Giti Tire in the Press
Giti Tire missing piece of the puzzle for Chester County
BY DON WORTHINGTON June 21, 2014
RICHBURG - It was a blustery March day as the all-terrain vehicle made its way across what had once been farmland. Tall trees hid the land from Interstate 77, S.C. 9 and Old Richburg Road. Hidden, too, were deer, turkeys and other wildlife.
When the ATV approached a pond, the gentleman passenger asked the driver to stop so he could look at the swimming geese.
As the ATV idled, the other passengers, two women, talked.
“Will the people of Chester embrace us?” Mrs. Liem asked.
“Will your people embrace us?” responded Karlisa Parker.
Mrs. Liem nodded. Parker teared up.
Parker’s emotions were more than personal – Chester County had finally landed the big one.
Giti Tire – with 1,700 jobs, and the possibility of more, and a $560 million investment that likely would attract more tire-related businesses, as well as new retail and residential development – would be coming to Chester County.
Much more work needed to be done, but at that moment – and later at Charlotte Douglas International Airport, when Mrs. Liem, the matriarch of the family that owns Giti Tire, kissed Parker on both cheeks – Parker knew Chester County would never be the same.
A new day
Chester County’s new day began Monday, when Giti Tire’s Enki Tan, Gov. Nikki Haley and Chester County Supervisor Carlisle Roddey – flanked by large video screens and a dais that included more company, state and local officials, as well as Singapore’s ambassador to the United States – unveiled the company’s name and elephant logo. Soon after, workers removed the covers from Giti tires ringing the porch of the Gateway Conference Center in Richburg.
The names on the tires could have been different. They could have been Hankook or Yokohama brands – tire companies that almost came to Chester, but went to Tennessee and Mississippi instead.
Years earlier, the names could have been Mercedes-Benz or Nissan.
The recruitment of Giti Tire is as much a story of success as it is the sum of Chester County’s failures.
Roddey jokes about the failures, saying the county has been the bridesmaid for so long, it could have filled a landfill with bouquets. But with each failure, lessons were learned.
In quick succession over the past several years, Hankook, Yokohama and Toray Industries considered Chester County and its 1,100-acre “mega site” between S.C. 9 and Old Richburg Road.
Anxiety began to rise as opportunity after opportunity slipped away from the county with one of the highest unemployment rates in the state:
- Hankook, a South Korean company, wanted to build an $800 million plant that would employ up to 1,800. It went to Clarksville, Tenn., just west of Nashville.
- Yokohama, a Japanese company, wanted to build a $500 million plant that would employ up to 2,000. It went to West Point, Miss.
- Toray Industries, also a Japanese company, was willing to invest $1 billion over the next 10 years and employ 500 to make plastic resins and carbon fiber composite materials. It went to Spartanburg.
Those decisions “were devastating,” Parker said.
Yokohama officials took the unusual step of returning to Chester County to explain their decision. They said they liked Chester County, but chose West Point because of its proximity to Nashville. Company officials liked country music.
They told Chester County officials they were doing the right things.
The only thing Parker decided to change the next time was to listen more and not get caught up in the emotions of the deal.
Before making a deal, companies will look for all the reasons not to come. Typically, company officials won’t ask those questions directly, but their conversations offer clues. Parker was determined to listen for the clues and have the answers.
Haley said Giti Tire’s initial interest in Chester County came after she spoke at a Wal-Mart conference in August 2013. Giti supplies Wal-Mart with passenger and light truck tires.
When Giti Tire officials approached the state Department of Commerce, officials there were confident but cautious. South Carolina was one of eight states in the running. In all, Giti would look at 25 sites.
Commerce officials were confident because of South Carolina’s experience with Michelin, Bridgestone and Continental tire companies. The state was already the top tire producer in the United States.
Recruiting the fourth tire company was “harder,” Haley said. While the state could – and did – sell its experience, she said, recruiting Giti was different.
South Carolina was dealing with a company based in Singapore, 10,000 miles from the state, and, in terms of time, 12 hours ahead. If it’s noon in Chester, it’s midnight in Singapore.
Chester County officials knew that even a one-hour time difference could cause problems. When recruiting Nissan, there was concern how to coordinate a Chester plant with the company’s engine plant in Tennessee, said Mike Enoch, general manager of the Chester County Natural Gas Authority and past chairman of the Chester Development Association.
