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Dubai team envisions a new economy in Orangeburg
By Dan McCue
Staff Writer
With the Jebel Ali Free Zone in the emirate of Dubai, the principals involved in Jafza International created an epic logistics and distribution center on 35,000 barren desert acres.
That center of trade and commerce has since spun off nearly a dozen mini-cities on the vast empty land around it, cities dedicated to specific industries ranging from aeronautics to high tech, from textiles to maritime.
Now, according to Chuck Heath, the company's managing director, Jafza International hopes to do something just as transformative to 1,300 acres in Orangeburg County.
"My philosophy isn't to try to entice a Wal-Mart distribution center to move from its current location to my park. That does nothing for the regional economy," said Heath in his first on-the-record interview about Jafza International's planned $600 million investment in South Carolina.
"What we want to do is facilitate the increase of foreign investments and opportunities in the state, and Orangeburg specifically," he said. "Developing and creating a new economy, that's what we are about."
Heath, who said he was breaking his silence about the company's activities in order "to provide context" about its intentions, said about 6,500 international companies are currently operating in the Jebel Ali Free Zone in Dubai.
"My job, as we see here in South Carolina, is to bring new direct foreign investment to this region," Heath said. "We will make sure all 6,500 of the companies that have embraced Jebel Ali are aware that Jafza is applying the same vision and same principles here in Orangeburg."
Jafza International's decision to embrace Orangeburg came after seven months of analysis of several sites in the Southeast, Heath said.
"I didn't just wake up in the middle of the night and say, 'Let's go to Orangeburg,'" he said. "We had people on the ground, unbeknownst to anybody, canvassing the Southeast as a whole and individual states specifically, looking at everything from demographic trends to the available work force to how business-friendly a state was to the number of multinational companies who were relocating or making new investments in the area.
"In the end, we came to equate South Carolina and Orangeburg with the conditions we had in Dubai when Jebel Ali was under development—the state has reliable power, sufficient labor and quality infrastructure. In fact, you're already pretty close to the model we developed in Dubai.
Although Heath declined to discuss specifics of the land acquisition process or how quickly the land will be developed once Jafza International acquires the entire 1,300-acre site, sources in Orangeburg said Friday morning that negotiations on numerous parcels are moving quickly.
Asked about the 8,000 to 10,000 jobs that representatives of the company had previously suggested would be created in Orangeburg, Heath stood firm on those assertions.
"I've done my numbers, and these are the numbers we anticipate being created in Orangeburg and the surrounding area," he said, explaining that the figures include estimates for direct employment at the site, indirect employment inspired by Jafza International's activities in Orangeburg and employment by others that would be prompted by the logistics center’s presence.
Heath explained that he arrived at his job creation estimate by starting with the company’s experience at Jebel Ali and determined that it had created roughly 4.29 jobs per acre. Heath applied that number to the 1,300 acres in Orangeburg and arrived at an estimated 5,500 direct jobs in the logistics park.
"We then began to look at economic impact studies done in relation to Jebel Ali, and applied those findings at a suitable scale to Orangeburg, and believe we'll generate at least another 2,200 indirect jobs,” Heath said.
"In terms of induced jobs, we found that there was a 10 percent factor in terms of what happened at Jebel Ali. That's another 550 jobs," he said.
Heath used the phrase “induced jobs” to mean such service-related positions as bank tellers that would need to be filled to accommodate the influx of new workers.
Jafza International has also included a 2% factor for "other" employment indirectly created by its activities, an estimated net of another 165 jobs.
"So that's roughly 8,500 jobs, but that estimate has a lot of variables to it," Heath said. "That's the low end of the scale. However, if we find in developing the site that the site pulls in more light manufacturing than distribution centers or that there is a demand for office space in the area, that's going to rapidly accelerate the numbers because those are higher-density operations in terms of people on site than warehouses would be."
Jafza International isn't the only entity developing a commercial park in Orangeburg. According to Gregg Robinson, of the Orangeburg Economic Development Commission, several other smaller parks are in the works and Orangeburg and Dorchester counties are about to hire an engineer to determine where they can build a joint county park.
"The more the merrier," Heath said. "I think there's a good level of credibility that goes along with all that development, and I think it creates a greater awareness factor that (generates) additional opportunities.
"At the same time, I think all that competition is very healthy for us as a business. After all, it's human nature to get lackadaisical after awhile, to get a little lazy. We're strong believers in competition because it forces you to be on your toes."
Heath expects Jafza International's activities in Orangeburg not only to help draw new industries and investment to South Carolina, but also to touch off a boom in housing and commercial construction in the upper Lowcountry and the center of the state, he said.
"If you're bringing in all these people to work and providing jobs for people who have historically been underemployed, certainly other businesses and activities will develop," he said.
"But at the same time, we intend to work with local and state officials to ensure that any growth that occurs is controlled and sustainable. Any other alternative would only tax the infrastructure and the people living there and potentially diminish the quality of life there.
"We don't want that," Heath said. "Our credo is to be a good neighbor and we really do try to live by that."
Of critical importance to Jafza International’s development plans for Orangeburg is replacing the current configuration of the Interstate 95 and Interstate 26 interchange with a cloverleaf interchange, Heath said.
The current interchange doesn't provide direct access to the land being purchased. If the configuration were to remain the same, trucks and other vehicles entering and exiting the Jafza facility would be forced to use local roads for at least part of their transit.
Hours before Heath spoke to the Charleston Regional Business Journal, he had had meetings with commercial delegations from South Korea and India who want to increase their profile at Jebel Ali.
"Our future success is based on our major trading partners," Heath said. "Now, you're right, a tremendous amount of Indian imports come through East Coast ports, with fully 60% of those goods coming through the ports of Charleston and Savannah.
"The problem India has, its biggest risk, is that it has no real infrastructure. We're currently in the process of helping to rectify that by acquiring land to build six logistics zones and two industrial zones in India, and we intend to work very closely with Charleston and other ports in the Southeast to ensure they benefit from our network of connections.”
Those words were music to the ears of the head of the S.C. State Ports Authority.
"The ports authority welcomes Jafza's interest in our state and our port. We view their interest and investment as recognition of our future opportunities in international trade. Jafza is a very well respected and highly credible group, and we look forward to developing our relationship further," SPA President and CEO Bernard S. Groseclose Jr. said.
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