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Seguin will soon be home to a steel tube factory to supply local semiconductor manufacturers, thanks to the efforts of a regional partnership of economic development organizations.

Japan-based Maruichi Stainless Tube Co.’s subsidiary in Texas expects to begin construction on its Seguin manufacturing facility in early 2023, and to begin operations in early 2024. An estimated 106 new jobs will be created in the plant’s first two years.

Maruichi produces stainless steel pipes and tubes for use in a variety of industries, but this plant will focus on supplying semiconductor manufacturers.

Semiconductor manufacturing facilities are multiplying across the state.

Samsung is building a semiconductor plant in Taylor, outside of Austin, and Texas Instruments is working on its own outside of Dallas. In San Antonio, Tower Semiconductor was last year considering an expansion to its local facilities.

“There’s a huge supply chain ecosystem that goes into these facilities,” said Josh Schneuker, executive director of the Seguin Economic Development Corporation (SEDC).

Local manufacturers last year said the semiconductor industry would see expansion if the CHIPS Act passed, which it did in late July. The law creates grant programs, incentives, research centers and more initiatives aimed at supercharging semiconductor manufacturing in the United States.

“This just opens so many opportunities for us here,” said Sarah Sanchez, an executive with Greater:SATX who leads its corporate location services. “We’re going to see a lot manufacturers and suppliers look at our state and our region.”

Sanchez said the Maruichi deal represents Greater:SATX’s first “regional win.”

Greater:SATX formalized partnerships with economic development groups across the broader South Texas region last year, and in the process renamed itself from the San Antonio Economic Development Foundation. The organization now pitches the broader region as a whole.

It learned that Maruichi was looking for a site for a steel tube plant from its Japan-based consultant. Sanchez said Greater:SATX has cultivated relationships in that country for decades.

Greater:SATX submitted a proposal to Maruichi on behalf of the entire region, and subsequently arranged for the company to visit — a trip that also saw the Japanese representatives sample the area’s barbecue.

Once the company made its interest in Seguin clear, the SEDC took charge. Schneuker said the SEDC began working on the deal in late June. “This is probably the fastest project we’ve ever worked on,” he said.

Incentives were also a part of the deal. The SEDC will give Maruichi over $1 million in cash grants to be parceled out as the company meets performance benchmarks related to its investments, timeline and payroll. The deal was approved by Seguin’s city council on Tuesday.

Maruichi officials have said they expect to invest $75 million in the site.

In a prepared statement, Maruichi president Takashi Onishi cited Seguin’s “strategic location” and access to workforce as key reasons for building the plant there, in addition to the support it has enjoyed from the city.

Performance-based cash grants aren’t the only tool SEDC used to attract the Japanese company. It was also able to offer the land that the company is currently in the process of buying. The SEDC is selling the 33-acre site to the company for around $4 million, though the final price is to be determined. The roughly $1 million grant was calculated based on this anticipated sale price.

The SEDC proactively buys land to use as a business recruitment tool. Much of the surrounding area to the future Maruichi factory, called Rio Nogales Industrial Park, was previously owned by the SEDC. The site is situated just south of Interstate 10.

“We leverage land as a component of incentives to bring companies in,” Schneuker said. “When we make deals like this, we can take the proceeds and re-invest it into other areas, like buying more land or additional infrastructure.”

Waylon Cunningham writes about business and technology. Contact him at waylon@sareport.org. More by Waylon Cunningham