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IDA, Chinese firm ‘back to square one’ on plant deal

POSTED: January 16, 2014 7:48 p.m.

The Effingham Industrial Development Authority is hitting the restart button on a deal with a Chinese conglomerate.


IDA CEO John Henry said Xingfa, a Chinese firm that had planned to open its U.S. headquarters and a phosphates manufacturing facility in Effingham, has decided it cannot go ahead with the plan currently. Xingfa executives sent the IDA a letter stating they could not hold to the Dec. 31, 2013, deadline established to execute a memorandum of agreement between the company and the IDA.


“We’re back to square one after 18 months,” Henry said. “The project is still out there.”


The company’s board was scheduled to meet in October, but that was delayed until December. Henry said Xingfa board members reached a conclusion at that meeting that they could not adhere to the deadline set for a MOU with the IDA.


But the deal may not be dead, Henry said Thursday morning. The company wants to revisit the issue after the Chinese New Year and may return to Effingham for a visit in February or March.


“They have long-term plans for international growth,” Henry said. “We still may talk to them about a U.S. headquarters. I will be a very gracious host, just as they were in China.”


Henry and IDA Chairman Dennis Webb visited China last May and went again in August as the company and Gov. Nathan Deal made an announcement of the company’s intention to open a plant and a headquarters in Effingham County.


Xingfa was expected to create 50 jobs and also purchase the entire 83-acre Governor Treutlen tract at the Effingham Industrial Park. Of that land, about 30 acres was going to be devoted to an American company that would move in, and that firm was going to take 60 percent of Xingfa’s finished products to produce additional material.


“It is not difficult to see our partners will have a decisive impact for our projects and decisions,” Xingfa officials said in their letter to the IDA and the state Department of Economic Development.


But when their partner couldn’t come through with its end of the deal, Xingfa board members did not believe they could continue to discuss the project, the letter continued.


The memorandum of understanding, which had never received a vote by the IDA members and hadn’t gone into effect, is null and void, Henry added.


In the meantime, he has shown the Governor Treutlen site to other interested companies and has put the site back on the market. Henry said a visit last week with another company — with greater capital investment and greater job creation potential — was exciting.


“And I don’t say that often about a site visit,” he added.


The company is looking for 10 acres and would be an excellent fit for the tract, Henry continued. That also would leave room for additional prospects.


“That’s an optimal site,” Henry said. “In this area, that site stands out.”

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