Wabash County officials discuss mission details

September 6th, 2018

By Joseph Slacian | The Paper of Wabash County

The planned trade mission involving Wabash County officials to Japan and China has been in the development stage for about 18 months.

That was the word from Keith Gillenwater, executive director of Grow Wabash County, and Wabash Mayor Scott Long. The two sat down with The Paper of Wabash County to discuss the trade mission, why it was taking place and other details.

“Initially we were contacted about going to China to see about setting up a sister city,” Long said. “I thought it was a good idea.”

The idea was broached by Dennis Kelley, president of Pacific World Trade, and Indianapolis-based group which provides a variety of products and services to Asian, European and U.S. markets.

Kelley has set up several sister city relationships for communities around Indiana, Gillenwater noted. His experience in the country stretches back more than 40 years, having set up Chinese market opportunities for Cummins Engine Co. in the 1970s.

“Since that time, he’s been basically working in China,” Gillenwater said. “We’ve had some conversations about direct investment in this community.”

Foreign investment in Wabash County is nothing new, Gillenwater pointed out.

“When you look at it,” he said, “we’ve got companies with foreign roots with Oji Intertech being a Japanese company, Kalenborn Abresist with a German parent company, Wabash Castings now has a Canadian parent company.”

In addition, the former Wabash Magnetics building now houses a Malaysian furniture distributor.

“So, we know there’s an opportunity for directing some foreign direct investment here,” Gillenwater continued. “We know Indiana has been very successful in that.”

Long and Gillenwater met over breakfast with Wabash City Schools Superintendent Jason Callahan, and with Bob Mason, Vice President and International Sales Manager at The Ford Meter Box Co.

Mason, Gillenwater said, also has a strong knowledge of the Japanese market, having run the state’s Japan office during the administration of Gov. Robert Orr. It was through Mason, he continued, that contact was made with Kelley.

“While Dennis was working with the state running the Chinese side under Gov. Orr, Bob was in Asia running the Japanese side. They go back several years and he made that introduction.

“We started talking about what the possibilities and a year or a year and a half later, we’ve got a trip on the book coming up,” Gillenwater said.

The mission will take place in November and is expected to last about two weeks, splitting time between Japan and China.

Visit to Japan

A Japanese-owned company, Oji Intertech, has a plant in North Manchester. Therefore, Gillenwater believes, the visit to Japan is something which is needed.

“One of the most important things you can do as a community, if you have a Japanese investment, is the expectation that you make that trip to the home office at some point, to the headquarters,” he said. “We make headquarter calls all the time to companies that aren’t based here because you want that company, when they’re making the decision that potentially could result in scaling back a company you have here … you want them to be able to put a face with a name to something because it’s harder to make that decision.
“It’s a lot easier when you don’t know who it is. It’s impersonal, and it’s just a number on the page. We make those calls a lot.”

Gillenwater speaks from experience on that matter. As LaGrange County’s economic developer, he paid a visit in 2014 to the headquarters of Nishikawa Standard. The firm had plants in Topeka and in Bremen, and it was looking to scale back operations.

“They were looking to possibly scaling back or looking for someplace more populous than Topeka, Indiana,” he said. “We went and made contact with them and had that visit with them.”

In the end, part of the Bremen operation was relocated to Topeka, and the firm opened a new facility in Fort Wayne.

“It just happened we were the ones who visited them and told them how much we valued their investment and that type of thing,” he said.

However, that’s not the case with Oji. The firm is going through an expansion project at its North Manchester facility, and is adding more than 30 jobs to the plant.

“We also know from our visits there, because they’ve been expanding what their technological capabilities are, and we’ve got to make sure that we can best position the North Manchester facility to be able to take that new technology as it rolls into the United States,” Gillenwater said.

Rex Sereno, the plant manager at the North Manchester facility, will be joining the group on its trip to Japan. Also slated to go beside Gillenwater and Long are Mason, Callahan, Sarah Rodriguez of the Northeast Indiana Regional Partnership, and Lisa Ford.

Honeywell Foundation Executive Director Tod Minnich is replacing Rodriguez on the China leg of the trip.

Japan’s presence in U.S.

In preparation for the trip, officials have been doing market research to find companies that might be right for expansion. Indiana, Gillenwater noted, has the most Japanese-owned firms of any of the 50 states. Of the 92 counties, about 75 have a Japanese-owned firm located there.

“That’s obviously driven by the automotive industry with Suburu, Honda and Toyota all having manufacturing plants here,” he said. “We’re the only state in the country that has three Japanese auto manufacturers that have major investments like that.”

The nation has a track record of having success of locating businesses here, he believes, particularly in Indiana.

“They like the business climate we have here,” Gillenwater said. “They like the workforce we have here. They like the skill sets.”

So, to prepare for the trip, officials have been going through such things as Dunn & Bradstreet listings looking for companies they think could possibly expand in Wabash County.

“What kind of products would make sense to expand for production in the United States,” he said, discussing criteria used. “And then, out of those things, what kind of things that make sense for production in the United States could Wabash county support?

“We’ve looked at the food processing industry. One of the things we found out in the recession was some things are not recession proof. Some industries are not recession proof. Some industries thrived during the recession. One of those things being food because people still have to eat, regardless.”

