India pipe firm putting plant, HQ at LR Port
BY LAURA STEVENS ARKANSAS DEMOCRAT-GAZETTE
An India-based pipe manufacturer announced Friday that it will build a $100 million facility, creating about 300 jobs and establishing its North and South American headquarters at the Little Rock Port. Man Industries (India) Limited, a pipe manufacturer based in Bombay, plans to start production at the 162-acre site in early 2009, said Ramesh Mansukhani, chairman. “I hope the great message for the world, particularly the developing-country world, is still the U.S.A. having the great potential if you bring the plant,” he said during the announcement. This is the fifth announcement for the Little Rock Port since last summer, including a $100 million steel-pipe plant by Welspun-Gujarat Stahl Rohren, also of Bombay, which will employ 300. Denmark-based LM Glasfiber Group recently broke ground on a $150 million windmill blade manufacturing facility to eventually employ 1,000 people. Sage V Foods announced a $20 million rice plant employing about 100. Boyd Metals announced a groundbreaking for the port that should employ 50. The Man Industries manufacturing facility will employ 250 at a starting salary of a little under $12 per hour and will have a yearly production capability of 300,000 tons of helical submerged arc welded pipes, which are used primarily by the petroleum industry.
“Since this is a very high-tech manufacturing facility here we need a lot of quality people,” Mansukhani said. The headquarters will employ 40-50 people with salary ranges of $50,000 to $100,000 per year, he said. Originally, Little Rock was last on his list of possible sites, which included Texas, Louisiana, Mississippi and Alabama, Mansukhani said. Infrastructure, location, people and incentives played an equal role in convincing the company otherwise during its six-month search for a location, he said. “It’s a mix of a list of things to come here,” he said, specifically citing the “warm” welcome from the people of Arkansas. They had decided on Texas, he said. “Then we changed our minds,” he said, at least in part because of the government’s response. Little Rock Mayor Mark Stodola said the company received about $9.5 million in local infrastructure incentives, which included wastewater, utilities, waterlines and roadways. The state gave $3.5 million from its quick-action closing fund, and the company may be eligible for sales tax refunds on building materials and machinery, income tax credits based on job creation and payroll for five years, and a cash rebate equal to 3.9 percent of the payroll. During the announcement, Gov. Mike Beebe said, “It wasn’t the incentives. There were other communities vying for this that could offer a lot more.” Instead, “it’s the people ... it’s the warm welcome,” Beebe said. “That is the ultimate sales point.” The jobs, along with others, will help reverse Arkansas’ manufacturing jobs decline, the governor said. “Arkansas has not given up, and America should not give up on manufacturing,” Beebe said. According to the U.S. Bureau of Labor Statistics, 185,000 people in Arkansas were employed in the manufacturing industry as of January, down 4 percent from the same time a year earlier and falling from a peak of about 247,400 jobs in February 1995. The United States had 17.3 million workers in the manufacturing sector in February of 1995, compared with 13.7 million in January of this year, according to the bureau. One success brings more success, he said. “They talk about it with their colleagues and even their competitors and it causes a chain reaction,” Beebe said. With the Indian pipe companies, the Danish windmill factory and others, Arkansas has seen a recent increase in foreign investments — part of a national trend during the past 20 years, according to Karl P. Sauvant, executive director for the Columbia Program on International Investment at Columbia University. “We estimate that last year, foreign direct investment flows were approximately $1.7 trillion dollars, with the U.S. being actually the largest host country, meaning attracting most of this investment.” The weakening dollar could be playing some role in the recent Arkansas announcements, he said. “The fact that the dollar is becoming cheaper — considerably cheaper especially vis-a-vis the yen and the euro — of course, can have an influence in terms of the timing of decisions to locate in the United States, because it becomes cheaper to acquire the U.S. assets,” Sauvant said. However, that decision would still have to fit into the overall corporate strategy, he said. One new trend is gaining investment from emerging markets, such as China, Russia, Brazil and India, which has really started only in the past five to 10 years, he said. “Most foreign investment in the past has come from developed countries and also has gone to developed countries,” Sauvant said. It’s important for investment promotional agencies, such as the Arkansas Economic Development Commission, to take advantage of this trend, he said. Rajesh Chokhani, general manager of Welspun’s new Little Rock site, said his manufacturing facilities should be completed in time to start production by the end of the year, although the site has already started connecting pipes sent in from India. The two companies are competitors in India, he said, and “we will be competing definitely with them in the United States.” Chokhani conducted the search for a U.S. location for his company and said his experience was very similar to that of Man Industries. He said there are four or five factors — including port and railroad accessibility — that companies usually look at. “And above that, the top of it is the people of Little Rock” and the economic development team, he said. “This is a really, really magnificent team to work with which always makes your life so easy.” He visited Little Rock and met with about 20 people in one day, which allowed him to “find out all of the information a person needs to put up a project,” he said. Man Industries has a manufacturing facility in Gujarat, India, and in Madya Pradesh, India, and offices in the United Kingdom and the United Arab Emirates. Mansukhani said there is an impression in some developing countries, specifically in Asia, that the United States is not as welcoming to manufacturers. There’s a misperception of too many environmental and labor laws, he said. “After coming here, meeting the people, my impression is totally changed,” he said. Arkansas Democrat-Gazette/BENJAMIN KRAIN Gov. Mike Beebe visits with Ashok Balwani (left) and Ramesh Mansukhani of Man Industries on Friday in Little Rock.
Arkansas Democrat-Gazette/BENJAMIN KRAIN Man Industries Chairman Ramesh Mansukhani (from left) and President Ashok Balwani sit beside Little Rock Mayor Mark Stodola before announcing on Friday plans for a plant at the Little Rock Port.
