BMW makes S.C. foreign trade zones among busiest

Upstate-made BMWs prepare to be exported last year from the State Ports Authority’s Columbus Street Terminal in Charleston.

A pair of foreign trade zones administered by the State Ports Authority were among the nation’s busiest in 2014, with Greer-based automaker BMW and automotive suppliers accounting for 93 percent of all goods passing through the duty-free areas, according to a federal report released Wednesday.

South Carolina maintained its ranking as the top state for exports outside of the oil and petroleum products category, with BMW reporting between $5 billion and $7.5 billion in vehicle exports from a zone in the Upstate, known as FTZ-38.

The federal Foreign Trade Zones Board allows companies to report financial figures within a range rather than specific amounts for the group’s annual report to Congress.

The SPA’s FTZ-21 coastal trade zone, off Interstate 26 in Dorchester County, recorded between $5 billion and $10 billion in exports split between 20 companies. AGFA Materials, which makes imaging systems for the health care industry, led the way with exports totaling between $75 million and $100 million.

All told, the S.C. zones reported combined merchandise received and exports totaling between $25 billion and $50 billion in 2014. That compares with $25.4 billion a year earlier, according to statistics provided by the SPA.

Businesses that operate within the specially designated trade zones do not have to pay duty and certain fees on products they import until those products are moved, possibly months later, out of the zone and into the U.S. market. If the products — car parts, for example — are moved directly from the Port of Charleston to an FTZ and then transported directly from the zone for export, no duty can be owed.

TBC Corp., for example, pays no duty on the 30,000 to 40,000 imported tires that roll daily through its 1.1 million-square-foot distribution center in FTZ-21 until those tires are sent to retailers.

“Operating a distribution center in a Foreign Trade Zone has been an extremely positive experience for TBC Corp.,” James Markey, the company’s vice president for logistics, told The Post and Courier. “In addition to enabling TBC to improve service to our customers, it has afforded us the opportunity to re-evaluate our existing procedures and security measures to confirm that we are implementing best practices and continuing to adhere to protocol.”

The zone off I-26 primarily is a warehouse/distribution center and was among the nation’s busiest for that category, ranking No. 2 for exports and No. 6 for merchandise received. The Upstate zone was ranked No. 8 in the nation for merchandise received and No. 10 for exports.

Nationally, the value of exports from FTZs set a record at $99.2 billion in 2014 — a 300 percent increase from five years ago. Merchandise received totaled $288.3 billion, accounting for 12.1 percent of all U.S. goods imported.

FTZ employment also set a record with 420,000 jobs, representing a 7.7 percent increase over 2013 — far outpacing the overall U.S. employment growth of 1.9 percent.

South Carolina’s zones employed between 20,000 and 21,000 workers, eighth-highest in the nation according to Wednesday’s report.

The report “confirms that the program continues to be a vital component of America’s trade policy,” said Daniel Griswold, president of the National Association of Foreign-Trade Zones. “The competitive advantage for companies operating in an FTZ has enabled them to boost their exports and employment to record levels, continuing their strong contribution to America’s economic recovery.”

Reach David Wren at 937-5550 or on Twitter at @David_Wren_