During the last two decades, we've become accustomed to headlines about American manufacturers moving operations to China, so much so that they've drawn our attention about as much as the proverbial “dog bites man” headline.
Well, earlier this summer, the Lehigh Valley was able to deliver the equivalent of a “man bites dog” headline.
Taizhou Fuling Plastics Co., the largest manufacturer of plastic tableware and kitchenware in China, cut the ribbon on its first American manufacturing operation, right here in Upper Macungie Township in the Lehigh Valley. Yes, a Chinese manufacturer setting up shop to make its products in the United States with Americans, 75 of them to start.
Fuling is investing $21.3 million in an 88,000-square-foot manufacturing facility that sits on 7.7 acres of land in the township. The company exports its products throughout the U.S., Europe, Australia, South America and the Middle East, along with delivering to its home market in Asia.
Fuling is a supplier to the five largest American fast-food chains: McDonald's, KFC, Wendy's, Burger King and Subway. It also is the supplier for three national supermarket chains: Wal-Mart, BJ's and Target.
The chances are pretty good that you've eaten from a Fuling product. Starting in October, there's a good chance those products will come from here, made by Lehigh Valley workers.
The company decided to open its first U.S. manufacturing operation in the Lehigh Valley after considering locations in North Carolina, South Carolina, Virginia, Maryland, New Jersey and four different sites in Pennsylvania.
There are two interesting dynamics here at work: Chinese manufacturer coming to the U.S. and the Lehigh Valley as the selected location.
Growing wages and increased safety, health and environmental standards – mostly demanded by customers outside of China – have helped to reduce the cost delta between Asian and American manufacturing.
In addition, the increasing cost of transporting good across oceans to the American consumer market, still the largest in the world, shrink the delta even more.
Finally, pressure from consumers and customers to show a Made in the U.S.A label, particularly on products used in the food and beverage sector, have helped to level the playing field.
But, why the Lehigh Valley?
Let's start with something many people here don't realize. The Lehigh Valley is the 68th largest metropolitan region in the United States and has a $33 billion economy with more than 15,000 businesses. Most importantly, we are strategically located to access nearly the entire Northeast consumer market in one day's drive.
From the Lehigh Valley, a truck can get beyond Boston to the north, to North Carolina to the south and out to Ohio and the Great Lakes in an eight-hour drive. That's 60 percent of the United States consumer market.
And in Lehigh and Northampton counties, along with Berks County, a company has a region with an experienced manufacturing workforce, a good skills training infrastructure, research universities and labor, land and building costs that are much lower than more heavily populated regions such as North Jersey, New York City and Philadelphia.
“We selected the Lehigh Valley because of its location and the cooperation of officials from the state and the Lehigh Valley to bring us here,” Hu Xin, Fuling CEO, said during the ribbon-cutting ceremony May 29.
The Chinese business leader also made clear “it's a wise choice by a responsible entrepreneur to establish a factory near its customers.”
That's great news regarding the prospect for continued growth of the manufacturing sector in our region – and the potential to continue to attract international companies to our backyard.
Regular columnist Don Cunningham is the president and CEO of the Lehigh Valley Economic Development Corp. He has had a 24-year career in the Lehigh Valley's public and private sectors, working for or leading some of the most respected companies, institutions and governments in the region and the state.