In addition to time and distance, Giti also was building its first plant outside Asia.
“Giti was nervous,” Haley said. “We had to hold their hands from start to finish.”
In recruiting Giti, South Carolina had to consider its existing tire plants, Haley said. Whatever site the state offered, it couldn’t compete with the workforce of Michelin, Bridgestone or Continental. Commerce officials also let those companies know of their intentions to recruit Giti, she said.
The deals made to get those tire companies to come to South Carolina were the template for the Giti deal, Commerce Secretary Bobby Hitt said.
The state put up a $35 million grant to help Continental build a $500 million, 1,700-job plant in Sumter. It made a $15.5 million grant to help Bridgestone with projects that represent a $1.1 billion investment and 702 jobs.
The state awarded Chester County a $37.8 million grant to help lure Giti Tire.
“There’s no cash up front,” Parker said, and grant funds will be paid out to Giti over time for eligible site improvements.
All three tire companies also qualified for job development tax credits. Those credits return part of new employees’ withholding taxes to the companies, which can be used to offset the cost of buying land, equipment or training people.
State officials have declined to estimate a value of the credits, because they are based on variables in the future. The credits can last up to 10 years.
Back in March, Mrs. Liem asked for the ride around Chester County.
“She wanted to see the people, see what’s there,” Haley said. Mrs. Liem’s interest impressed Haley. Still, “we were holding our breath.”
More meetings followed. Each time Giti officials visited, Parker made sure to give them a helicopter ride over the “mega site.” The aerial view reinforced the site’s prime asset – its location near I-77, , near the Charlotte airport, accessible by rail and easy access to the port of Charleston.
During one of those tours, the helicopter landed at York Technical College’s Chester campus for a meeting on what the college could offer Giti.
Roddey remembers a dinner meeting with the Liems.
He drove his pick-up to Charlotte, where the Liems greeted him. Roddey got out of the truck and began to walk with the help of a cane because of back problems.
“They knew I was hurting,” he said, “but were impressed I came by myself.”
Such personal touches offered by Roddey and Haley impressed the Liems, Parker said.
Roddey said he was just doing what he has always done, offering his homespun analysis of everything Chester County.
“I never pushed it,” he said. “I just talked about the people of Chester.”
The personal comfort level was what Giti officials sought.
When the company picked its final three sites, all could have worked, said Julianto Djajadi, executive vice president of business operations for Giti Tires USA.
“It came down to the intangibles,” he said. “Do we feel right about coming there. We’re going to be there for a long time. Do we feel ‘the fit?’ ”
Giti felt the fit.
Chester County felt the fit, too.
“It’s like working a puzzle,” Roddey said. “There’s one piece you need to find, and we found it. Giti was the piece we needed.
“This is as good as I could ask for.”
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Giti Tire to bring core values to Chester County
BY DON WORTHINGTON June 18, 2014
CHESTER, S.C. - Julianto Djajadi put his hands together, creating a rectangle slightly bigger than one of his hands.
The rectangle represents where the rubber meets the road.
Djajadi, executive vice president for Giti Tire USA, quickly listed the factors affecting a tire’s design: It must support a vehicle’s weight and control its movement. It must operate in the hot and the cold and all weather conditions in between, and safety is the top consideration.
The rectangle also “represents the whole university,” said Djajadi (duh-ZHAW’-dee). He listed the different engineers needed to design a tire and then all the skills – from manufacturing to marketing – to turn the design into a product and to put a tire on the road.
Soon the rectangle will include workers in Chester County. Giti Tire is building its first U.S. plant between S.C. 9 and the Old Richburg Highway. The $560 million plant will be visible from Interstate 77.
Employment is expected to exceed 1,700 jobs. Output is expected to be 30,000 passenger and light truck tires a day or 5 million annually. Operations should begin by the first quarter of 2016.
Whether it’s an engineer or tire plant operator, Giti wants its employees to “put their passion into it,” Djajadi said. “We want them to work like an artist, they have to be proud of what they are doing.”
Employee pride and a philosophy of conserving and giving back to the environment are the core values of Giti, he said. The company has invested $1 million in reforesting projects in Indonesia and China and helped fund more than 10,000 operations in China to remove cataracts from the eyes of its people.
