Airport Reports Increase in Foreign Trade Zone (FTZ) Activity & Partners; Openings Still Available for Global Trade Conference
MEDIA RELEASE
From the Greater Rockford Airport Authority
For Immediate Release: May 7, 2008
For more Information Contact:
Bob O’Brien, Executive Director
815-969-4444; bob@flyrfd.com
Rockford, IL- The Chicago Rockford International Airport (RFD) is the Grantee (administrator) of Foreign Trade Zone (FTZ) #176. Four years ago, RFD reported zero dollars in foreign merchandise moving through the Foreign Trade Zone. Two years ago, three sites/subzones moved $67 million of product. The Airport forecast for last year double that activity with the addition of a large subzone, Nissan Forklift NA in Marengo. The actual results for FTZ FY07 (Oct 1, 2006 - Sept 30, 2007) far exceeded the Airport’s expectations with four FTZ activated partners moving $225 million in products through the Zone. Activity is defined as foreign products moving through sites or subzones of the FTZ. By utilizing a FTZ, companies can defer, reduce or eliminate duties (excise taxes) imposed by the Customs and Border Protection on foreign goods until they enter into the United States. In addition, there are various other benefits that cumulatively may result in huge savings for companies. This activity can help to retain and create jobs amidst a faltering U.S. economy.
“FTZ status has helped us by eliminating and delaying duty payments of foreign-supplied materials used in finishing forklifts and parts distribution. Import costs are reduced. Therefore, forklift production continues to occur domestically rather than overseas like many of our competitors. Employment levels have been maintained here,” said Larry Stephen, Nissan Forklift Senior Manager of Corporate Procurement & Logistics.
Stephen said that Nissan experienced a 5% sales increase for 2007. “That was due in part to our competitiveness in the market which was partly driven by FTZ savings.”
RFD Adds FTZ Partner
In addition to reporting an increase in FTZ activity, RFD also announced today that the local Rockford manufacturing firm, Cellusuede has begun the process to apply for Subzone status. Cellusuede is currently in the early stages of the application for approval and activation.
“Cellusuede is excited about the potential benefits of the FTZ, not only from the import side but from the export side as well. Over the past decade, Cellusuede has seen a dramatic shift in our sourcing of raw materials from 50% domestic to almost 95% outside the U.S. With that shift, we have seen an increase in not only transportation costs but tariffs, duties, etc. Being a part of the FTZ will allow us to reduce, delay or even better eliminate those tariff/duty costs which will give Cellusuede a significant competitive advantage over its competitors in the marketplace. The cash flow savings from the duty deferral alone will pay for the cost of the project in the first two years and that doesn’t include the inverted duties and duty elimination at all. Being able to put these savings back into the company and its employee owners will be very beneficial,” said Cellusuede CFO Steve Hoeppner.
“When the business community grasps the benefits of Zone status for this local FTZ pioneer, we believe there will be many new partners in the next few years,” said FTZ Specialist Marge Bevers.
FTZ #176 Reorganization Nearing Completion
In addition to reporting an increase in FTZ activity and new members, RFD has also been working on reorganizing RFD’s FTZ #176 to enhance the marketability of the program enabling current and prospective users to obtain maximum competitive advantage. The Airport anticipates that their FTZ reorganization will be approved and published in the May Federal Register Notice with the period for public comment ending in July. After additional reviews, they anticipate final approval from the FTZ Board in October.
“We look forward to assisting one or more of the new partners to activate and begin operations shortly thereafter,” said RFD Operations & Facilities Deputy Director Franz Olson. “The use of the FTZ program by American and foreign-based companies has surged because it has proven to be a unique tool for retaining jobs and businesses here while aggressively competing in a world market,” he continued.
Global Trade Conference: Openings Still Available
With the announcement of RFD’s increase in FTZ activity, partners, and reorganization activity, area businesses and organizations considering or involved in importing and exporting activities can learn more about gaining a competitive advantage by attending the “GO GLOBAL OR GET LEFT BEHIND!” Seminar on May 13 & 14, 2008 at the Northern Illinois University campus on East State Street, Rockford, IL. RFD has worked with an organizing committee from the Rockford Area Economic Development Council, the U.S. Department of Commerce Export Assistance Center-Rockford, and SupplyCore to create this two-day conference during Global Trade Month. Day #1 is designed for companies just starting or considering export operations; Day #2, is aimed at experienced importers and exporters looking for a competitive advantage. Keynote speakers include: the Honorable Neil Hartigan, Chair and CEO of the World Trade Center, Illinois and Tommy Berry, President of PointTrade Services and former president of the National Association of Foreign-Trade Zones. Other sponsors include the Greater Beloit Chamber of Commerce, the Illinois Dept of Commerce and Economic Opportunity, Northern Illinois University, PointTrade Services, the Rockford Chamber of Commerce, and U.S. Bank. Space is limited; to reserve a spot at this workshop visit www.rockfordchamber.com/GoGlobal.
For additional information, contact Marge Bevers at 815-969-4427.