1 Next spring, spinning wheels will hum again in Lancaster County, South Carolina.
2 Keer, a textile company headquartered two hours southwest of Shanghai, China, is building yarn manufacturing lines in Lancaster, bringing more than 500 jobs.
3 The Carolinas were once the epicenter of the U.S. textile industry, but since the late 1990s, thousands of jobs were lost when emerging markets joined the game, touting cheaper materials and labor.
4 Carolinas textile jobs went to China, Brazil and Vietnam, among other places.
5 Now, in an ironic turn of events, Chinese companies are looking to manufacture in the United States, lured by lower costs of energy, cotton and land, and wary of rising labor costs in China.
6 Wally Wang, deputy general manager at Keer America, believes more Chinese textile companies and other manufacturers will follow Keer to the United States.
7 That would be welcomed in Lancaster County, where the pain of lost textile jobs still resonates.
8 Carolyn Summers worked for Springs Industries in Lancaster for 42 years before being laid off in 2005 when she was 63.
9 Her daughter, who worked for Springs as a bedding products designer, lost her job two years later.
10 “They opened the door wider for more imports to come into the country,” Summers said.
11 “We got flooded with a lot more cheaper textiles than we were able to produce.” She remembers leaving the factory “in total shock” the day she heard the news.
12 Springs Mills in Lancaster once employed close to 20,000 people, but in 2007, the last South Carolina textile factory closed.
13 Springs Global reports it employs fewer than 450 in four South Carolina locations that handle warehouse, distribution and services.
14 Lancaster County lost 11,000 textile jobs from 1995 to 2007.
15 The greater region lost about 26,000 jobs at textile mills in the past 20 years, according to Federal Reserve data.
16 Since the factories closed, Summers said, “we haven’t had the luxury of textile here.
17 We didn’t think that’d ever come back.”  ## $218 Million Investment  Gravel crunched beneath the tires of construction equipment in early August as about 100 workers finished the exterior of Keer’s 230,000-square-foot factory.
18 The 10-month construction project is set to finish in December.
19 At least 140 employees will begin working at the site starting in spring.
20 Most will make yarn on 32 production lines.
21 China’s market share in the global textile industry had rocketed in the past two decades, but lately, Chinese textile companies have been stressed by competition within its borders and by its rising costs of labor, power and land.
22 Keer decided to relocate part of its yarn production line to Lancaster - a $218 million investment.
23 While the first plant operates, construction workers will lay the foundation for a second factory to the south of it.
24 The construction will take less than 18 months.
25 After that, Keer intends to build two more factories, bringing its total space to more than 1 million square feet and 500 jobs.
26 SC Ready, a workforce training program in South Carolina, is helping Keer recruit and train local electricians, technicians and fabric sales representatives.
27 One third of the program applicants are former textile workers who want to get back to the industry.
28 By starting production in the United States, Keer believes it has blazed a trail that other Chinese textile companies will follow.
29 In a Chinese idiom, it’s “the first one who dares to eat the crab” — meaning many will follow after a “first.”  ## Going Where Cotton Is  Nearly 200 years ago, cotton brought textile mills to the Carolinas, and it’s cotton that will bring them back.
30 “Cotton price is the biggest challenge to our profit” in China, Wang said.
31 Cheaper cotton in the U.S. is a major draw.
32 In the past three years, the Chinese government has stockpiled cotton to boost prices, subsidizing disadvantaged local growers in the market.
33 Officials set a cap, as well, when textile companies want to import foreign cotton.
34 Chinese cotton is priced at about $2,889 per ton, while American cotton is almost one-third cheaper, priced at about $2,006 per ton.
35 Keer’s first South Carolina factory will consume 30,000 tons of cotton per year and produce 28,000 tons of yarn, Wang estimated.
36 “The Chinese textile industry has been undergoing great changes and restructuring,” said Yingjiao Xu, associate professor at the College of Textiles at N.C. State University.
37 She said Chinese textile companies are looking to start manufacturing in other parts of China and other countries to save on overhead expenses.