The family-owned company started in 1951 making bicycle tires and inner tubes in Indonesia. In 1981, the company began making passenger and commercial tires.
In 1993, it opened its first tire plant in China. Giti now has seven tire plants in China, making 140,700 tires a day and employing 19,000. It also owns almost 50 percent of Gajah Tunggal tire company in Indonesia. The combined output of the Chinese and Indonesian plants makes Giti the 10th largest tire company by production volume.
The company has provided tires to automotive makers and to the resale market. Fiat-Chrysler and General Motors have each honored Giti as a supplier of the year multiple times.
The company has sold tires in the U.S. for more than 20 years under the brands of GT Radial, Primewell, Dextero and Runway at retailers such as Wal-Mart and Firestone tire stores.
Its expansion in the U.S. market has been swift. Giti Tire opened its U.S. headquarters and distribution center in Rancho Cucamonga, Calif., in 2005. In 2011, it opened its eastern distribution center in Tennessee, but has since split that center into operations in Georgia and Texas.
In 2013, it opened a research and development center in the heartland of tires, Akron, Ohio.
“They’ve done the right things to connect to the U.S. markets,” said Bruce Davis, who follows the tire industry for several Crain Communications business publications.
Giti is just one of a number of tire companies building in the South. Between $3 billion and $4 billion is being invested in new plants or expansions, Davis said.
Five of Giti’s competitors are expanding in the South: Continental in Sumter, Hankook in Clarksville, Tenn.; Yokohama in West Point, Miss.; Toyo in White, Ga.; and Kumho in Macon, Ga. Goodyear recently announced it will build a new plant in the “Americas,” but has not started site selection yet.
The expansion comes as U.S. tire sales are expected to start growing, possibly as much as 8 percent next year, according to some analysts.
The expansion also comes as imports of tires made in China are expected to continue to rise. Three years of increased U.S. tariffs on Chinese-made tires ended in September 2013.
The increased tariffs – from 4 percent to as high as 39 percent – made it difficult for companies such as Giti, Djajadi said. But the decision to build in the United States, Djajadi said, was made six years ago, before the tariffs increased. The tariffs did however, force Giti to look at its commitments to its markets, Djajadi said.
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Giti Tire finds ‘fit’ with Chester County
BY DON WORTHINGTON June 17, 2014
CHESTER, S.C. - When Giti Tire narrowed its search for its first U.S. tire plant to three sites, any of the three would have worked, company officials said Tuesday.
But what kept the Singapore-based company coming back to Chester County was the variety of people who promoted their community, said Julianto Djajadi, executive vice president for business operations for Giti Tire USA.
The inclusion of business people, volunteers and other residents – in addition to the normal array of politicians and economic development types – showed the commitment of Chester County.
“When it came down to three, it could have gone either way,” Djajadi said Tuesday before departing Rock Hill for the company’s U.S. headquarters in Rancho Cucamonga, Calif. Djajadi did not disclose the other two locations.
“All could make it work. It came down to the intangibles. Do we feel it’s the right community, we’re going to be there a long time. Do we feel the ‘fit’?”
The variety of people was important for a company that values diversity, Djajadi said. Seven different nationalities are represented on the company’s nine-member management team and company-wide there are about 50 nationalities, he said.
“It helps us become global citizens,” Djajadi said.
With Chester County “having more people involved in the process – we liked that,” he said.
Giti found its “fit” and will build a $560 million plant and create about 1,700 jobs in Chester over the next decade. The plant, announced Monday, will be at the county’s “mega site,” a sprawling 1,000-plus acre parcel off Interstate 77, bounded by S.C. 9 on the north and Old Richburg Road to the south.
The site is ideal for Giti. The interstate gives the tire plant access to the company’s warehouses in Georgia and Texas. Company officials also cited access to the port of Charleston and airports in Columbia and Charlotte in making their decision.
The location, Djajadi, said, puts Giti closer to its customers such as Firestone and Discount tire stores, and Wal-Mart. Now it takes between 60 and 100 days for a Giti tire to make its way from factory to dealer. The average time for competitors is about 20 days, he said.
Five of Giti’s competitors are building or expanding plants in the South: Continental in Sumter; Hankook in Clarksville, Tenn.; Yokohama in West Point, Miss.; Toyo in White, Ga.; and Kumho in Macon, Ga.
