THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Saturday, May 18, 1996 TAG: 9605180290
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY MYLENE MANGALINDAN, STAFF WRITER
LENGTH: Medium: 65 lines
In a move that surprised even Chesapeake economic development officials, Gov. George F. Allen has secured a commitment from the president of Sumitomo Machinery for a $15 million expansion of its American subsidiary's Chesapeake plant.
Chesapeake economic development officials received a call from Tokyo late Thursday informing them about the deal the governor had brokered during a meeting with Sumitomo Machinery president Mitoshi Ozawa. The governor had called on Sumitomo and other Japanese companies during a 14-day trade mission to Japan, Hong Kong and Korea that is to conclude Friday.
The proposed expansion at the Sumitomo Machinery Corp. of America - its third - will create 130 jobs and nearly triple the plant's production capacity. Located in the Cavalier Industrial Park since 1988, the company manufactures power transmission parts that are shipped internationally.
City officials knew the company had considered buying more land, said Donald Z. Goldberg, Chesapeake's economic development director. It recently acquired an additional 33 acres in the industrial park from the city's industrial development authority.
``This is a plan that Sumitomo has had for some time,'' Goldberg said.
Sumitomo plans to spend $10 million for machinery and tools, and $5 million for the plant, Goldberg said.
The company will add 150,000 square feet of manufacturing space to its existing 250,000 square-foot plant. The expansion will boost the facility's production from 3,500 units per month to 10,000.
The state has offered to help train the new employees at a cost of about $550 per person, said Morgan Stewart, a spokesman at the Virginia Department of Economic Development.
In Chesapeake, another Japanese company celebrated the completion of an expansion Friday. Mitsubishi Chemical America opened its new $17 million toner plant in Greenbrier Commerce Park.
Construction of the 31,000-square-foot plant on property the company already owned began last fall, Goldberg said.
That facility will employ 35 new people. Since Mitsubishi also owns Verbatim, which makes floppy disks at its site in Battlefield Corporate Center, this facility will raise the company's total employment in Chesapeake to 650, said John Canfield, senior vice president of administration.
Mitsubishi is starting to build a $2 million product development center which will be attached to an existing building, he said.
Altogether, Allen's Sumitomo announcement concluded a successful week.
He finalized deals for a $17 million auto-parts facility in Botetourt County and a $6 million plant that will serve the IBM-Toshiba semiconductor facility in Manassas. Hans Gant, president of Forward Hampton Roads, and the secretary of commerce and trade, Robert T. Skunda, accompanied the governor on this trip, as did his wife, Susan Allen, who promoted tourism in the Old Dominion.
The Virginia contingent will return Friday. ILLUSTRATION: Color photo
Gov. George F. Allen brokered the expansion, the plant's third,
during a trade mission to Japan.
by CNB