How a Small Town Won Ohio’s Biggest Foreign Investment
“With a deadline like that, you almost have to cut everything out of your schedule to do it,” Hill recalled in an interview more than a year after receiving that email. “It’s part of the business we’re in.”
The company is no longer anonymous. Semcorp, a Shanghai, China-based producer of electric vehicle battery components, announced plans this month to invest $916 million in a manufacturing complex in Sidney.
With 1,200 workers expected by 2025, the plant will manufacture release films for lithium-ion batteries. Semcorp, the trading name of Yunnan Energy New Material Co., says it is the world’s largest manufacturer of such films, a key component of these batteries.
When the company called, Sidney was ready. His land in a local business park — the Sidney Industrial Park at West Millcreek and Kuther Road — had been “authenticated” by JobsOhio’s SiteOhio program in 2021.
This authentication meant the field was recognized as “one of Ohio’s elite sites,” ready to use and certified “at the highest level,” Hill said. The due diligence had been completed, water, sewer, electric and gas capacity was ready, and there was plenty of land to start.
Semcorp will purchase approximately 250 acres, but the initial phase will not require all of that acreage.
“This will leave enough ground for future expansions,” Hill said.
Today, JobsOhio has only 20 sites authenticated at this level, said Andrew Bowsher, Sidney City Manager.
“Ours was just at the sweet spot to have all the components together,” Bowsher said.
While everyone involved was confident, there probably wasn’t a magic moment when those representing Sidney and Ohio knew they had landed Semcorp, which at the time was also considering sites in New York and Texas.
Bowsher and Hill said four or five other potential users were also exploring the Sidney site, and these companies had their own unique needs, site visits, questions and schedules.
Bowsher called the process “fuzzy.”
“I think probably for all of us, I think it was almost too good to be true,” he said. “You’re not trying to focus on those numbers” of possible new jobs.
Many companies in the electric vehicle sector are now looking for sites to start production as soon as possible. Some watched Sidney, Hill and Bowsher said.
“We were confident that one of these deals was going to work, that’s for sure,” Hill said.
But there was a feeling Semcorp was going to “cross the line first”, he said.
A family business
“Ohio wasn’t on anyone’s radar when we started this,” James Shih, vice president of global projects for Semcorp Group, told the Dayton Daily News.
Semcorp was founded in the late 1990s by two brothers, Paul Lee and Tony Li. They immigrated to the United States in the late 1980s, settling in rural Port Lavaca, Texas in a factory of plastic. Lee is Shih’s stepfather.
After returning to China, the brothers’ first battery separator film production site opened in Shanghai in 2010.
The lithium-ion battery release film, one of the four main components of all lithium-ion batteries, will be produced at Semcorp’s Sidney plant.
To greatly simplify, in lithium-ion batteries, ions move from one electrode to another electrode. The film sits between the electrodes, where lithium ions gather, preventing a short circuit and possible fires, Shih said.
The film is basically a thin plastic material.
Customer demand brought Semcorp to Ohio. Its customers want the company to localize supply chains, especially in light of COVID-19 complications, tariffs and overseas supply issues.
Tariffs alone add more than 30% to Semcorp’s costs.
“It’s a big deal,” Shih said. “That’s why, from a financial point of view, it makes sense to build a factory outside of China, so that we don’t have to worry about tariffs.”
Company executives discussed a US factory for several years, and site selection began in earnest in the spring of 2021. That’s when Semcorp engaged with a consultant, starting with a list of eight states. .
At first, this consultant was in the driver’s seat, Shih said.
The company’s first priorities were readiness in spades, with utility hookups and ready-to-go capability. Also a concern: the availability of labor, with a large population of workers able to travel to the plant, as well as a history and appreciation of manufacturing.
“It actually narrowed down our choices considerably,” Shih said.
In Ohio, business leaders were encouraged to see that there were “generations” of people working in manufacturing or supporting the field.
In an interview, Shih dwelt on his 2021 visit to the Upper Valley Career Center in Piqua.
“We were very impressed with all the workshops, all the machines they have and how they encouraged kids who might want to work with their hands or were interested in business professions,” Shih said. “It was very, very encouraging.
“It’s not just something Ohio talks about. They actually do.
Jason Haak, superintendent of the Upper Valley Career Center, said Semcorp actually requested two visits.
The fact that the company requested a second visit, “it said that was definitely something that caught their eye.”
Semcorp officials seemed interested in where the center’s students live, whether the school educates students from Miami and Shelby counties.
They were particularly interested in the centre’s ability to adapt training to the needs of each company.
“I think it shows that we’re emphasizing the skilled trades in this area,” Haak said.
Company executives also spoke with Jeff Liu, a former Fuyao Glass America executive who had overseen Fuyao’s Moraine plant since the fall of 2016. Semcorp introduced Liu earlier this month as chief executive. from its Sidney plant.
Semcorp executives were familiar with fellow Chinese manufacturer Fuyao and its history, but they wanted to get a better idea of how a large Chinese company operated in that region.
Groundbreaking for the Sidney plant will take place in late summer or early fall this year.
Feng shui and local incentives
An online meeting with company officials took place early in the process with in-person visits from Semcorp officials in June and December.
“That last visit, I would say, was key,” Bowsher said.
The geography of the site seemed to work right away.
“They really loved the pond that was in the middle of the site,” Bowsher said. “I think they really saw feng shui, and I think they saw it as great equipment, not only for the site but also for their employees.”
Feng shui is the ancient Chinese practice of arranging components or parts to achieve harmony and balance.
Other factors were at work, including state and local incentives. In 2026, when plant operations are expected to be fully online, Semcorp is expected to get a tax credit of up to $1.5 million, Bowsher said.
The company will also receive a 75% tax abatement through the City of Sidney Enterprise Zone for 15 years, and the Ohio Tax Credit Authority in March approved tax credits worth an estimated $22. .7 million.
Semcorp’s annual payroll in the first phase of the project is expected to reach $74 million.
An incentive agreement has been endorsed by Sidney City Schools, Upper Valley Career Center and Sidney City Council. The estimated tax abatement for the business over 15 years is $31,633,875, according to the Sidney Daily News.
The Sidney School District will likely receive about $430,000 a year for 15 years from the project, Bowsher said.
The company will also benefit from a discount for large water users.