Firm may have warehouse here

Chinese company considers office, limited manufacturing facility

Saturday, August 11, 2007

By JOHN R. PULLIAM

The Register-Mail

GALESBURG - The senior engineer of a Chinese steel company located in Galesburg's sister city indicated Friday a strong interest in locating a warehouse here, with the possibility of limited manufacturing. Customer service also would be handled here.

Kong Qing Gang of Anhui Masteel Holly Industry Co. Ltd. of Ma'anshan City was one of three men from the company who were given tours of a number of area companies this past week by the Galesburg Regional Economic Development Association. Masteel Holly is a 5-year-old company that manufactures axles and automatic transmissions and employs about 2,000 people in China.

"We plan to have an office in the U.S. We plan to have an office in Galesburg because what you have done for us and because you are our sister city," Gang said through a translator. However, those plans have not yet been finalized.

The steel company's parent company, Masteel, is owned by the Chinese government and employes 100,000 people. Companies such as Masteel Holly, which is China's second largest steel company, are still very young.

All of Gang's comments were translated by Xin Yang, known as Cissy, president of Pacific Century LLC, and Jay Fei, director of engineering, Pacific Century. Gang was accompanied by Zhou Jin Song, deputy board member of Masteel Holly, and Wu Mingming, an engineer for the steel company.

"Twenty years ago, all the companies were owned by the government," Yang said. "They still own the largest companies."

Gang said his company is interested in Galesburg because, in addition to a central location to tap into the large U.S. market, the people here have been very hospitable, from city government officials to GREDA president Greg Mangieri and Linda Utsinger, GREDA's vice president of business development.

"The people here are very honest and very easy to deal with," Gang said. "In China, we know the Midwest is very important industrially. It very much matches our company."

He likes the transportation advantages, particularly Galesburg as a hub on the BNSF Railway. Gang did not say how many people would be employed if Masteel Holly locates here but said the company's facilities would grow "depending on the market."

Gang said the next step is to research U.S. competition, followed by a meeting of the company's shareholders.

"They plan to do this very quickly," Yang said.

Gang said they may return to Galesburg in two or three months.

"They hope GREDA will help them do research about Galesburg and the U.S.," Yang said.

Gang said his company can learn much in the U.S., because of this country's technology. He expressed confidence in the U.S. market.

"They want to expand their manufacturing in the U.S. and move a distribution or assembly operation to Galesburg," Fei said, after Gang finished speaking at one point.

"Most of the manufacturing, they will do in China," Yang said. "Maybe here they will do the finishing work. They need a warehouse."

Fei said the delegation planned to visit Logistics Park-Galesburg Friday, as well as the former Maytag and Butler Manufacturing facilities.

Gang said two different plans are under consideration.

"One plan is we will open our own company in the U.S. and we will have our own brand," he said. "Another plan we're interested in doing is buying an existing American company."

During the week, Masteel Holly representatives and GREDA officials met with CenterPoint Properties and Mercantile Partners Inc., the two companies marketing Logistics Park-Galesburg. Also included were tours of John Deere in Moline, Alexis Fire Equipment, Caterpillar in Peoria and G and D and SC2 in Morton.

"I think it's been time that was really productive," Mangieri said. "There seems to be a genuine interest in Galesburg."

In addition to the return visit by Masteel Holly officials, a delegation from Galesburg plans to return to Ma'anshan City in October to formally sign the sister city agreement, Mangieri said, "and meet again with the Masteel Holly people. I think it's very important to meet with them to continue the momentum."