Japanese noodle maker Maruchan Inc., whose U.S. headquarters is in Irvine, Calif., will build a 500,000-square-foot factory that will employ 600 people near San Antonio, said Mario Hernandez, president of the San Antonio Economic Development Foundation.
The company has two factories in Irvine and one in Richmond, Va., but is near capacity, said Maruchan Vice President of Sales and Marketing Rick Kester. The Texas expansion will satisfy growing sales, not merely shift production from the other facilities, he added.
The Texas factory "should open in the first quarter of 2014, at about the same time capacity would become an issue for the existing plants," he said.
Asked why Maruchan does not expand in Irvine and bring more jobs to Orange County, Kester said the Texan freight rates were very favorable.
Other major California corporations have also expanded operations to San Antonio in the past three years, including PetCo, Capital Group, Sun Edison, Medtronic and InCube Labs.
Recently, the Boyd Co., a corporate relocation advisory firm, reported that a growing number of Orange County and California companies have eyed the Midwest as a good place to move or expand because of lower costs. The study looked at costs for labor, electrical power, real estate and construction, property and sales taxes and travel to and from the location.
Boyd has ranked Orange County as the fifth most expensive location for manufacturing and eighth most expensive for corporate headquarters. Texas wasn't included in those studies.
"Several years ago when we sat down with (California) clients, the first place they wanted to talk about was Las Vegas or Phoenix or Salt Lake City," said John Boyd Jr. "Now they're looking to Indianapolis or Cincinnati that are centrally located to their markets on the east and west coasts."
Maruchan sells an estimated 4 billion packages of Ramen Noodle Soup and has a 66.7 percent market share in the United States, Kester said, adding that Maruchan products have become so popular in Mexico that they have an 87 percent market share.
The Irvine plants currently ship to Mexico, but eventually, the Texas facility may distribute to that market as well as the middle of the United States, Kester said.
Hernandez said Maruchan will spend $330 million on the Texas facility, which will be built on 60 acres of the Medio Creek Business Park, which is outside San Antonio city limits.
The only incentives the city and Bexar County gave Maruchan was a promise not to annex the land into city limits for at least five years, Hernandez said, estimating that Maruchan will save about $1.82 million in property tax a year, being outside San Antonio.
"The county is helping with infrastructure, maintaining primary roads," he added, but did not know the cost of the roads and maintenance.
Maruchan is the U.S. subsidiary of Toyo Suisan, which started in Japan in 1953, according to the company website. In 1972, the company established Maruchan USA as a marketing, importing and distribution office. In 1977, the first Irvine manufacturing plant opened on Deere Avenue.
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