Fuling Global Inc., which makes plastic straws in Upper Macungie Township and China, will open a manufacturing plant in Monterrey, Mexico, the result of ongoing trade tensions between the United States and China, the company said.
The Mexican operation, which will make paper straws and cups, will be only the second overseas expansion for the China-based company. Fuling opened its Upper Macungie plant in 2014.
Fuling’s shift to paper drinkware comes at a time when plastic straws and other disposable plastic products face criticism for polluting the environment.
The company’s plastic utensils and other disposable items are used by more than 100 companies primarily in the U.S. and Europe, including Subway, Wendy’s, Burger King, Taco Bell, KFC (China only), Walmart and McKesson.
“The ongoing U.S.-China trade tensions cast uncertainties for our export business to the U.S. market, our largest market segment that accounted for 85 percent of our revenues during the first half of 2018,” Guilan Jiang, chairwoman of Fuling Global, said in a statement.
“Therefore, the Mexico factory offers certain attractive benefits for us, including zero tariffs on trade between the U.S. and Mexico, as well as low labor and transportation costs. We have high hopes for the Mexico factory and view it as a key step for our continuing global expansion,” Jiang said.
Fuling signed a building lease with Interpuerto Industrial Park and expects to begin work on a $2 million renovation in January. The plant will be able to make up to 10,000 tons of product per year, the company said, adding that it plans to recruit workers in March.
Fuling opened a new plant in Wenling, China, in 2017.