THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Thursday, January 18, 1996 TAG: 9601180418
SECTION: FRONT PAGE: A1 EDITION: FINAL
SOURCE: BY MYLENE MANGALINDAN AND MAC DANIEL, STAFF WRITERS
LENGTH: Long : 114 lines
The string of new businesses coming to Hampton Roads continued Wednesday when the YUPO Corp., a subsidiary to the world's largest maker of synthetic paper, announced that it will build a $100 million manufacturing plant in Chesapeake.
The 160,000-square-foot plant, to be located in the Greenbrier Commerce Park, will initially employ 100 people. Plans call for as many as four expansions, for an investment of up to $400 million over several years and the creation of 300 to 400 more jobs, company and city officials said.
YUPO Corp., which paid $2 million for the land, will begin building its plant this June and expects to complete it in early 1998, said YUPO Corp. President Toshiaki Hida.
The plant will manufacture products such as baggage tags, bar code labels and recording paper, primarily for the U.S. market and also for Canada and South America, company officials said.
The plant, to be located on 40 acres off Executive Boulevard at Corporate Lane, already has city-installed sewer and water service. The plant site also has direct access to rail, which brings in the raw material used to make the synthetic paper.
This latest economic development announcement ranks as one of the largest initial capital investments by a company recently locating facilities in this region.
Donald Goldberg, the city's economic development director, who has been talking with the company for the past two years, said bagging the YUPO Corp. was probably the second-largest investment in the city's history. Commonwealth Atlantic Limited Partnership, a power supplier to Virginia Power, invested $150 million when it agreed to settle in Chesapeake, he said.
Chesapeake city officials expect at least $500,000 in annual revenue from the plant from real estate and machinery and tool taxes. In addition, economists say that a dollar from a manufacturer multiplies seven times in a community. By comparison, a retail dollar multiplies two or three times.
Company officials said they would pay ``competitive'' wages. The average manufacturing wage in this area is about $14 an hour, according to data from the Virginia Employment Commission.
``The truth is not how much money you make,'' Goldberg said. ``It's the turn of the money.''
Gov. George Allen gave the city of Chesapeake a check for $200,000 from his Opportunity Virginia fund, a ``deal closer'' to help new companies relocating to Virginia with on-site improvements. The city offered no incentives to the company, according to Goldberg and Chesapeake Mayor William E. Ward.
YUPO Corp., a wholly owned U.S. subsidiary of the Oji-Yuka Synthetic Paper Co. Ltd., is the Tokyo-based company's first U.S. manufacturing plant and its first facility outside Japan. As the world's largest maker of synthetic paper, Oji-Yuka earns $150 million in annual revenues, which translates into $15 billion in Japanese yen, Hida said.
The Chesapeake plant will produce 10,000 tons of synthetic paper product called YUPO each year. Made from the same synthetic materials that compose plastic, YUPO is used primarily for pressure-sensitive labels for oil and chemical drums. It's also used for thermal printing for airline baggage tags, bar code labels, recording paper for diagnostic machines and commercial printing.
Other products made from YUPO include shopping and gift bags, packing labels, banners, signs, ballots, lamination sheets, books and magazines.
About 45 percent of the Oji-Yuka's current product is sold in markets outside of Japan, said Oji-Yuka President Masabiko Tanabe.
``Because the U.S. is the world's largest paper market, we saw a definite advantage to locating our new plant in the U.S.,'' said Tanabe, who was in Chesapeake Wednesday.
There were several keys to the company locating here, Tanabe said: Chesapeake's easy access to huge consumer markets in the North and Southeast, ample supply of quality labor and the overall quality of life in Hampton Roads.
Company officials expect sales revenue between $60 million and $70 million in the plant's initial stages. They also expect about 70 percent of the jobs at the plant to involve manufacturing and light assembly work.
Chesapeake was chosen over cities up and down the eastern seaboard, including ones in Florida, Georgia and North Carolina, Hida said. The company's president said Chesapeake's main advantage was its proximity to the Mitsubishi Chemical America Inc. plant, located next to the proposed synthetic paper site. Mitsubishi, the world's largest chemical manufacturer, is one of Oji-Yuka's parent companies.
``As far as the city's concerned, it's creating some important jobs in our city at a time when we need job creation,'' said Goldberg. ``This comes at a time when the city is growing and we definitely need the tax dollars that will be generated off of this.''
Chesapeake is facing some fiscally tough times in the next five years as its record-setting growth begins to plateau. With a recent decrease in city revenue and an increase in the city's borrowing for capital projects, city officials are concerned that they may be overextending themselves. City officials are also concerned that Chesapeake's bond rating may be downgraded if they are unable to better control spending.
Now, with the finalization of a deal with the YUPO Corp., the city is breathing a little easier. ILLUSTRATION: VP GRAPHIC
TOP CAPITAL INVESTMENTS
Companies making biggest investments in Hampton Roads.
SOURCE: Foward Hampton Roads
[For a copy of the graphic, see microfilm for this date.]
VP MAP
by CNB