SUMTER, S.C.—And the winner is … Sumter County, S.C.
The site of the promised greenfield passenger and light truck tire plant for Continental Tire the Americas L.L.C. will be about 120 miles from the Continental A.G. subsidiary's home office, and represent a $500 million investment during the next 10 years.
The first phase of the project will result in a factory with the capability of turning out nearly 5 million passenger and light truck tires annually by the time it reaches full production levels in 2017, Conti executives said at an Oct. 6 press conference in Sumter. The second phase of the expansion is expected to raise the facility's capacity to 8 million units per year by 2021.
The plant—located at a site off of U.S. Highway 521 in Sumter County—will create about 1,700 jobs, Conti said. That will include 80 positions related to an investment of more than $4 million to expand the tire maker's headquarters in Lancaster County, S.C., near Charlotte, N.C.
The company said the project is intended to meet growing demand from both retail and original equipment customers for Continental- and General-brand tires in the U.S. and the Americas.
Jochen Etzel, CEO of Continental Tires of America, said the company has changed its strategy of where to build tires.
“If you look at the last few years, foreign exchange volatility is a major factor in our decision-making, as well as volatility in logistics costs,” he said. “It has become part of our key strategy to produce product in the market that we are selling, which is not the trend 20 years ago.”
Nikolai Setzer, a member of Continental's executive board and head of Continental's global tire business, called the project a “part of Continental's growth strategy worldwide and, especially in this case, for the U.S. market.”
Increasing demand for Continental and General auto and LT tires in the U.S., as well as improved results for the North American unit, “has made this significant investment possible,” Setzer said during the press conference announcing the decision.
The German company's supervisory board announced in spring the firm's intention to build another tire plant in the U.S. Matthias Schoenberg, at the time CEO of the North American operation, said the company was looking at locations in the southern U.S., reportedly in North Carolina and Louisiana.
South Carolina offered numerous incentives—upward of $40 million—for Conti to pick the state as the site for its new plant, according to county and city officials.
Among the incentives available to Conti is a $31 million grant to buy and improve the 330-acre site south of Sumter, approved by the Sumter County Coordinating Council. There also is a $4 million federally funded Community Development Block Grant through Sumter County to offset costs associated with road and public infrastructure improvements, according to Sumter County Economic Development.
Additionally, Sumter County has earmarked $4 million toward building water and sewer lines to the plant site along State Route 51 as part of a larger infrastructure improvement package that's financed by a 1-cent increase in the local sales tax approved by county residents two years ago.
Sumter County Council Chairman Eugene R. Baten called Conti's decision a “real game-changer” for the region.
“Continental clearly recognized that we have a skilled, dedicated and loyal work force that will help make the company successful.”