Posted on Apr 4, 2015 by Jennifer Fitch
WAYNESBORO, Pa. — When a couple international companies made commitments to open manufacturing plants in Franklin County, Pa., during the worst period of the United States’ most recent recession, they ended up serving as a catalyst to bring to the county a dozen businesses headquartered in Brazil, Germany, England, Ireland, Denmark and India.
“Now, they’re here. They can become ambassadors for us,” said L. Michael Ross, president of the Franklin County Area Development Corp.
The region’s largest manufacturers like Manitowoc, JLG, Volvo Powertrain and Volvo Construction Equipment have long produced their machinery around the world. Today, businesses within their global supply chains are opening North American facilities to further support those manufacturers.
For instance, TORCOMP, a preferred vendor for Volvo Construction Equipment, is a Brazilian manufacturing company with a new location in Cumberland Valley Business Park in Chambersburg, Pa. It is across from DeeTag, a Canadian company that also is a supplier for Volvo CE, which has its own headquarters in Belgium.
DeeTag followed Volvo CE to the greater Shippensburg, Pa., area when it closed a plant in Ontario.
Although that time in 2010 was difficult because of being somewhat forced into the move, the site selection and opening in Franklin County went smoothly, according to Dean Gordon, president of DeeTag.
“It was a Keystone Opportunity Zone (which offers companies reduced state and local taxes). It was really built to our requirements,” Gordon said of the plant.
DeeTag, which manufactures hydraulic hose assemblies, found a strong workforce in Franklin County and feels it has potential to develop relationships with additional original equipment manufacturers, he said.
A lot of the original equipment manufacturers, or OEMs, are looking for similar parts, such as hydraulic cylinders, Ross said.
Franklin County Area Development Corp.’s goal is to get the OEMs’ existing suppliers here and work with them to develop new contracts with other manufacturers, he said.
“We can avail support for those companies that is meaningful for them and the OEMs,” Ross said.
Gate 7 arrives, thrives
Gate 7 — a firm from Newcastle, England — came to Franklin County to make decals for Manitowoc cranes and other businesses. It employs 16 people in Antrim Commons Business Park in Greencastle, Pa.
“We have very niche products for OEM customers,” said John Reay, executive vice president of Gate 7.
Gate 7 maintains specific hues of colors for companies such as Manitowoc, Volvo and Sunbelt Rentals. Its decals are made through thermal transfer and ink jet processes, and a product called “metal photo” is a plate with serial numbers that cannot be removed using chemicals or blades.
Gate 7 is growing faster than anticipated, with 2012 sales doubling 2010’s sales. The company recently asked a tenant in its building to move out to create additional space, and discussions are under way to further expand to the back of the property.
“The site was always planned to be 15,000 square feet eventually,” Reay said.
Gate 7 initially had personnel working from the Manitowoc campus in Shady Grove, Pa., then occupied a leased property in Greencastle starting in 2008. They opened in Antrim Commons Business Park in September 2013. Reay said launching U.S. operations in the economic downturn created a strain, but it also gave the company a slower time during which it could get its footing.
“It came to a point in 2007 when the exchange rate (between the U.S. dollar and British pound) was basically 2-to-1, and it was almost like giving our customers a 20 percent discount and still having to pay the cost of shipping. We then started to look at setting up a facility, and we did that in 2008,” Reay said.
An international flavor
Atlas Copco from Sweden manufactures mining and construction products in Fort Loudon, Pa. Germany’s VETTER Forks has a warehouse and modification facility in the Cumberland Valley Business Park, and Burnside Autocyl from Ireland is making hydraulic cylinders nearby.
Danfoss Group of Denmark acquired drives manufacturer Vacon, which earlier came to the area through an acquisition of TB Wood’s electric division.
Wipro Infrastructure Engineering from India ended up in Chambersburg in a non-traditional way. The company contacted businessman Eric Olson, a Chambersburg native, about establishing operations in the United States.
“All of the building blocks are here,” Olson said, saying the area offers lower energy costs than some countries, a strong employment pool, rail and highway infrastructure, and access to ports.
Olson, Wipro’s general manager of North America, credited Ross with playing a large role in securing the deal for what would become Wipro Enterprises Inc. locally.
“Certainly, the first phone call I would make (as an international business considering U.S. expansion) would be to Mike Ross and his people,” Reay said, saying Franklin County Area Development Corp. helped him with construction and state programs for financing.
Ross went on his first international trade mission to Brazil in 2012 under an invitation from Sweden-based Volvo Group, which was holding a supplier forum. That trip allowed him to establish contact with Wipro Infrastructure Engineering and TORCOMP.
He later returned to Brazil with Pennsylvania’s then-governor, Tom Corbett, to make a business announcement. In August 2014, he flew to Ireland for a three-day trip in which he pitched a property to Burnside Autocyl.
Ross said he tells business owners he’s there to build relationships, saying Franklin County Area Development Corp. can build structures and lease them to companies, help companies find existing structures they can purchase, or handle permitting and financing details if they want to build.
For Gate 7, Franklin County Area Development Corp. negotiated the sale of the property, conducted a design-build process and managed construction for the company. It did the same for TORCOMP.
DeeTag wanted to lease 15,000 square feet, and Franklin County Area Development Corp. could not find a suitable structure when it canvassed real estate inventory. The development corporation, a private-public partnership, decided to build a facility and lease it to DeeTag.
“Once you’ve made the commitment to be here, we want to support you,” Ross said.
Jennifer Fitch is a reporter for The Herald-Mail. She can be reached via email at firstname.lastname@example.org.