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For the last 11 years, Leonard Scott Huff, one of Innovate’s owners, has lived and worked in China as his company expanded from engineering services into contract manufacturing, reincorporating in China in 2004 and eventually opening four factories in the country, plus an engineering site. Huff told Plastics Technology that three years ago his company began considering expanding production into the U.S. based on rising costs in China, incentives to locate business in America, and customer interest in U.S. manufactured goods.
“China is no longer cheap,” Huff said. “China is very capable, but it’s getting very competitive. We see operating in Tennessee as a good prospect for the future.” In the U.S., the company will feature injection molding, injection stretch blow molding, and extrusion blow molding capabilities, with tooling supplied from China. Initially, much of the U.S. production will serve customers in the reusable hydration market, for items like highly decorated sideline water jugs for sporting events.
In addition to investing $4.7 million in upgrades and renovations to the building it is currently leasing with plans to eventually purchase, Innovate anticipates eventually creating 50 new jobs in Knox County. Stephanie Trost, office manager for Innovate’s new Knoxville site, said production is scheduled to start up in mid-September, with 12 U.S. employees and several Innovate China employees who will be on hand initially to train the new workers before heading back to China as they’re displaced by U.S. workers.
“Three years ago we realized that lines where coming back to the U.S.,” Huff said, “and we started the initial phase of this project to invest back in the states.” Huff noted that the cost of employing workers in China has risen substantially, as have shipping and energy costs, with Tennessee’s power rates being significantly lower for Innovate.
Innovate is not the only company moving production back to the states. In a release, Tennessee Department of Economic and Community Development Commissioner Randy Boyd said that in the past twelve months, the state has added nearly 1300 jobs from China-based projects alone.