38 The cost to manufacture in China has risen in the past few years.
39 Feeling the competition intensify, Keer, whose assets exceeded $325 million in 2010, looked toward the Carolinas, after ruling out Vietnam, India and Pakistan as potential destinations.
40 Keer’s yarn production had been using American cotton for years; now it simply moved closer to be able to use more.
41 Wang counted the list of benefits Keer can enjoy in South Carolina.
42 “It is a state built on manufacturing; its workforce is used to the 24/7 schedule; it has the super low labor union member rate; its government has a lot of benefiting policies; it has a variety of manufacturing industries in the region; its electricity supply is cheap and stable.”  Wang added, “Except for human labor, all other production factors are cheaper in the U.S.”  Now, Keer’s factory will have Carolina-grown cotton coming in through its north gate.
43 The south gate faces Charleston, where a large portion of finished yarn products will be shipped back to China, a center of apparel manufacturing.
44 ## Recruitment Efforts  The Charlotte Chamber and South Carolina Department of Commerce had both talked for months with Keer before the company decided to set up operations in South Carolina.
45 John Ling, a China native who has worked for the South Carolina Department of Commerce for almost 15 years, has been based in Shanghai since 2005.
46 Ling first met Keer CEO Zhu Shanqing in March 2012.
47 The North Carolina Department of Commerce has had an office in Hong Kong for more than 20 years, and opened a Shanghai office in 2009.
48 The China staff focuses on boosting North Carolina companies’ exports to the Chinese market as well as company recruitment.
49 The Charlotte Chamber started to focus on its Chinese recruitment efforts in 2007 by adding a Mandarin-speaking recruiter.
50 Keer announced in December it would place its plant in South Carolina.
51 It also has an office in uptown Charlotte that houses financial and executive staff.
52 South Carolina offered a $4 million grant to recruit the company.
53 Lancaster County provided $7.7 million in bond support that will be paid by property taxes generated from Keer’s operation.
54 “We are very aggressive on the incentive side, if it’s the right company with the right fit like Keer,” said Keith Tunnell, president of the Lancaster County Economic Development Corp.
55 While Lancaster County is branding itself as the “U.S.
56 textile technology corridor,” Tunnell said they are also seeking opportunities in the general manufacturing sector.
57 The county has four recruiting projects going on in Asia at the moment.
58 ## China Still “The World Factory”  To be sure, China retains its competitive advantage in many areas of textile manufacturing, including labor-intensive apparel production, which benefits from low labor costs, according to Professor Xu.
59 The manufacture of yarn and fabrics, however, is more automated — giving U.S. sites an upper hand because of lower-cost energy.
60 Keer took the lead in approaching the South Carolina Department of Commerce, which surprised Ling, who at first doubted a Chinese textile company would even think about going to the United States.
61 “The cost difference between the two countries has certainly been narrowed greatly in recent years,” said Ling.
62 A turning point came in 2010, when the Chinese government introduced a series of bank loan and financing benefits for private enterprises to invest abroad.
63 Previously, the Department of Commerce worked on just three to five Chinese investment projects every year, but now, there are 20 to 25 Chinese companies visiting South Carolina to evaluate investment opportunities every year, according to Ling.
64 In North Carolina, direct investment from Chinese companies has totaled more than $178 million since 2010.
65 Last year, Lenovo, the Chinese computer maker with an executive headquarters in Morrisville, opened a manufacturing facility in Guilford County, and China Tobacco set up its American headquarters in Cary.
66 Doug Woodward, economics professor at the University of South Carolina, described the incoming Chinese companies’ investment as “small tiptoes into the U.S. for these big companies.” But “it’s just the beginning,” he believes.
67 Wang, now based in an office in uptown Charlotte, is coordinating resources across the two hemispheres.
68 He said Chinese investment in the United States “was like water drops, but now there’s a little stream flowing.”

Next spring , spinning wheels will hum again in Lancaster County , South Carolina .
again
Why did the spinning wheels stop humming?