Chinamex USA, whose investment was lauded as a success that would draw more Chinese firms to Atlanta, is closing its office less than two years after opening its doors.
Employees have been notified of the Beijing-based firm’s decision to close the office, as have local economic development officials, GlobalAtlanta has learned.
The company operates a more than 14,000-square-foot facility on the ground level of the 201 17th St. building near Atlantic Station. The showroom displays an array of products – from jet skis to cell phones – manufactured in China’s Hubei province, which paid Chinamex to operate it.
The opening in December 2009 attracted then-mayor-elect Kasim Reed, state officials and Hubei’s commerce minister.
Chinamex USA CEO Olivia Wu didn’t immediately return calls seeking comment.
Jorge Fernandez, vice president of global commerce at the Metro Atlanta Chamber, said he had been notified about the closure.
Losing companies the chamber and its partners worked hard to recruit is “part of the game,” but it’s never easy, Mr. Fernandez said. He visited Chinamex on trade missions to China and went to its Netherlands facility over the course of two years wooing the company.
“This is very disappointing in many aspects. We grew the relationships, there are jobs associated and when a business fails, it’s not a good thing,” he said.
He noted that Chinamex’s business model is complex and that its failure in Atlanta isn’t indicative of the company’s overall future. An operation established in Mexico similar to its original one in Dubai – focused on wholesale sourcing – has been doing well.
The blow won’t change the chamber’s overall China strategy other than to strengthen its focus on educating Chinese prospects and playing up success stories like SANY America, a construction equipment maker that has invested $60 million in Peachtree City.
“This will make us work harder when we go back to China to encourage companies and to make sure that they have the right business plan, that they have right procedures,” Mr. Fernandez said.
Chinese investment in the U.S. is “still a trickle rather than a wave,” with most coming in the form of mergers and acquisitions rather than completely new operations, said Mason Cargill, a partner with law firm Jones Day in Atlanta.
While more Chinese investors will come, they currently find it difficult to adapt to American business culture, said Mr. Cargill, who works on cross-border transactions with U.S. firms in China and vice versa.
Having a strong contingent of Chinese companies could only help Atlanta, but losing one shouldn’t impede efforts to market the city in China.
“Unless the Chinese company that closed up shop is in the same industry as the other Chinese company, I personally doubt that it would have any effect at all,” Mr. Cargill told GlobalAtlanta.
But Chinamex’s closure could have some fallout for Atlanta’s ties in Wuhan, Hubei’s capital, and derail plans for delegations the company was slated to host this year, said Lani Wong, chair of the National Association of Chinese-Americans, which hosted dinners for Chinamex during its search and after its opening.
It’s unclear whether a Wuhan pharmaceutical delegation or a Shaanxi province group still plan to visit Atlanta later this year.
Still, Ms. Wong is hopeful about the trajectory of the Georgia-China relationship.
“Maybe it’s a small setback, but China’s such a big market, so I don’t think we want to give up yet,” she said.
Chinamex hosted its first delegation in mid-2010 after a six-month lull that followed its grand opening.
In 2007, Chinamex officials said they were considering investing hundreds of millions of dollars in an Atlanta business incubator.
That grandiose vision never materialized, but when the company opened the scaled-down showroom, it was still pledging to introduce hundreds of Chinese companies to Atlanta and the Southeast.
It’s unclear what will happen with Chinamex’s seven-year lease. An official for Carter, the corporate real estate firm that represents the property owner, wouldn’t comment on whether it has received word that Chinamex would vacate the building.