments in metro Atlanta is systematic and well-structured. They understand Chinese businesses.”

In June 2006, Chinese food processing machinery manufacturer Ningbo Lehui Food Machinery Co., Ltd. announced that it had formed a joint venture with New Jersey-based W.Y. Industries, Inc. That joint venture, Kingwasong LLC, is now building a plant in Newnan, creating 200 jobs and attracting $12 million to $15 million in new investment to the area.

In May 2007, China-based General Protecht Group purchased 211 acres of land in Barnesville, Lamar County, to build an assembly and distribution facility for electrical products, wired devices, and other related products.

“We are able to attract Chinese manufacturers half a world away because we’ve got everything they need: a home base located in the heart of the nation’s fastest-growing region, a low cost of doing business and access to the world through our international airport,” said Sam A. Williams, president of the Metro Atlanta Chamber of Commerce, which took an active role in encouraging the project. “Now we’re working on attracting a Chinese consulate to Atlanta and a direct air route to China.”

“We are honored and pleased that Sany America has chosen Peachtree City as the location for the company’s U.S. operations and headquarters,” said Harold Logsdon, mayor of Peachtree City. “This decision substantiates our efforts to create a world class business environment in Peachtree City. With over 30 industries from 10 foreign countries currently residing in Peachtree City, we are proud to have Sany America become the first Chinese company to join our large and diverse international business community. We will continue to promote our community to the world in order to stay competitive in today’s global economy.”

Fayette County and Peachtree City are home to the U.S. headquarters of international companies such as Cooper Lighting, Cooper Wiring Devices, Hoshizaki America, Rinnai America, Shinsei, Sigvaris, Wilden Plastics and World Air Holdings.

Sany Heavy Industry products include trailer-mounted and truck-mounted concrete pumps, high-grade road construction machinery such as full hydraulic vibratory rollers and asphalt pavers, and shoveling conveyance and grabbing machinery like full hydraulic bulldozers and crawler hydraulic excavators. In all, the company covers eight categories and 50 specifications of construction machinery products.

China is Georgia’s third-largest export destination at $1.1 billion last year, moving up from sixth in 2005. Trade to and from China (including Hong Kong) flowing through Atlanta, Savannah and Brunswick totaled $16.7 billion in 2006 moving via air and ocean transport.

The Georgia U.S. Customs District ranks seventh among all U.S. districts for exports and imports with China (including Hong Kong), as well as the second on the U.S. East Coast. According to the Georgia Ports Authority, China and Hong Kong accounted for more than 43 percent of the Port of Savannah’s total container volume in 2006.

Numerous Georgia companies have operations in China, including UPS, GE Energy and Delta Air Lines, which has announced its intention to seek direct service from Atlanta to Shanghai.

Over half a dozen Georgia universities have connections with China, including Georgia Tech’s partnership with Shanghai Jiao Tong University. Georgia’s Chinese community of approximately 24,000 people is served by the Chinese consulate in Houston. Georgia officials are actively pursuing the establishment of a new consulate in Atlanta.

The Georgia economic development office in Beijing, set to open this year, will be Georgia’s 11th international office.

[Editor’s note: The above is a press release from the office of Gov. Sonny Perdue.]


[Editor’s note: The following is the news release announcing Peachtree City’s newest industrial citizen.]

Chinese manufacturer breaks new ground in U.S.

PEACHTREE CITY, Ga.— One of China’s largest industrial corporations makes an announcement with potential far-reaching effect on U.S.-Chinese business relations. The Sany Group announces plans to build a manufacturing plant in this Fayette County community just southwest of Atlanta. In addition, the new facility will serve as corporate headquarters for the American division of Sany.

With this announcement, Sany becomes the first Chinese heavy manufacturing company to build an industrial facility in the United States.

“We are excited about establishing our U.S. presence here and building our brand awareness and sales. The Atlanta region is known as ‘The New Symbol of the South’ and we believe our facility here will serve as the new symbol of business relations between the United States and China,” said Liang Wengen, Chairman of Sany Group.

Sany is building its facility on 268 acres of land in Peachtree City. The company plans to invest $100 million into the site and will initially employ 200 American workers. Ultimately, up to 500 jobs may be provided by the facility.

The plant will be only Sany’s second manufacturing plant outside of China. The other one is in India. Sany will also become one of the few Chinese companies to operate a facility in the United States without benefit of a joint operating agreement with an American firm.

The announcement is a result of intense discussion and negotiation by Sany in cooperation with state and local government and business leaders.

Sany’s products include truck-mounted concrete pumps and trailer pumps as well as high-grade road construction machinery, such as full hydraulic vibratory rollers and asphalt pavers, shoveling conveyance, crawler cranes, soil drilling rigs and crawler excavators.

The Georgia plant will initially assemble one of the largest truck-mounted concrete pumps built anywhere in the world as well as house a research and development unit. Key components of the concrete pump will be manufactured in the United States. Mack of Pennsylvania will make the chassis, Cummins of Columbus, Indiana will provide diesel engines and Sauer-Danfoss of Ames, Iowa will make the hydraulics.

During phase two of the Peachtree City development, Sany will begin making some components for the products assembled there.

“North America has a large market for our products and Georgia occupies an important geographical location with convenient transportation,” said Sany America president Lincoln Liang. “But most importantly, support for foreign investment from state and local governments in metro Atlanta is coordinated and well-structured. They understand Chinese businesses.”

Sany operates on three key principles: “Quality Changes the World,” “Everything is for the Customer” and “Helping Employees to be Successful.” In addition to bringing hundreds of jobs to the area, Sany plans to be an active member of the local community.

