Project Montenegro was the name given a prospective industry considering locating in Union County. For more than a month, local officials declined to reveal anything about Project Montenegro beyond the investment it could make in the county and the number of jobs it could generate. Project Montenegro’s true identity remained a mystery until Wednesday morning when the company’s name was finally revealed.
Gov. Nikki Haley, the South Carolina Department of Commerce and the Union County Development Board announced Wednesday that ESAB Welding & Cutting Products will open a new state-of-the-art manufacturing facility in Union County. The more than $19 million investment is expected to generate at least 100 jobs, with the potential for more in the future.
Andrew Masterman, president and CEO of ESAB North America, said the Union County facility will enable the company to better serve its customers and expand on its commitment to best practices in manufacturing. It is another step ESAB is taking to achieve its goal to be recognized as the world’s welding and cutting authority.
“We are encouraged by the forecast improvements in the economic outlook and excited about the investments being made in this new facility to support our North American initiatives,” Masterman said. “The goal is to optimize our manufacturing operations to enable us to better support our customers. ESAB is financially strong, and we believe this investment demonstrates our commitment to the business to make sure we can take competitive advantage of opportunities as the economy recovers.
“We are fully committed to support the North American market, which represents about a quarter of ESAB’s global revenue,” he said. “We will, in fact, be better equipped to support our current customer base and better serve their future needs with this new facility.”
ESAB is currently conducting a due diligence on the new location in Union County. The company plans to manufacture its line of MIG and Sub Arc welding wire at a new 250,000-square-foot facility. Initial lines are planned to be in production by the end of 2011. The company expects the new location will provide world-class improvements to the manufacturing process that will increase ESAB’s ability to deliver high performance welding wire to its growing customer base.
The company plans to begin filling positions at the facility in the coming months. Available positions as well as additional employment details will be provided to the public once recruitment efforts begin.
“We’re very excited that ESAB made the decision to locate its welding wire operation in Union County,” Union County Development Board Executive Director Andrena Powell-Baker said. “We are very excited about what this project of 100 jobs and $19 million in capital investment will do to stimulate our local economy. This is a great opportunity for our citizens.
“We are trying to attract companies that pay high wages and benefits and ESAB is one of those companies,” she said. “They are a very stable company and highly recognized as a world leader in their industry. The stability of ESAB is very encouraging; and, we expect that they will be around for a very long time providing job opportunities for our citizens. We look forward to helping them reach their goal of being recognized as the world’s welding and cutting authority.”
ESAB also has a facility located in Florence, which has been in operation since 1966 and employs 550 people, and business offices in Columbia.
Haley welcomed ESAB’s decision as benefitting both Union County and South Carolina.
“We are excited to see another world-class company choose to make a major investment in one of our state’s rural areas,” Haley said. “ESAB Welding’s decision to invest more than $19 million and create more than 100 jobs is great news for Union County and our entire state. This is more proof that we are doing the right things to make South Carolina competitive for business development.”
Secretary of Commerce Bobby Hitt said the Union County facility is part of ESAB’s long-term commitment to South Carolina.
“ESAB Welding has been an important part of our state’s business community for a number of years and this announcement confirms its commitment to our state,” Hitt said. “South Carolina’s business-friendly climate and talented workforce continue to attract investments that create jobs. We appreciate ESAB’s decision to continue doing business in the Palmetto State.”
Recruitment
The process of bringing ESAB to Union County began in the summer of 2010 with the formation of a recruitment team composed of Powell-Baker, Union County Supervisor Tommy Sinclair, City of Union Mayor Harold Thompson; Union County Development Board Chairman Carlisle Oxner; Lockhart Power Chief Operating Officer Bryan Stone; and City of Union Utility Director Joe Nichols. Powell-Baker said the team worked closely with Union County Council, Union City Council and the SC Department of Commerce throughout the process which, at the end, became an almost constant effort.
“This is how you recruit industry, by pulling together all of the stakeholders,” Powell-Baker said. “Our team worked on this for months and at the end it was a nearly 24/7 effort.”
