How a small town won Ohio’s biggest foreign investment
“With a deadline looming like that, you almost have to drop everything off your schedule in order to get it done,” Hill recalled in an interview more than a year after receiving that email. ”That’s part of the business we’re in.”
The company is anonymous no more. Semcorp, a Shanghai, China-based producer of electric vehicle battery components, announced plans this month to invest $916 million in a Sidney manufacturing complex.
With 1,200 workers expected by the year 2025, the facility will make separator film for lithium-ion batteries. Semcorp, the trade name of Yunnan Energy New Material Co., says it is the world’s largest maker of such film, a key component in those batteries.
When the company came calling, Sidney was ready. Its land in a local business park — the Sidney Industrial Park at West Millcreek and Kuther Road — had been “authenticated” through the JobsOhio’s SiteOhio program in 2021.
That authentication meant the land was recognized as “one of the elite sites in Ohio,” shovel-ready and certified “at the highest level,” Hill said. Due diligence had been completed, water, sewer, electric and gas capacity were ready, and there was plenty of land to boot.
Semcorp will purchase about 250 acres, but the initial phase will not require all that acreage.
“That will leave adequate land for future expansions,” Hill said.
Today, JobsOhio has just 20 sites authenticated at that level, said Andrew Bowsher, Sidney city manager.
“Ours just happened to be at the sweet spot of having all the components together,” Bowsher said.
Although all involved were confident, there was probably no single 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 prospective users were also exploring the Sidney site, and those companies had their own particular needs, site visits, questions and schedules.
Bowsher called the process “a blur.”
“I think probably for all of us, I think it was almost too good to be true,” he said. “You don’t try to focus on those numbers” of possible new jobs.
There are a number of companies in the electric vehicle sector today searching for sites to start production as soon as possible. Some have been looking at Sidney, Hill and Bowsher said.
“We were confident that one of those deals was going to land, for sure,” Hill said.
But there was a feeling that Semcorp was going to “cross the line first,” he said.
A family business
“Ohio was not on anyone’s radar when we started this,” James Shih, Semcorp group vice president of global projects, 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, at a plastics factory. Lee is Shih’s father-in-law.
After a return to China, the brothers’ first battery separator film production site opened in Shanghai in 2010.
Lithium ion battery separator film, one of four primary components in all lithium ion batteries, will be the product at Semcorp’s Sidney plant.
To oversimplify greatly, in lithium ion batteries, ions travel from one electrode to another electrode. The film sits between electrodes, where lithium ions congregate, preventing a short-circuit and possible fires, Shih said.
The film is essentially 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 challenges.
Tariffs alone add more than 30% to Semcorp’s costs.
“It’s a big problem,” Shih said. “That’s why from a financial perspective, it makes sense to build a plant outside of China, so we don’t have to deal with the tariffs.”
Company leaders have discussed an American plant for several years, and site selection started in earnest in the spring of 2021. That’s when Semcorp engaged with a consultant, starting with a list of eight states.
At first, that consultant was in the driver’s seat, Shih said.
The company’s first priorities were shovel-readiness, with utility hook-ups and capacity ready to go. Also a concern: Labor availability, with an ample population of workers able to commute to the plant, as well as a history of and appreciation for manufacturing.
“That actually narrowed down our choices quite a bit,” Shih said.
In Ohio, company leaders were encouraged to see that there were “generations” of people working in manufacturing or supporting the field.
In an interview, Shih dwelled on his 2021 visit to the Upper Valley Career Center in Piqua.
“We were very impressed by all the workshops, all the machinery they have and the way they encouraged kids who might want to work with their hands or who were interested in trade professions,” Shih said. “That was very, very encouraging.
“This is not just something Ohio talks about. They’re actually doing it.”
Jason Haak, superintendent at Upper Valley Career Center, said Semcorp actually asked for two visits.
The fact that the company sought a second visit, “that said that was definitely something that caught their eye.”
Semcorp officials seemed to be interested in where the center’s students live, the fact that the school educates students from Miami and Shelby counties.
They were especially interested in the center’s ability to tailor training to an individual company’s needs.
“I think it shows we have an emphasis on the skilled trades in this area,” Haak said.
Company leaders 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 the chief executive of its Sidney facility.
Semcorp leaders were familiar with fellow Chinese manufacturer Fuyao and its story, but they wanted to get a better feel for how a big Chinese company operated in this region.
The Sidney plant groundbreaking will happen in late summer or early fall this year.
Feng shui and local incentives
An online meeting with company officials happened early in the process with in-person visits by Semcorp officials in June and December.
“That final visit, I would say that was key,” Bowsher said.
Site geography 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 some feng shui, and I think they saw it as a great amenity, not only for the site but also for their employees.”
Feng shui is the ancient Chinese practice of arranging components or pieces 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 set to get a tax credit of up to $1.5 million, Bowsher said.
The company will also receive a 75% tax abatement through Sidney’s citywide enterprise zone for 15 years, and the Ohio Tax Credit Authority approved tax credits in March worth an estimated $22.7 million.
Semcorp’s annual payroll in the first phase of the project is expected to reach $74 million.
An incentives agreement has been approved by Sidney City Schools, Upper Valley Career Center and Sidney City Council. The estimated tax abatement for the company over 15 years is $31,633,875, according to the Sidney Daily News.
The Sidney school district will likely receive about $430,000 per year for 15 years from the project, Bowsher said.
The company will also receive a high water user discount.