The group will meet with Oji officials one entire day during the visit. The remaining days in Japan will be spent meeting with officials from other firms, Long said. The delegation will also meet with representatives from the Japanese External Trade Office.

“We hope to meet with another 12 companies before leaving,” Gillenwater said.

The China visit

The visit to China is a two-part visit. One is to attempt to create a sister-city designation there, while the other is to attempt to lure new businesses to locate facilities here. An offshoot of the visit would be a chance to create an educational exchange program between the sister city – expected to be Linhai City – and Wabash City Schools.

Gillenwater said he has had conversations with Callahan about looking for educational exchanges.

Among the things the exchange would do, Gillenwater said, is provide a rich, cultural experience and build up their academics and programming.

Sister city programs also “are an important thing for Chinese communities if you have Chinese companies who want to start making investments in the United States, or if you want to try to open up that market,” Gillenwater said. China has one of the fastest growing economies in the world.

“The Chinese economy has been one of the fastest growing economies in my lifetime,” Gillenwater said. “You see them growing in disposable income … You see their GDP growing and all those kinds of things. You see relationships getting cemented between the U.S. and China companies on business standpoints every day.”

There are two ways to look at developing a relationship with China, he believes.

“You can be on the side where you have this growing economy where you don’t have a relationship and you don’t see if there’s opportunities for your companies to sell into that, when they’re buying and building all the time now,” Gillenwater said. “Or you can try to create that relationship.

“To me it seems like a practical matter where you say, ‘Is there a way we can try to cement a relationship there to where we can set up a formal relationship and potentially create opportunities for our companies to sell there?’ The other side of that for investment coming the other way – at the end of the day you have a lot of wealth in China that is looking to reinvest in things that are safe, and the U.S. is still the safest investment for foreign individuals.”

Human rights

China has been accused of violating basic human rights, and issue government leaders there and in other countries often times disagree. Some in the public here have questioned why the local contingent would want to venture to China, in light of its human rights record.

“I don’t necessarily agree with the way the Chinese people, or any country, may mistreat their workers,” Long said. “But maybe the opportunity for us to partner with them and show them how we treat people in the United States will rub off on them, and maybe it will get better.

“The sister city relationship is kind of a courtship. It’s not an overnight thing. We expect a return visit from officials of Linhai City either late this fall or early next spring. With that return visit for them to Wabash, maybe that will open their eyes, too.”

Trip expenses

The trip is expected to cost about $5,000 per person, including airfare, lodging and meals.

“We’re not flying first class,” Long quipped.

Gillenwater added, “We’re flying coach. We’ve got economy tickets for all legs of the flight. We’re staying in travelers’ hotels. We know we’ll have some costs for meals and those kinds of things.”

Each individual is paying his or her own way on the trip.

“I’ve reached out to NIPSCO, Duke and some local businesses who are going to support me on the trip with financial donations to offset the cost,” Long said. “I’m hoping to get all my trip paid for.”

Gillenwater did ask Wabash County Commissioners for funds to help with the trip. That money, he said will help pay for such things as translators in China. The delegation also will present gifts to the various officials visited.

In addition, Gillenwater said he received a grant from Duke Energy to help pay for materials to be distributed on the trip translated into the native language.

Success rate

Are trade mission trips such as this successful?

“My limited experience in going to visit Nishakawa absolutely was,” Gillenwater said. “Indiana has had a lot of success in bringing them in.”

He points to Shelbyville, which has had great success in bringing in Japanese business.

“That occurred because they’ve had a consistent strategy for several years of making those visits to those companies and those type of things,” he said. “Japanese industries tend to cluster together because they see a community that can be supportive of a Japanese investment, so I think there’s an opportunity to play the card we already have here.”

But, Gillenwater and Long admit that the trips are not always successful.

“There’s also areas, I’m sure, that haven’t been successful,” Gillenwater said. “That’s one of the things we’ve been talking about with our consultant. You can’t call this a one and done and expected it’s going to pay dividends.

“Asian companies, particularly, are about building relationship. You built the personal relationship first and then business comes afterword. … But the important thing is you’ve got to be consistent. You can’t just do it one time and expect it’s going to be (successful).”

Judging the trip

How long will it take before officials know if this trip is successful? It all depends.

“I think we may see some success at the end of this, just simply by establishing the contacts,” Long said. “The state just signed a memorandum with the Icche province in Japan. We’re going to be one of the first groups from Indiana setting foot on land after that was announced.

“I’m hoping we’re the first one through the door … We can present to them what we have to offer here and what we have available for them to locate here.”

Gillenwater said everyone must maintain “reasonable expectations.”

“I would love to say we packed a suitcase full of yen that we got while we’re over there and we’re bringing it home and opening four new companies setting up investment,” he said. “That’s not going to happen.

“What will be successful is if we’ve gotten good contacts, gotten good leads out of it to things we can continue to follow up on. Every project we work, whether it’s something from a foreign company or it’s something like the 10X Engineering Manufacturing here, it’s a relationship you build. It’s something you massage back and forth. You have 10 starts and stops before you actually get here. … It’s not going to happen overnight. But everything we’re going to do is deliberate.”

Perhaps Long summed it up best.

“It takes 18 months to sometimes get to the table,” he said. “But every journey starts with the first step.”

Categories Regional Leadership