South Korean company plans to build $70M plant in Killeen

Killeen Daily Herald
By Paul Bryant | Herald Staff Writer
Nov 11, 2022

At an estimated $70 million investment, a South Korean company plans to open a plant at the Killeen Business Park — the first in the United States for Dongjin Semichem, a chemical company.

“This is one reason we have economic development incentives to bring in businesses that can grow in our industrial park,” Killeen Mayor Debbie Nash-King said during a Killeen City Council workshop on Tuesday. “This is something we need. We want more businesses to come to our area.”

According to a presentation by Scott Connell, president and CEO of the Killeen Economic Development Corporation, Dongjin Semichem is “one of the largest producers of fine chemicals for the semiconductor industry.”

“What is attracting them to us is their opportunity to supply Samsung and their new facility that’s under construction in Williamson County,” Connell said. “One of the exciting things is this will be their first production facility in the U.S., although they do have an office in New Jersey.”

Dongjin Semichem was founded in 1967, Connell said.

“It’s a very mature company with about 1,800 employees worldwide and about $1 billion in sales worldwide,” he said. “They have 20 plants. Their minimum investment would be $70 million and 17 jobs averaging about $50,000 a year.”

At the Killeen Business Park, in northeast Killeen, the company plans to acquire at least 31 acres.

“They are considering building on 31 acres but actually, it’s almost a 42-acre site ... that allows for some buffer in the Killeen Business Park that they would be purchasing from the EDC.”

‘A blended product’

Semiconductors, or microchips, are manufactured from pure elements such as silicon or germanium, or from compounds.

“They will be producing a blended product to support production of the semiconductor industry,” Connell said. “The product is what’s referred to as a thinner or a cleaning process, as they build out the semiconductor or silicon wafer at the Samsung facility.”

A year ago, Samsung announced it is investing $17 billion in a plant in Taylor, about 58 southeast of Killeen.

“The new facility will manufacture products based on advanced process technologies for application in areas such as mobile, 5G, high-performance computing and artificial intelligence,” according to the company’s website. “Samsung remains committed to supporting customers globally by making advanced semiconductor fabrication more accessible and meeting surging demand for leading-edge products.”

Samsung was founded as a trading company in 1938 in South Korea.

Dongjin Semichem “has a long history of working with that company,” Connell said. “We’re excited to be that next big investment for them in their capacity. The company has a long history of quality management, of environmental management in their processes.”

‘Public needs to hear’

Mayor Pro Tem Ken Wilkerson asked Connell to elaborate on Dongjin Semichem’s safety record.

“A lot of people get on edge,” Wilkerson said. “I think the public needs to hear that as well. It’s one thing for us to know, but if we’re going to approve this, I think it’s important for people out there.”

Wilkerson then asked for Connell to bring his “experts” to the dais so they could talk about safety concerns or answer questions to that end. But they weren’t available on Tuesday.

“We hired an outside consultant ... who has a long history of working with this industry,” Connell said. “But they had never worked with this company. They reviewed their processes, reviewed their products and came to us with a lengthy report that gave us great comfort, at least in terms of the process and the way they’ve handled themselves over the years.”

Councilman Michael Boyd called the project “great for the city of Killeen.”

“This facility wouldn’t emit any emissions, correct? It’s not like a factory or anything, right?”

Connell said the company will produce no emissions from its Killeen plant, despite being issued an air permit from the Texas Commission on Environmental Quality.

“But lots of industries do,” he said. “Dry cleaners even have one. All of their processes will be inside the facility without any emissions from the process.”

Councilwoman Jessica Gonzalez called Dongjin Semichem’s plans for Killeen “a huge move in the right direction.” Nash-King agreed.

“If we continue to move in this direction, I think we are going to be in a lot of high-tech, high-paying jobs not just for our citizens but for the soldiers leaving Fort Hood who have those specialties.”

Chapter 380 agreement

On Tuesday, council members are scheduled to consider approving a Chapter 380 agreement with Dongjin Semichem to reimburse a portion of personal property taxes for up to 10 years for up to $435,999.

“What that nets the city, even with that incentive, is a little over $1.5 million over that time period,” Connell said.

Property taxes on the site are estimated to be almost $1.9 million annually. With rebates on furniture for 10 years of $374,539, the net revenue for the city is projected at a little more than $1.5 million, according to the agreement.

As part of the Chapter 380 agreement, Dongjin Semichem agrees to:

Make a capital investment of at least $70 million at the site within two years of Closing, with at least $1.5 million committed to acquisition costs and $30 million for construction. For acquisition and installation of furniture, fixtures and equipment at the site, $38.5 million should be committed to the project.

Create at least 17 new full-time jobs by the first anniversary of “commencement of operations” and maintain those jobs until the 10th anniversary.

At least 10 years following “commencement of “operations, pay an annual average salary of at least $50,000 to workers.

By the first anniversary of “commencement of operations,” establish taxable inventories of at least $4 million at the site as shown in the records of Bell County Tax Appraisal District, and to maintain such value until the 10th anniversary of “commencement of operations.”

The reimbursement is equal to 25% of personal property taxes owed to the city, not exceeding $435,999.

MGC Pure Chemicals America, a Japanese company, opened at the Killeen Business Park in March 2019. With 33 jobs, it pays an average annual salary of $69,564.