That effort included assembling a package of incentives provided by both the city and the county. Approved by Union County Council, the county’s portion of the incentive package includes:
* A 24-acre site the county will purchase for $800,000 and lease to ESAB. The site will be included in a multi-county industrial park the county will establish in cooperation with Spartanburg County.
* A 30-year fee-in-lieu of taxes agreement which will allow ESAB to pay a reduced property tax rate of 6 percent rather and 10.5 percent. As part of the multi-county industrial park agreement, the revenue generated will be divided between Union and Spartanburg counties with the former receiving 99 percent and the latter 1 percent.
* An annual Special Revenue Credit ESAB would receive for the first five years of the fee-in-lieu of taxes equal to 15 percent of fee the county will receive.
* A $100,000 infrastructure grant ESAB will receive from the County Development Fund.
Sinclair welcomed ESAB but pointed out that its recruitment is just the beginning of economic development efforts.
“We’re certainly happy about the announcement and look foward to this diversified industry being part of our industrial family,” Sinclair said. “Bringing ESAB here was a collaborative effort of the county and the city in conjunction with the development board. We appreciate the assistance of the Department of Commerce and from the governor.
“While we’re thankful for this new industry and we celebrate it, it really is just the beginning,” he said. “Our focus is on the future and more development.”
For its part, Union City Council approved an intergovernmental agreement with the county under which the city would reimburse the county $400,000 or 50 percent of the cost of the property it purchases for the ESAB facility as well as 50 percent of all other costs incurred in the purchase. The agreement also authorizes the city to reimburse the county $50,000 or 50 percent of the $100,000 infrastructure grant.
Thompson praised the collaborative, sustained effort to bring ESAB to Union County.
“This is a great announcement and we’re grateful to ESAB for deciding to locate in our great county,” Thompson said. “A special thanks goes to all the stakeholders who worked so diligently to make this project happen. It goes to show what working together can do. The investment, the jobs, the partnerships, all equate to one thing, a win-win situation for everyone who strived to stimulate our local economy.”
City council also approved a memorandum of understanding between the city and ESAB regarding the provision of water, sewer and natural gas to the company. Under the terms of the memorandum, the ESAB facility — which will be located outside the city — will pay the lower rates the city charges water, sewer and natural gas customers within its municipal limits during the first three years in operation. The facility will begin paying the higher rates charged customers outside the city in its fourth year of operation.
Nichols pointed out that ESAB will be a major industrial customer of the city even at the lower rate.
“This has been a long-term endeavor, we started working on this prospect in June of 2010,” Nichols said. “Once ESAB is in full production the estimated quantity of water consumption is estimated at 50 million gallons of water per year. The capacity of natural gas per year is estimated to be 20,000 MCF. This will be a major industrial consumer which justifies the water, wastewater and natural gas incentives.”
While the recruitment of ESAB was a team effort, one member of the team singled out Powell-Baker for praise.
“I would like to praise Andrena for staying on her game and staying on this,” Oxner said. “She worked very hard to make this a reality for Union County.”
Unemployment
Powell-Baker also pointed out that the jobs ESAB will create will have a positive impact on the county’s unemployment rate which fell nearly a full percentage point in February.
Earlier this month, the SC Department of Employment and Workforce announced that unemployment in Union County fell from 17.6 percent in January to 16.7 percent. The drop was attributed to a gradually improving economy that employers in the county and in surrounding counties starting to hire workers.
“Our unemployment rate is gradually dropping and has been doing so for the past few months,” Powell-Baker said. “ESAB will help keep this momentum going.”
ESAB’s impact, both near- and long-term, on job creation in the county was also welcomed by Stone.
“We’re very pleased this company is coming here with high-quality manufacturing jobs,” Stone said. “We certainly welcome the immediate 100-plus jobs they plan to create and we look forward to helping support their expansion plans in the near future.”
ESAB Welding & Cutting Products is one of the world’s largest and most skilled manufacturers of welding and cutting equipment and welding filler metals. Ensuring customer satisfaction, a wide range of ESAB products carry the 100 percent Satisfaction Guarantee. ESAB is an international company valuing integrity, experience, innovation and partnership. Every aspect of ESAB product development and day-to-day interaction with customers is consistently informed by a belief in strength through cooperation. For more information on the company, please visit www.esabna.com
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