Irish execs scout Georgia for expansion opportunitites

Despite a challenging economic landscape and a global freeze of credit markets, Georgia is still on the mind of many foreign investors looking to plant roots in the United States.

This week, Atlanta-based Gaffey Group, an international trade consulting firm, hosted a group of executives from Northern Ireland and the Northern Ireland Chamber of Commerce looking for expansion opportunities in Georgia.

The state has long touted its infrastructure, air and ground transportation, lower costs, work force and universities as selling points to firms looking for a U.S. home base.

Those selling points helped in landing Kia Motors Corp.’s $1.2 billion auto plant in West Point, which is slated to begin production in late 2009. Those qualities were attractive to the executives from Northern Ireland, too, said Ann McGregor, the Northern Ireland Chamber’s chief executive, adding the five Irish firms represented had more than 90 meetings scheduled with potential business partners here.

But with the European Union in recession, the U.S. economy sliding, and banks worldwide reeling from the global crisis that’s severely restricting credit, is Georgia in for tough time investment-wise?

Not necessarily, say state economic development officials, trade experts and foreign trade representatives.

“Georgia’s economy is reflective of markets nationwide and worldwide, which makes the strategic efforts to drive jobs and tourism in Georgia all the more important,” said Kenneth C. Stewart, commissioner of the Georgia Department of Economic Development.

Even with the slowdown Georgia still has advantages, he said, and the state remains focused on select target industries — including the biosciences, agri-forestry, logistics and advanced manufacturing, he said.

“Companies both domestic and international are more cautious now; we’ve not seen a reduction of interest,” Stewart said. “They’re not deciding to not invest here, it’s a question of when.”

McGregor, the trade executive from Northern Ireland, said while financing might be difficult for smaller firms, the larger corporations have the credit to move forward with their expansion plans. Expansion is an imperative for firms in Northern Ireland, she said, because 63 percent of that region’s economy relies on the public sector and the international trade growth is critical to boosting private enterprise. That’s why the United States is so prized, she said.

But the economy is just one factor in the decision, said Tibor Besede?, assistant professor of economics who specializes in international trade issues at Georgia Tech.

For one thing, the United States remains the world’s largest economy and the value of the dollar has reversed its slide, appreciating about 20 percent since the summer, Besede? said.

“The more stable economies survive downturns and recessions a lot better than emerging economies,” he said. The dollar’s growing strength against the Euro, he said, “is a signal that investors consider the U.S. economy more robust than other economies.”

Energy costs also are a factor, he said. Though the per-barrel price of oil is around $60 now, it was just four months ago it was flirting with the $150-per-barrel mark.

Companies that are in expansion mode anyway might consider establishing a U.S. presence even if transportation costs go down as oil falls because they might see that as only being temporary, he said.

And should trade rules get more protectionist as the world’s leading nations look to shore up their own economies, multinational firms might take the plunge to avoid spikes in tariffs, he said.

Besides, most companies are looking at a three- to four-year-window so the current environment, while worrisome, isn’t likely to kill deals entirely.

It certainly hasn’t reduced interest. In fiscal year 2008, the state hosted 73 trade missions from 50 countries, according to Georgia Department of Economic Development statistics. That’s up from 9 trade missions from nine countries just three years earlier.

“The ones who talk about coming here, they haven’t changed their minds,” said Philippe Ardanaz, France’s consul general in Atlanta. “Just last month, three new French firms decided to come to Georgia.

“We are still with that trend and we don’t feel the impact so far. But it is a question we all ask.”