Texas coast wins largest single manufacturing investment by a Chinese company in the U.S.
Editor’s Note: The following article appeared in the March/April 2009 issue of Texas Rising.
A skilled work force and strategic location helped a Texas coastal city win a $1 billion pipe manufacturing facility.
Local Government
Tools that Made
the Difference:
San Patricio County
Landing a $1 billion pipe facility does not happen every day, nor is it easy. In the case of Gregory’s planned TPCO America Corp. facility, the task included meetings, trips to China and multiple civic and local government groups working together.
“One of the things we did well was assembling the team, from industry to community to education to government,” says J.J. Johnston, executive vice president for business attraction and external marketing for the Corpus Christi Regional EDC. “That collaboration and coordination of efforts helped cut the red tape and helped the company understand our region.”
TPCO and area representatives are working on a variety of state and local incentives, including employment-based incentives, tax abatement, job training and infrastructure. With about 600 jobs expected and an estimated $18 million in annual salaries at peak production, the local area is the big winner.
“It means 600 families are going to have high-paying jobs,” says Johnston. “This is a true definition of new money coming into an area.”
TPCO America Corp. (TPCO), a subsidiary of China-based Tianjin Pipe (Group) Corp., will build the plant near Gregory in San Patricio County. This will be the largest single manufacturing investment made by a Chinese company in the United States. The facility could create as many as 600 jobs and have an estimated $2.7 billion economic impact in 10 years.
Representatives of TPCO selected the Gregory area over 33 Texas, U.S. and international locations. TPCO officials first visited the area in fall 2007, and the visit opened a dialogue and spawned numerous meetings in Texas and China between area and company representatives. Those meetings helped foster the relationship between TPCO and its new Texas home.
“Thanks to the excellent job done by our friends at the Corpus Christi Regional Economic Development Corp. (EDC) and the San Patricio EDC, and the enthusiastic support of local government entities, the Gregory-Portland Independent School District and the state of Texas, San Patricio County topped the other candidates as the winning site for our project,” says Zhang Wenfeng, vice president of TPCO.
The Gregory facility is expected to manufacture up to 500,000 metric tons of seamless pipe for the oil and gas extraction and production industry annually and employ hundreds of local workers.
“We’re looking at 300 jobs in the first two years, and double that in the fourth or fifth year,” says J.J. Johnston, Corpus Christi Regional EDC’s executive vice president for business attraction and external marketing. “And those are direct jobs, not construction jobs, of which I think hundreds will also be created.”
The area’s strategic geographical location, convenient access for incoming raw materials and outgoing products, availability of power and other utilities and work force were all factors in the final decision, TPCO’s Wenfeng says.
“We have a work force skilled in metal handling and welding, with great port assets, rail and pipelines for the facility,” says Johnston. “While we tend to build things here rather than invent them, our region is becoming better equipped to receive new knowledge and technology. The TPCO project will bring both and will utilize the ever-increasing amount of recent computer science, engineering and technical graduates.”
TPCO’s Chinese-manufactured products are known throughout the oil and gas industry and are used in more than 90 countries. Having TPCO’s U.S. home in Texas places it close to major customers such as Shell, Chevron and others. About 25 percent of the company’s product already goes into the United States, and the Gregory facility will serve about 70 percent of that need.
The facility is probably two-and-a-half years away from producing pipe, but crude oil’s lowered price, hovering at about $50 a barrel, is not slowing TPCO’s expansion enthusiasm. The company does not expect the price to remain that low.
“It’s a tough industry to be in,” Johnston says. “As prices went down, we asked them if they were still coming in. They assured us that they need this expansion.” TR
Tools that Made the Difference for San Patricio
Landing a $1 billion pipe facility does not happen every day, nor is it easy. In the case of Gregory’s planned TPCO America Corp. facility, the task included meetings, trips to China and multiple civic and local government groups working together.
“One of the things we did well was assembling the team, from industry to community to education to government,” says J.J. Johnston, executive vice president for business attraction and external marketing for the Corpus Christi Regional EDC. “That collaboration and coordination of efforts helped cut the red tape and helped the company understand our region.”
TPCO and area representatives are working on a variety of state and local incentives, including employment-based incentives, tax abatement, job training and infrastructure. With about 600 jobs expected and an estimated $18 million in annual salaries at peak production, the local area is the big winner.
“It means 600 families are going to have high-paying jobs,” says Johnston. “This is a true definition of new money coming into an area.”