On the issue of quality, Sany’s management hopes its facility here will help change the image of Chinese products around the world. “We want to redefine the term ‘Made by China’ to reflect the highest standards. Those are the standards Sany represents,” Sany Chairman Liang Wengen said.

Sany is a privately-owned Chinese company traded on the Shanghai Stock Exchange. It is valued at $1.7 billion (US) with sales for 2007 estimated at $1.85 billion (US). It employs 18,000 people worldwide.

Construction will begin in the first quarter of 2008 and is scheduled to be completed by the first quarter of 2009.

In addition to the Peachtree City factory, Sany also plans to open sales offices in New York, Chicago, Seattle and Arkansas next year.

[Editor’s note: The above is the company-approved news release about Sany locating in Peachtree City.]


What does it cost to land a major employer in Peachtree City?

In the case of Sany Heavy Industry, it will cost over $1.2 million in state and local funds right off the bat, with three-quarters of that coming from the state.

Of that figure, Georgia will contribute $900,000 while the Fayette County Board of Commissioners will contribute $150,000, as will the county’s development authority.

Peachtree City is expected to meet Friday to approve adding another $50,000 to the pot.

The state’s funds are coming from the settlement with tobacco growers, according to an official familiar with the situation.

Those funds will be given to Sany to help purchase the property it needs, including a 180-acre site behind Cooper Lighting and a separate 40-acre tract on Ga. Highway 74 between Panasonic and Wilden Plastics where it will later locate its headquarters.

Sany will produce concrete pumper trucks at first, later expanding its product line and going from an initial employee roster of 200 after the first five years to a total of 600 after 10 years. The initial jobs will offer an average salary of $50,000.

But that largesse comes with another price beyond the governments’ initial assistance.

Sany is also getting a tax break since the county’s development authority will sell it land in a lease-purchase arrangement that will decrease the company’s property tax outlay over a 10-year period.

In year 1, the company will only pay 10 percent of the local property taxes it owes, and the percentage increases by 10 percent each year.

By the end of the 10 years, the company will be paying its full property tax rate, estimated to provide about $500,000 a year in state and local taxes just for the first phase of the development, which does not include the corporate headquarters nor the potential plant expansion.


[Posted earlier this week]

The Citizen has learned through an official source that a mainland Chinese company coming to Peachtree City will initially employ about 200 people at an average salary of $50,000 a year after its first five years in business.

Sany Heavy Industry will be located on a 180-acre tract off Ga. Highway 74 behind Cooper Lighting. The parcel goes all the way back to the CSX railroad but the company doesn’t initially plan to use the rail to ship or receive goods. It is the last relatively large undeveloped tract in the city’s industrial park.

The company will not be manufacturing components at the plant but will assemble them from overseas shipments and U.S. suppliers. The finished products at first will be long-boom concrete pumper trucks and specialized concrete pumps, but the company plans to expand its operations to other heavy equipment, the source said.

The Peachtree City Council is expected to vote Friday morning in a called meeting to commit $50,000 in economic incentives to the company in exchange for the jobs and property taxes that will be created by Sany.

Sany already has several employees who have moved to Peachtree City to jump-start its U.S. sales division at a temporary office in the Atlanta area. It will take between 18-24 months to build the 400,000-square-foot facility, which will include assembly and office space.

Sany is projecting that within 10 years it will add a U.S. corporate headquarters building along with a research and development unit while also expanding its production line to include excavators, heavy graders and other equipment within a projected 10 years.

At the end of that time period the company’s employment in Peachtree City is expected to reach about 600 people, but it is unclear what wages the future employees will earn because that potential expansion is further away, the official said. By comparison, that would put Sany at the level of Cooper Lighting, which is the county’s second-largest corporate employer currently next to Panasonic Automotive. Panasonic has about 1,200 employees.

Sany also is buying an additional 40-acre tract directly on Hwy. 74 between Wilden Plastics and Panasonic where the headquarters will eventually be located.

The company tests every component of its product and the trucks will be built on a special order basis only, with a one-week turnaround time, the source said.

This will be Sany’s first U.S. operation. Having a presence in the United States will help Sany because it allows the company to offer a force of technicians for support.

Many of Sany’s employees will be skilled labor such as electricians, welders, plumbers and the like, according to the official source. There will also be sales and executive staff in addition to other positions, but it is expected there will be few Sany employees migrating here for the operation.

Although for now the company plans to receive its parts shipments via motor carrier and not rail, the 30-plus-foot-long pumper trucks will be driven off the site once completed.

The company is getting a property tax break spread out over 10 years, paying just 10 percent of the estimated property taxes its first year, with that figure increasing by 10 percent each year until the ninth year when the company will pay its full property tax bill. The bill is estimated to be in the neighborhood of $500,000, including all local and state property taxes, and that’s only the initial phase of the development, the official said.

The Fayette County Development Authority will purchase the property and lease it back to Sany over 10 years in order to facilitate the property tax break, and Sany will own it outright once the 10 years is up.

The company’s investment in the project is an estimated $30 million.

The official anticipated that Sany will also take advantage of the freeport trade designation of the city’s industrial park. That allows the company to exempt its warehouse inventory from property taxes if it is destined to be shipped out of state to another entity that will actually sell the goods.

According to the official, Sany is entirely privately owned, unlike many Chinese companies where the government has at least a partial ownership.

Worldwide Sany employs about 8,000 people and last year reported revenues of $611 million.

The company is publicly traded on the Shanghai Stock Exchange and was founded in 1989. Sany is based in Changsha, Hunan Province, China.

Sany’s concrete pumps have broken the world record for pumping height several times and were used to build the Dubai Tower, the world’s tallest skyscraper in the United Arab Emirates.

This is the third Chinese company to come to Georgia in the past 18 months, and Peachtree City won out over Houston, Texas, in the bid for Sany.

login to post comments