By allowing ads to appear on this site, you support the local businesses who, in turn, support great journalism.
Prospective buyer eyes purchase of EFACEC
Transformer plant expected to stay in Effingham
Placeholder Image

Effingham Industrial Development Authority members have approved amending its memorandum of understanding with EFACEC and approving a transfer and assumption to a new company.

EFACEC, a Portuguese conglomerate that opened a transformer manufacturing plant in Effingham County, is in negotiations with another company for its purchase. Steve Nelson, representing Caraveles, said the company wishing to buy EFACEC has 40 years’ experience in making transformers. He also said the company has a commitment to the Effingham County plant.

“We think we can use the facility and make it a long-term asset for the community,” he said.

Caraveles has been set up specifically to acquire EFACEC’s assets, according to Nelson.

The name of the new company, IDA CEO John Henry said, is a trade secret. Henry added he has had several meetings with the new company.

Refining the language in the MOU, signed in 2007, will help EFACEC tidy up some of its housekeeping, Henry said.

“Our performance and accountability agreements typically match the state’s with their percentages and calculations. However, in the MOU, there are some discrepancies,” he said.

Passages of the MOU read that the company will meet job or investment goals, and other passages stated it will meet job and investment goals.

Under the initial MOU, the company was expected to meet a $40 million capital investment, and it currently has a $120 million investment in its Effingham facility. Though it has not met its job goals, the company has far exceeded its planned investment target, Henry said. The MOU didn’t contain a performance calculation from the IDA, but the company has topped its initial expected investment of $100 million.

Its workforce was projected to reach 232 in 2010, then go up to 420 in 2013 and top out at 670 when the plant reached full operational capacity in 2017, according to original estimates.

Ground was broken on the 55-acre site in September 2008 and operations began in October 2009. The first transformer was delivered in early 2010. EFACEC received a $2.95 million EDGE grant from the state in June 2009. EDGE funds are used to provide financial assistance to eligible applicants being considered as a relocation or expansion site and that are competing with another state for location of a project.