Hubner to build plant in Tennessee

DUNLAP, Tenn.—Hubner GmbH & Co. K.G. is getting ready to expand its rubber manufacturing presence in the U.S.

The firm is set to begin construction on an elastomeric products plant in Dunlap, which represents a $10 million investment. The site initially will span 36,000 square feet with 15 employees and is scheduled to be operational in the beginning of 2020. The firm said if targets are reached it will add another 36,000 square feet in a second phase. Employment is projected to reach 70 by the end of 2024.

Construction is scheduled to begin sometime in April, according to Ron Paquette, managing director of Hubner Manufacturing Corp., the firm's U.S. subsidiary located in Mount Pleasant, S.C.

Paquette said Hubner spent a year doing its due diligence, initially looking to acquire a company. When that plan didn't work out, the firm considered 11 sites in six states, ultimately settling on Dunlap for a variety of reasons. Those include: low operational costs, a pro-business environment, a strong work force and local incentives such as tax abatements and training grants.

"They're a very pro-business state," Paquette said of Tennessee. "From an economics standpoint, they made it very enticing. The local universities and STEM programs are really strong in the greater Chattanooga area. We wanted to make sure we were getting highly qualified skilled labor to work at our company."

Hubner currently employs 125 people at its 160,000-sq.-ft. site in Mount Pleasant, which produces gangway and articulation systems for buses and trains, along with airport canopy systems used by passengers to board airlines from the terminal. Hubner also has a hub in San Jose, Calif., that employs 10 people to support its laser and photonics business.

Paquette said the firm's systems business is its largest product line, representing about 45 percent of its global sales. Its mobilities group—which includes its rubber, polyurethane and plastic manufacturing capabilities—accounts for about 35 percent, and the remainder of its global sales comes from its laser/photonics and fabrics businesses.

The Dunlap factory initially will produce rubber extruded profiles, gaskets and seals used in window systems to the transportation industry. The decision to localize production of these parts comes in response to its European customers needing to source product from U.S.-based suppliers to be in compliance with the country's "Buy America" standard.

Paquette said one requirement for a company to sell a component part to a public transportation authority is to be Buy America compliant, which requires that 70 percent of the component must be made in the U.S.

"Most rail and bus projects in the U.S. receive some form of public funding," Paquette said. "It's very rare to have something that's privately funded, so they have to comply with Buy America. These customers of ours that we supply in Europe are coming to the U.S. and want us to also supply those same parts in the America market in compliance with Buy America."

However, as Hubner's Dunlap plant grows it eventually will support other industries it currently supplies from abroad. Paquette said it has a strong European presence in aviation and will look to localize that technology to serve its customers in the U.S. in addition to chasing new business.

It also intends to bring some of its oil and gas-related production to Dunlap to locally supply some of its U.S.-based customers. Hubner produces silicone products for shaker tables on off-shore oil rigs. Those currently are supplied from Hungary and Malaysia.

Mount Pleasant also is going to see a significant boost in production thanks to a major order from the New York subway system, which just disclosed that all its new trains will have gangway systems. Worldwide, Paquette said Hubner is a dominant player in this industry with nearly an 85 percent market share, including almost 100 percent of the U.S. market.

Those systems are the interface that goes between rail cars when passengers walk through one to the next. Its rubber products business supplies components for these systems.

Based in Germany, Hubner was founded in 1946 and has since expanded across the world with locations in the U.S., Brazil, China, Malaysia, India, Italy, Hungary, Russia, Sweden, England and South Africa. It employs 3,000 at 15 international manufacturing sites with about $550 million in sales, including $35 million in South Carolina.