Manufacturing Forum: European Investors Overcome Obstacles, Grow in Georgia

Georgia has been a hospitable place to land, but recent expansions for three European manufacturers haven’t come without the standard headaches of cross-border business. 

In industries from pizza to plastics, presenters on an internationally focused panel at the annual Next Generation Manufacturing Signature Event have faced non-trivial transatlantic travails in setting up factories that will employ hundreds of workers in the state.

API Tech, a French company that manufactures Smart Pizza vending machines, anticipates hiring 175 people in Braselton when a new factory is up and running — but only if it can attract them to factory on the far northeastern reaches of the metro area, said U.S. country manager David Harlan.

“They assumed that Atlanta was a talent pool. It is 2 a.m. in the morning, but not at 8 a.m. or at 3 in the afternoon,” Mr. Harlan said. “This is not going to be a warehouse. It’s going to be technical employees, welders, machinists, robotic engineers, those types of jobs — How can we entice them to come to Jackson County?”

API Tech is also having to convert the schematics for its machines, which were designed on the metric system, to suit workers more accustomed to imperial measurements. 

And that’s just one necessary customization — as another example, caps are being added to the rivets inside the machines to avoid the risk of a cut — and a lawsuit. 

“He said, ‘We don’t do this in France, Belgium, anywhere. If someone were to stick their hand in a machine and cut themselves, the attorney would say, Don’t do that, you’re an idiot,’” Mr. Harlan said. 

Legal and permitting differences have also presented hurdles for Danish firm SP Meditec, which encountered a two-month wait for a building permit that left Managing Director Peter Fejfer at a loss when updating his superiors. 

“It’s a bit difficult to explain to them that this is just how the system works in the U.S.,” Mr. Fejfer said. 

The company, which makes injection-molded plastic parts for medical devices, has finished exterior construction on its 120,000-square-foot Peachtree City facility, its third in the U.S. after one in Cleveland and another in Mount Lebanon, Iowa. 

With new supply chain issues and sustainability demands, being closer to customers was an imperative, and being near Hartsfield-Jackson Atlanta Internaitonal Airport was critical in reaching them conveniently.  

Initially, the company wanted to land north of the city, but reality soon set in. 

“To be honest, there was not much land for sale in that area. So then we started looking a little bit more south, and then we found land that was available in Peachtree City,” Mr. Fejfer said. 

SP Meditec’s Peachtree City neighbor, Prague, Czech Republic-based Silon AG, has had a bit longer to overcome similar challenges, having established its plant for extruded plastic parts there in 2018.  

The company, which anticipates hitting 50 employees by the end of this year, has introduced some novel ways to overcome workforce recruitment and retention issues. 

Existing employees get a referral bonus for friends and family who join the team. Each year, the company hosts an innovation challenge where any employee can introduce a solution that improves manufacturing processes. The employee with the winning proposal gets a percentage of the cost savings associated with the change — without a cap on the value.

“So if it’s a $2 million savings, you could potentially get 10 percent of $2 million which is significant,” said Daniel Raubenheimer, chief sales officer for Silon in the U.S.

As much as it faces challenges, Silon has also benefited from U.S. regulations, staying as nimble as possible in a highly regulated industry where new formulations can take up to three years to create. 

A big part of that is the company’s 35 chemists on staff in the Czech Republic, who formulate plastics for particular applications like wire and cable or reducing the combustibility of electric-vehicle batteries — a winner in Georgia, where that sector is booming. 

Over the next five years, Silon plans to build a recycling plant, open a lower-end facility in Mexico and continue expanding in Georgia to meet demand from new legislation that will require the replacement of lead pipes. 

“Currently, we do about 30 to 40 million pounds. Our final plan is to do about 200 million pounds. So it is exponential growth,” Mr. Raubenheimer said. 

Pat Wilson, commissioner of the Georgia Department of Economic Development, said the state’s overseas offices in 12 markets work to help companies overcome such challenges as they invest in the United States. 

Record investment figures led by international companies in key sectors like electrification, aerospace, automotive and food processing show the U.S. is “still the safest bet in the world, no matter what’s going on in Washington,” Mr. Wilson said during a later fireside chat while introducing the benefits of the Georgia Made program for manufacturers. 

The state remains committed to supporting investors, no matter where in the world they hail from. 

“When we’re in Korea or whether we’re in Japan or whether we’re in Germany, one of the things we tell a company is that if you locate in Georgia, if you employ Georgians, if you invest in us, you’re a Georgia company, and we’re going to fight for you like a Georgia company,” he said.

The places where the state has offices tend to be correlated with higher levels of investment, Mr. Wilson added. 

“It is tough to come from Japan and do business in Covington, Ga., or Gainesville, Ga. Or to come from Korea and open a facility in Commerce. It is not easy to navigate, but knowing that you’ve got an office in Seoul that has been there for 40 years, and a relationship with the state government, that the state of Georgia is going to be able to support you, gives you the backbone that you need, the confidence that you need, in order to make that jump.” 

Next Generation Manufacturing’s annual event this year had a significant international focus from both an inbound and outbound perspective, with an initial panel featuring Ecker Materials, earTuff and ProgenaCare, Georgia-made products that are becoming “global game-changers” as they open markets around the world. 

Later in the program, Joel Feldman, president and CEO of Sugar Bowl Bakery shared the origin story of the company, which was founded by Vietnam War refugees in California and now operates a facility in Georgia. 

Learn more about Next Generation Manufacturing at www.nextgenerationmfg.org.