Georgia Lands $500 Million Chinese Tire Plant

A Chinese tire manufacturer has chosen Georgia over Tennessee for its firstU.S. plant, a $500 million investment that validates the state’s strategy oftargeting investors in the northeastern city of Qingdao.

It also comes a year since the Georgia Department of Economic Development hired away a top Chinese investment recruiter from South Carolina to help overcome a near-decade-long lull in major Chinese manufacturing investment.

Sentury Tire Americas, which sells tires products here through a Miami office, selected LaGrange, Ga., after an extensive site selection process that ended up pitting Georgia against Tennessee’s 4,100-acre site in Memphis, where the company already had a distribution center.

Sentury Tire Americas is a subsidiary of Qingdao Sentury Tire Co. Ltd., which is part of a major rubber trading, tire wholesaling and manufacturing conglomerate in eastern China.

The deal has yet to be officially announced, but reports indicate that the company plans to produce 10 million tires per year in Georgia and could hire 600 people in its first phase, which could kick off in 2017.

Global Atlanta had previously learned that a major Chinese deal was in the works but only today verified the location, company and size of the deal through a patchwork of sources that declined to be named due to the sensitive nature of the negotiations.

Hundreds of millions of dollars of investment is not uncommon for tire factories, which require hefty equipment purchases. In fact, Georgia last year lost an $800 million plant from Korean tire maker Hankook, which went toClarksville, Tenn., after reviewing sites in the state. Another Korean giant,Kumho, committed to spend more than $450 million on its Macon plant.

Qingdao Sentury CEO Lanny Lin has said the company’s U.S. plant would be heavy on automation, much like its “smart factory” in Thailand, which can make up to 12 million Landsail tires per year. That’s in addition to the 15 million the company produces at a Qingdao, China, factory that has entirely automated production lines.

A delegation including Georgia Department of Economic DevelopmentCommissioner Chris Carr and Chris Riley, Gov. Nathan Deal’s chief of staff, visited the company last August and toured its factory. John Ling, head of investment for Georgia in China, gave a presentation about the state’s business environment at that meeting, according to Sentury’s website.

West Georgia has become a magnet for foreign automotive investment, particularly from Korea, which has mainly come to supply the Kia Motorsplant.

And while some reports have indicated that Sentury sought out a location close to Kia, a source close to the deal said the company’s decision was more about the fundamentals of the Georgia recruitment package than LaGrange’s proximity to the state’s only auto plant or its sister Hyundai plant next door inAlabama.  

One reason: Sentury, which sells in the U.S. under the Landsail, Sentury and Delinte brands, will make aftermarket tires here — at least initially.

The company, which started production in 2009, has become one of the top 75 tire makers in the world with $314 million in sales in 2014, according toRubber and Plastics News.

It’s this type of investor — fast-growing, relatively unknown and ready to embark on a U.S. manufacturing venture — that has proven elusive since Georgia opened its Qingdao office in 2013. Despite years of delegations and recruitment efforts,a report in April noted that Georgia lagged its Southern counterparts in attracting Chinese investment.

The state’s China office has had a rocky history. Opened in Beijing to handle trade and investment inquiries in 2008 after two major factory announcements, it sputtered for years before being packed up and moved to Qingdao, a city that represented virgin territory for state offices in China. (Export promotion was delegated to a second Georgia office in Shanghai.)

Establishing the Georgia investment hub inside the headquarters of Hisense, an electronics and appliances giant with U.S. headquarters in the state, leaders said that China’s Shandong province, home to more than 90 million people, was fertile ground to attract large private companies looking to go global. Being the first and only state there would give Georgia a leg up on recruitment, they reasoned.

Meanwhile, the state has cultivated political ties with Shandong through the Regional Leaders initiative, a club of state and provincial leaders from around the globe who come together every two years to share best practices. Georgia hosted the forum in 2014 and welcomed Shandong Gov. Guo Shuqing.

But it wasn’t until hiring Mr. Ling — previously a thorn in the state’s side as he won repeated Chinese investments over the border in South Carolina — that the state landed this major factory announcement. The first meeting at the headquarters of Sentury came just weeks after Mr. Ling’s appointment was announced in an exclusive Global Atlanta interview.

The mild-mannered investment recruiter was prescient in that discussion, predicting that the best was yet to come.

“We are only seeing the first crop of Chinese projects coming to this country. I still consider myself at the peak of my career,” he told Global Atlanta at the time.

Calls to Sentury’s Miami office went unreturned, as did calls and emails to the mayor of Haywood County, Tenn., where the Memphis megasite is located. A spokeswoman for the Tennessee Department of Economic and Community Development said the organization doesn’t comment on ongoing projects.

In a move some said shows Sentury’s serious commitment to innovation, the company last year hired Rami Helminen, formerly a senior vice president ofFinland’s Nokian Tyres P.L.C., to oversee the expansion into the U.S. and to become CEO of the U.S. manufacturing operations, Sentury CEO Mr. Lin toldTire Business magazine last December.