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Lee County secures U.S. Foreign-Trade Zone designation

Tupelo — Lee County manufacturers know that in today’s highly competitive global economic climate, every advantage counts. So does cooperation, which helped the Northeast Mississippi county secure its recent inclusion in the U.S. Foreign-Trade Zone program.

The approval, announced last week, expands the existing Vicksburg-Jackson Foreign-Trade Zone No. 158 into Lee County. Established in 1989, the Vicksburg-Jackson Foreign-Trade Zone includes seven general-purpose zone sites, totaling 5,500 acres within Vicksburg, Jackson, Senatobia and Greenville. The zone also has sub-zones of CMC in Corinth, Peavey Electronics in Meridian, Alliant Tech Systems in Iuka, Nissan North America in Canton and Ergon Refining in Vicksburg. With the addition of Lee County, the organization obtains a new name — the Greater Mississippi Foreign-Trade Zone — and becomes one of the largest trade zones in the U.S., including 5,800 acres of land in Lee County, 15 million square feet of existing manufacturing space and six million square feet of existing warehouse distribution space in addition to the acreage and space in the original Vicksburg-Jackson Foreign-Trade Zone.

Officials said cooperation was key to the effort, as the plan for Lee’s inclusion was developed through joint consultation between the Vicksburg-Jackson Foreign-Trade Zone board of directors, the Lee County Board of Supervisors and the Community Development Foundation of Tupelo/Lee County.

According to state and local officials, the trade zone will create competitive advantages for both existing and new industries.

“This new partnership with the Vicksburg and Jackson communities unites our efforts to encourage new international economic development growth in Mississippi,” said Community Development Foundation president and CEO David Rumbarger.

Several critical benefits are associated with U.S. Foreign-Trade Zone status and include:

• Relief from inverted federal tariffs

• Federal duty deferral

• No federal duty on re-exports

• Federal duty rate reduction or elimination on scrap

• Direct delivery

• Weekly entry

• Reduction in federal merchandising processing fees

• Reduction in personal property taxes

• No federal duties on labor, overhead and profit

Charles Duke, president of the Lee County Board of Supervisors, said that it is important to partake in initiatives that support existing industries because in the past 20 years, 78% of new manufacturing jobs in Lee County were created by existing industries.

“The Board of Supervisors knows we need to make public policy that helps our locally invested companies,” Duke stressed. “For this reason, we adopted the Lee County Plus Plan that supported the U.S. Foreign-Trade Zone project. This local economic development incentive policy will help these companies maintain their competitiveness.”

While the initiative will impact a host of industries, of particular note is the furniture industry. According to CDF Industry Division leader David Brevard, Northeast Mississippi is the major center for U.S.-based production of upholstered furniture and home furnishings.

“These products are under heavy competition from foreign-based producers and the benefits enjoyed within the U.S. Foreign-Trade Zone program will greatly improve the ability of our furniture industry to continue to compete internationally.”

The federal tariff rate system makes it difficult to compute average cost savings. As a result of the expansion, however, CDF officials stated that identified operating cost savings for Lee County companies could range from $50,000 to $500,000 per year. According to information provided by CDF, more than 30,000 imported containers with an estimated value of $5 billion are brought into Lee County every year. Lee County exported more than $100 million worth of goods last year, according to CDF data.

Local manufacturers — many of whom were present at the FTZ press conference — indicated that the designation would add another competitive advantage to the area.

“Historically, we’ve not been a big importer of raw materials or finished goods, but it’s become increasingly important,” said Tom Lynch, operations manager of Day-Brite/Capri/Omega, a light fixture manufacturer. Lynch added that the company has projects in place that will significantly increase import activity during the year.
CDF is planning to hold workshops in the coming months to train industries on how to benefit from the FTZ status. Officials said that they are gratified to see the process come to fruition after the application was filed with the U.S. Trade Zones Board last summer.

“Our successful business culture here in Lee County is based on the kind of cooperation and teamwork that is reflected in this Foreign-Trade Zone initiative,” said Brevard. “The Lee County Board of Supervisors are to be commended for their proactive efforts to help our local industry through their support for this Foreign-Trade Zone expansion application.”

Contact MBJ contributing writer Karen Kahler Holliday at mbj@msbusiness.com.

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