NCW Business/Wenatchee Business Journal | Wenatchee, WA USA

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11/1/2011 12:40:00 PM
Chinese paper carton manufacturer moves to Wenatchee

A new company is coming to town from the other side of the world, and it's a big one.

The Port of Chelan County announced, Oct. 31, that it has signed a 5-year lease with the Chinese company Kaite Group Co, Ltd. (pronounced "cat"), a multi-national company that specializes in paper and energy production. The company plans to install equipment to manufacture biodegradable paper cartons for the egg and food industry at a 38,000-square-foot property in Wenatchee, which is owned by the port on Olds Station Road.

"What we wanted to do was expand into the United States market, but not having to make (the products) in Asia," said Pascal Chevalier, a spokesperson for the company. "So we decided to come to the United States to make the U.S. goods for a U.S. consumer, and all made by U.S. workers, to benefit the local economy and to create an image of our company as a United States company."

Chevalier said they were currently in the process of shipping machines for five production lines and that he hoped to have them installed by January, and to be in full production mode by February or March. The company plans to hire 30 employees in the short term, with an additional 20 to come. Chevalier said the company will be investing $6-7 million to get the facility up and running and that the first five lines will be able to produce 100 million units of egg cartons per year.

"We are investing large capital as you can see, so we don't see ourselves moving anywhere else and we can only expand from here," he said.

Chevalier said the company intends to add another 20 lines down the road and will possibly need to expand into adjacent properties at some point. It's the third U.S. location for the Kaite Group. The other two locations are import and export warehouses and are located in Southern California. The company also has 11 factories worldwide and two thermonuclear power plants which deliver power to Northeast China.

Wenatchee may seem like an unlikely location for a company with such a large footprint, but Chevalier said the city was uniquely situated for their needs.

"We did our research and discovered the fact that cheap hydro power is an essential variable to our cost analysis," he said. "And being between Spokane and Seattle, we can also secure good amounts of recycled paper."

Chevalier said Wenatchee was also a good location geographically for supplying the west coast. The Kaite Group was also looking at locating the facility in other parts of Washington as well, including Moses Lake and Olympia but Chevalier said what won out was the assistance they received from the port.

"A key factor for us to be there wasn't so much the economic as much as it was the people that we were working with from the economic development council and everybody else on that team and their affiliates, that we felt this is the community that we want to be in," he said.

Mark Urdahl, executive director for the Port of Chelan County, said the deal had been in the works for at least 6 months and that it would be a boon for the local economies. Rent alone for the 38,000-square-foot space is $18,666 per month, and Urdahl said it was probably the largest available industrial space in the valley.

"At a time when manufacturing jobs are hard to come by, it's good for the county plus it's good for the state," Urdahl said. "It's a new company into the state of Washington too so that's a good thing."

Related Stories:
• Egg carton company plans expansion
• Egg carton maker gets cracking

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