Suzhou Industrial Park Tianyuan Garment Co., the company spending $20 million to open a garment plant in Little Rock late next year, made the first move on Arkansas in December 2015.
Mike Preston, director of the Arkansas Economic Development Commission, said company Chairman Tang Xinhong heard about Arkansas from news coverage of Gov. Asa Hutchinson’s November 2015 trip to China. The state’s work to bring a $1.3 billion Shandong Sun Paper Industry pulp mill to Clark County was well publicized there.
Tang learned that Arkansas is home to several garment manufacturers and requested more information from the AEDC.
For the Tianyuan deal, Arkansas competed with Michigan, North Carolina, South Carolina and Georgia, according to an AEDC statement.
The statement also said that — before approaching Arkansas — Tang had been talking with Adidas, the company’s main customer, about locating a manufacturing facility in the United States to produce apparel for the North American market.
AEDC officials said Adidas has distribution centers in New York and Southern California, so Tang was looking for a location that was centrally located and had an existing apparel industry, a good workforce and a low cost of doing business. Arkansas apparently fit that bill.
The AEDC also provided a list of existing apparel manufacturers, which included numerous companies that do embroidering. Others listed, with their products, were:
- American Stichco Inc. of Mountain Home (hunting vests).
- Arkansas Lighthouse for the Blind of Little Rock (T-shirts for the military, men’s and boys’ outerwear).
- Breaux Manufacturing Co. Inc. of Bentonville (men’s and boys’ athletic sportswear).
- Eudora Garment Corp. Superior Uniform Group Inc. of Eudora (men’s uniform shorts and outerwear, nurse uniforms, hospital gowns, miscellaneous uniforms).
- Fort Smith Manufacturing Cintas Corp. of Fort Smith (uniform shirts).
- Hanesbrands Inc. of Clarksville (hosiery).
- KT Manufacturing Co. Inc. of Ash Flat (safety and protective clothing).
- Robinson Enterprises of Walnut Ridge (dresses and formal gowns).
- School Apparel Inc. of Star City (men’s and boys’ pants, shorts, knitted sweaters and shirts; women’s and girls’ knitted sweaters, pants and shorts; knitted caps).
- Shann’s Engineered Apparel Manufacturing Inc. of Hamburg (men’s and boys’ clothing, athletic and sportswear.
The chairman, finding that Arkansas had a garment industry, contacted the state agency through its office in Shanghai. Preston said that office opened six or seven years ago.
The director of the Chinese office, Lindsay Liu, told Tang about utilities, taxes, labor costs and potential buildings.
Officials said Tang visited Arkansas in March, July and October to look at buildings, meet with accountants and lawyers and learn more about the state. He sent a team of his managers in May and September to narrow the list of buildings the agency had provided.
The AEDC said Tang chose Arkansas because he understood that the logistics for supplying products to both coasts, combined with the low cost of doing business and a supportive, business-friendly government, were ideal for his planned expansion.
“Chairman Tang is a very open, straightforward, uncomplicated businessman, which made the process smooth for everyone involved,” according to the agency’s statement.
Tianyuan already employs 2,600 in five locations in China, and those produce 10 million articles of clothing a year.
The expansion will bring the total employee count to 3,000.
Tianyuan is also bringing highly automated equipment to the new Arkansas plant.
According to the AEDC’s statement, the July meeting between Tang, Hutchinson and Preston was especially significant because officials could tell then that Tang felt comfortable with the support of the governor and agency for his project.
The chairman also expressed concern then over understanding cultural differences correctly so that he could best adapt his business to succeed here, the AEDC said.
The second significant date in this deal was Oct. 17 — the day the governor, Tang, Preston and the deputy mayor of Suzhou signed an economic development agreement in Suzhou, China.
In attendance were Consul General Hanscom Smith for the U.S. Consulate in Shanghai and Xu Yingxin, vice president of the China National Textile & Apparel Council, along with other government officials from Suzhou.
Although the site of the new plant has not been announced yet, Preston said the company has identified a few sites and is focused on one. “Hopefully, we can get that site to work for them, but we’re just trying to get the legal details on that to make that happen,” he told Arkansas Business.
Preston added that the next steps, in addition to buying a building, include obtaining necessary permits, getting staffed and purchasing equipment.
Building relationships is important for every project, he said, but it has been especially crucial for projects like the Tianyuan deal.