Japanese sweets company to open plant in Orange County

Sep. 03, 2013 @ 09:16 PM

 A Japanese sweets company is planning to invest $48 million in a new plant in Orange County near Mebane, creating 90 jobs across three years.
Morinaga & Co. Ltd., founded in 1899 in Tokyo, makes milk caramel, chocolates, cookies, and items such as cocoa mix and frozen desserts, according to a news release from Gov. Pat McCrory’s office.
The company is planning to make a chewable fruit snack called Hi-Chew at the new plant near Mebane, said Steve Brantley, Orange County Economic Development director. The plant is expected to be the company’s first U.S. manufacturing site.
Morinaga has a U.S. sales subsidiary that launched in 2008, according to a release from Orange County Economic Development. The company started selling Hi-Chew on the West Coast and has expanded distribution..
To tap into growing demand for the product, the company decided to buy a factory site in North Carolina and open a manufacturing plant, according to the release. Production is expected to start at the new plant in mid-2015.
“It’s a transformative project for us, where we’ve historically not been a county considered to be in the game of business recruitment to achieve this success,” Brantley said.
The new facility will be in an economic development district on the western side of the county near the Alamance County line and Mebane’s Tanger Outlets.
The area is now largely undeveloped, Brantley said, as it currently lacks water and sewer system access. The land where the company is planning to build its 120,000-square-foot plant was also rezoned last year.
The site is across Interstate 40 from where companies such as foam manufacturer Armacell; mattress maker Kingsdown Inc., packaging company MeadWestvaco, or MWV; GE Energy Solutions, and AKG of America have existing operations, Brantley said.
While Brantley said the north side of the highway -- where those existing businesses have operations -- has easier access to Mebane’s water and sewer infrastructure, Morinaga’s facility will be on the south side.
The plan is for Orange County to extend water and sewer lines to allow the company to tap into Mebane’s infrastructure.
David Cheek, Mebane’s city manager, said an agreement was reached last year allowing for Mebane to take over and maintain those lines once they’re finished.
Officials are targeting the completion of the water and sewer connections before Morinaga’s facility is finished, Cheek said, adding that the company plans to start construction next spring, and to be up and running in 2015. Cheek also said officials eventually expect the property to be annexed into Mebane.
“The way Mebane’s policies work, if you are not in the city limits and we provide you water and sewer, then your water and sewer rates are double what (they would) normally be, so a lot of companies will just do the math, and see what works for them, whether they want to or not,” Cheek said.
The land where Morinaga is planning to build on is part of about 232 acres previously designated for rural residential or agriculture residential uses. Orange County’s leaders rezoned the land, which includes areas of the district where Morinaga is targeting opening the plant, in April of last year to allow for office or institutional development.
The land was in addition to an existing economic development district in that area. But Barry Jacobs, chairman of the Orange County  Board of Commissioners, said the newly zoned section is closer to Mebane and was “easier to mold to their specifics.”
“There’s not a subdivision you have to work around, there’s not people who are angry about what’s gone on in the past …. there are none of those kinds of infrastructure or pre-existing use problems in this particular area,” Jacobs said.
He said county officials are looking to be more aggressive about economic development, adding that he believes there aren’t enough jobs in the central and northern parts of the county.
“As the economy has gotten worse, and even as it’s started to recover, it’s clear that having a diversified tax base is essential to your long-term fiscal health,” he said. “Even though we haven’t raised taxes in five years, we want to be able to have the resources that we need, and encourage other industry here.”
The new jobs at Morinaga’s new plant are expected to be created across three years, paying an average of more than $38,000.
State leaders committed a performance-based grant of up to $264,000 to help bring the company here, according to the release from McCrory’s office. Companies receive no money up front and must meet certain job creation and investment performance targets.
Brantley said Morinaga officials visited Orange County 11 times in 19 months. Competition for the investment included Toronto; Portland, Ore.; Philadelphia, Atlanta, Richmond, and “probably a dozen North Carolina counties.”
“If you can be chosen by a major, world-class, foreign company, then I would like to think it means you’re doing some things right, and hopefully additional, similar, high-caliber companies will follow, and create those jobs for our residents, and  better jobs with benefits, and also help diversity the tax base…,” Brantley said.
The state incentive also requires matching incentive packages from local government. Incentive agreements with the Mebane and Orange County have not yet been approved, according to the release from the governor’s office.
Jacobs said he expects discussions of an incentive package will be taken up in a meeting later this month. He said the package could include money for a road to the property and a tax break for the first five years if the company meets certain hiring guidelines.
“They’re not a heavy water user which we think is important,” Jacobs said. “They are going to pay a living wage, they do provide benefits for employees -- all things that have been of importance to us in pursuing any kind of business.”