A drive along the interstates and back roads of the Palmetto state highlights not only its changing landscape — from the highlands and Piedmont to maritime forest and salt marsh — but also its manageable size, revealing that South Carolina is as diverse as it is compact.

By Lydia Dishman
Contributing Writer

A drive along the interstates and back roads of the Palmetto state highlights not only its changing landscape — from the highlands and Piedmont to maritime forest and salt marsh — but also its manageable size, revealing that South Carolina is as diverse as it is compact.

The economic landscape is just as diverse. Tucked into these 30,000 square miles are a multitude of businesses that encompass both startups and well-established firms in virtually every industry sector. Among them are 637 foreign-affiliated companies, 455 of which are majority-owned, according to data provided by the S.C. Department of Commerce.

Doug Woodward, an economist at the University of South Carolina’s Moore School of Business, has studied the fluctuations of the local economic landscape for several decades. He says foreign investment in South Carolina is not a new fad; in fact, international chemical companies started arriving in the 1960s. Woodward says the Upstate is home to the largest concentration of German investors — he jokes that the Interstate 85 corridor there is called the autobahn — but says international investment has spread everywhere, including to smaller cities such as Camden, home to the Chinese manufacturer Haier Corp., and most recently to Orangeburg County, with Jafza International’s 1,300-acre free-trade zone.

Twenty-one percent of manufacturing jobs in South Carolina are supported by U.S. subsidiaries of foreign companies. The collective result of this investment puts South Carolina in an enviable position, especially during an economic downturn.

The draw
The weak dollar tops the list of reasons for foreign companies to locate operations in the United States. This is not new; the dollar has lost more than 30% of its value in the past several years against other major currencies.

But location also tops the list for South Carolina. From Columbia it is just about 650 miles to New York City or Miami. The S.C. Department of Commerce has found that, with the national population shifting to the South, “companies choosing South Carolina are closer to their markets and benefit from efficient truck and rail routes and top-quality port and airport operations. A South Carolina manufacturing or distribution site is within a day’s drive of half of the nation’s fastest-growing markets. South Carolina is also located within 1,000 miles of 35 states and roughly 75% of the total U.S. population.” These strategic advantages have been recognized by such businesses as BMW, Bosch and Michelin and recently captured the attention and dollars of a Middle Eastern company.

Jafza International managing director Chuck Heath spoke in the Charleston Regional Business Journal of his company’s decision to bring the Dubai logistics and distribution center to South Carolina. “I didn’t just wake up in the middle of the night and say, ‘Let’s go to Orangeburg,’” he said. “We had people on the ground, unbeknownst to anybody, canvassing the Southeast as a whole, and individual states specifically, looking at everything from demographic trends to the available work force to how business-friendly a state was to the number of multinational companies who were relocating or making new investments in the area.

“In the end, we came to equate South Carolina and Orangeburg with the conditions we had in Dubai when Jebel Ali was under development. The state has reliable power, sufficient labor and quality infrastructure. In fact, you’re already pretty close to the model we developed in Dubai.”

Kara Borie tells a similar story. “Companies are surprised to see the (relatively low) price of land and the availability and reliability of energy,” she says. Borie, a spokeswoman for the S.C. Commerce Department, says this is an incentive especially for those, like the Chinese, who are used to paying lower wages than Americans. “The cost of wages is offset by the price of land and energy,” Borie says.

Working it
Despite all the positives, some investors do get away. Last year, Toyota Motor Corp. picked Tupelo, Miss., as the place for its newest 2,000-worker plant, and Tennessee lured Volkswagen to Chattanooga, snagging a factory for the area.

Hal Johnson, executive director of the Upstate Alliance, recently returned from a trip to seven Chinese cities to explore opportunities for more Chinese businesses to locate in South Carolina. Johnson says describing the sheer size of office park and manufacturing facilities being constructed in China would be impossible. He believes South Carolina needs more “megasites” to entice larger developments.

Borie insists that plenty of acreage and spec buildings are available in practically every county in the state. She points to the agency’s Web site, which states, “The Department of Commerce can readily provide information about some 300 buildings and almost 400 sites.”