Austrian wood-products maker Egger to build $700M NC factory

Dive Brief:

Austrian particleboard manufacturer Egger plans to spend $700 million over 10-plus years to build its first U.S. factory, in Davidson County, NC, according to the Winston-Salem Journal. The company said it will employ 770 workers there.
The first phase is expected to open in 2020 and will serve the construction, flooring and furniture industries; it will cost $300 million and create an estimated 400 jobs. In exchange for its investment in the 4.5-million-square-foot facility, Egger will receive $10.3 million in incentives, with at least $5.3 million tied to job creation.
Egger said average salaries at the plant will be $40,000, which is 8.5% higher than the average pay in the county, according to the Triad Business Journal. Egger said it will also buy from wood suppliers and sawmills in the region.

Dive Insight:

The new Egger plant will be positioned to supply one of North Carolina's major industries — furniture manufacturing. The state is home to factory operations for furniture companies like Ethan Allen and Ashley Furniture. Those operations are supported by the state's wood-products manufacturing industry, the fifth-largest in the country, according to the North Carolina Economic Development Partnership.

As a result, Egger should have a ready supply of workers already familiar with wood-based materials production, enabling the company to take the factory online relatively quickly.

Egger is the latest foreign company to bring its manufacturing operations to the U.S. Taiwanese manufacturer Foxconn also announced this week that it was investing $10 billion into a Wisconsin flat-panel display screen factory that, when complete, will generate 3,000 jobs. In return, the company will receive $3 billion in economic incentives from the state over a 15-year period.

Those employment projections are short of Foxconn Chairman Terry Gou's June estimates that such a move could create up to 50,000 new jobs in the U.S., however.

Places like Taiwan and China were once considered to be two of the least-expensive markets in which to manufacture products. But with wages there on the rise, the U.S. has become more attractive to domestic companies looking to invest in goods-producing factories. Recode reported that six in 10 jobs brought back to the U.S. from 2010 through 2016 were from China.