Keer Group plans to double capacity of its yarn spinning facility in Lancaster

Chinese textile company Keer Group is planning investment of $65 million to double the capacity of its yarn-spinning facility in Lancaster County, South Carolina, and introducing incentive schemes to curb the mill’s high turnover rate.

The company’s first 230,000 square foot manufacturing facility outside of China, which started shipping cotton yarn in February, representing an initial $218 million investment and plans to create 501 jobs by 2018. The factory currently employs 120 people, but company chairman Zhu Shan Qing recently revealed to China Real Time that he’s had trouble keeping key roles filled with experienced employees.

In 2013, Keer Group had invested $218 million to move part of its yarn-spinning factory from Hangzhou to South Carolina, as China was getting too expensive. The cost of labor and energy was rising; Beijing keeps cotton prices artificially high to support local farmers; and land in Hangzhou, where Keer is based, was too expensive to expand. Meanwhile, wages in some parts of the U.S. were low enough for the move to make sense.

However, few local workers have experience of textiles manufacturing. For those that have, the technology has changed to rely much more heavily on advanced machinery. Unlike in China, Mr. Zhu says he’s had trouble filling certain key roles with experienced employees.

The center of South Carolina’s once-thriving textile industry, Lancaster County (which lost 11,000 textile jobs to foreign competition between 1995 and 2007) lured the Chinese company in late 2013 with lower cotton prices, proximity to the Port of Charleston and a “capable and ready workforce.”

But skilled labor has since proven to be limited and unreliable. Keer began working with ReadySC last year, South Carolina’s workforce training and development program that comprises all 16 of the state’s technical colleges, but Qing has said that despite receiving new job applications every day, some employees are “not serious” about their positions. To that end, the company will increase hourly wages for each year of employment in the hopes of cultivating expertise.

Twenty Chinese companies, including recycled polyester products manufacturer JN Fibers Inc., have invested $669 million in South Carolina since 2000 and employ a total of 3,253, according to the state’s Commerce Department. Keith Tunnell, president of Lancaster County Economic Development Corp., is in talks with four other Chinese companies interested in moving to U.S.