To attract Giti, South Carolina offered incentives. The state’s Coordinating Council on Economic Development approved a $37.8 million grant to help purchase and improve the mega site. The Rural Infrastructure Authority approved a $2 million grant to assist with extending water and sewer to the site.
The company also will qualify for job development credits which provide companies with funds – for up to 10 years – to help offset the cost of locating a facility, buying equipment and training employees. The credits are based on the number of jobs created.
The Chester County Council also approved a fee-in-lieu ordinance that will reduce the company’s property taxes. Because the mega site is part of a “multi-county” industrial park, 1 percent of the property taxes will come to York County.
Locating in a multi-county industrial park offers companies the potential of earning an additional $1,000 income tax credit for each job created as a result of the project.
Job tax credits are applied against an employer’s income tax liability and vary from $1,500 to $8,000 per job created depending on a number of factors. The credit can eliminate up to 50 percent of the employer’s state income tax liability.
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Giti Tire Announces Plan to Build New Plant in South Carolina
Giti June 16, 2014
Chester, S.C. – Giti Tire executives joined Governor Haley along with State and Chester County officials today in announcing the plan to build a new tire manufacturing plant to meet growing demand in the North American market. The $560 million facility will be located in Chester County and is expected to generate 1,700 new jobs over the next 10 years.
“This significant investment represents our strong commitment to customers in North America. This is a key milestone for Giti Tire and an important part of our growth strategy worldwide. Existing business and strong demand for Giti Tire’s passenger and light truck tires in North America has made this significant investment in South Carolina possible. Giti Tire would like to thank Governor Haley, Secretary Hitt, the state and people of South Carolina, Chairman Roddey and the Chester County community for welcoming us,” said Enki Tan, Executive Chairman of Giti Tire.
This is the first greenfield project in North America for Giti Tire. The plant will produce passenger and light truck tires for the replacement and original equipment markets. The plant will be built with a focus on maintaining a healthy balance with the environment and following Giti Tire’s green initiatives.
"Chester County is an excellent location for Giti Tire, offering an extensive and efficient infrastructure network including interstate highways, rail, close proximity to airports and a major metropolitan area to support the company’s needs and growth for many years to come,” said Lei Huai Chin, managing director of Giti Tire.
"The new facility will combine manufacturing plant and distribution center with total building area estimated to be 1,800,000 square feet. The first phase of production capacity is expected to be 5 million tires annually. Giti Tire plans to further increase production capacity in response to future market demand and conditions,” said Tom McNamara, executive vice president of sales and marketing, Giti Tire (USA) Ltd.
Quotes from South Carolina State and Chester County Officials
"This is another huge win for our state and Team South Carolina. We are the nation’s tire capital, and Giti’s decision to come to our state is another great sign that our economic development efforts are paying off for the hardworking people of South Carolina. We celebrate Giti Tire’s $560 million investment that will create 1,700 new jobs in our growing tire industry.”
– Gov. Nikki Haley
"Today we welcome South Carolina’s fifth OEM tire manufacturer, which further bolsters our state’s reputation as a manufacturing powerhouse and the nation’s tire capital. We look forward to a long and successful partnership with Giti Tire in our state."
– Secretary of Commerce Bobby Hitt
"SC Ports Authority welcomes Giti Tire to South Carolina. We look forward to handling their import-export needs through the Port of Charleston and continuing to support our state’s growing tire industry."
– Jim Newsome, president and CEO of the South Carolina Ports Authority
"Once again, Chester County has proven its dedication to grow and prosper economically. We celebrate the company’s decision to invest and create new jobs in Chester County. This announcement marks an important milestone in the history of Chester and we are extremely excited to be selected as the new location for Giti Tire. We have no doubt that Giti Tire will see much success in Chester County!"
– R. Carlisle Roddey, Chester County supervisor and chairman of Chester County Council
"We are pleased to welcome our new partner to the Chester County business community. Giti Tire is known worldwide for their industry leadership and commitment to producing the highest quality products available in the marketplace today. This significant investment in a North American production facility means they are serious about expanding their global brand and continuing to lead the industry for many years to come. We are elated that they chose Chester, South Carolina and are anxious to work with them building this new world class tire manufacturing operation."
– Brian Singleton, chairman of the Chester Development Association
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