When Auburn Mayor Jason Levesque visited China in September to drum up business for his city, including a new mushroom factory that could potentially draw in more than $15 million in investment and employ 200 people, trade tensions with the United States were escalating.
Since then, the ups and downs of the trade talks continue. But Levesque said his Chinese partners, the Mingjing Industry Group based in southeast China’s Fujian Province, are taking a long-term view in structuring a deal that transcends trade issues and focuses on building stable business essentials and personal relationships.
And step by step, the mayor said, things are falling into place.
“We’ve built a relationship with them over the past four years,” Levesque said. “One of the reasons we went there was to meet government officials at the provincial and central government levels in order to add legitimacy to the investment.”
Chinese companies need permission from the government to transfer funds out of the country, and there is a cap on how much they can spend overseas. Levesque said money for the planned mushroom factory in Auburn has been approved and earmarked by the necessary Chinese agencies.
The location and size of the factory still aren’t settled, but if the plans materialize, Levesque expects an initial $15 million to $20 million investment to build the facility, which will require extensive heating and ventilation systems. Mushrooms can grow inside year-round in controlled environmental and soil conditions.
Levesque is now scouting for about 15 acres where Mingjing could build its factory to show the company’s executives when they visit Auburn early next year. He said he expects to identify the land and solidify a purchase in early 2019. That will be followed by planning, development and construction of the factory.
“I would expect 2020 for an open date for the factory. It will be a significant construction project,” he said.
Chinese take tariffs personally
The mayor, who braved southern China’s hot and humid temperatures during September, said the topic of trade arose frequently.
“We were there during the heart of the rampup of the tariffs,” he said.
During discussions about trade, he noticed that people in China view economic development differently than the United States.
“We look at gross domestic product for economic development. China looks at individual income levels for the average Chinese family. They want to grow the middle class,” he said. “They are feeling the tariffs on the individual family level. They are taking it personally.”
With the threat of tariffs imminent through the summer, U.S. stores bought holiday gifts and decorations earlier than usual, so the brunt of the tariffs hasn’t yet hit the United States, he said.
“We will enjoy the low cost of goods through the holidays,” Levesque said.
Despite the political snarls, he said Chinese people still love America and American goods. And Auburn hopes to capitalize on that.
Levesque met Mingjing’s executives through Auburn’s Economic Development Director Michael Chammings, who in turn met them through the Chinese community in Auburn.
Mingjing President Fang Cheng Morrow and her business partner, Nianping Wang, liked the area, Levesque said, and bought the Prospect Hill Golf Course in Auburn in 2016. They’ve since explored more projects in the city, including a location for a large mushroom factory.
Wang became familiar with Auburn when his daughter attended Hebron Academy.
“He was visiting here quite often and got to know the area,” Levesque said. “He and Morrow bought the golf course as a good investment.””
Levesque said the business and personal relationships between Auburn and Mingjing are progressing, even though land for the factory still hasn’t be chosen and no deal has been signed.
Minjing executives are investing more in Auburn. They are building two houses adjacent to the Prospect Hill Golf Course, one of which, for Wang, has seven bedrooms and 5½ baths. The houses are scheduled to be completed in January, Chammings said.
“One thing we realized when we were in China is that things go slower. But it [the factory deal] is getting closer,” Levesque said. “It’s our job to show them we are in this with them and absolutely welcoming of the idea [for the factory].”
Levesque said the planned Auburn plant could potentially be the largest mushroom factory in the United States, and possibly even North America. He characterized it as light industry similar to the Backyard Farms tomato facility in Madison.
The Mingjing mushroom factory he and Chammings visited in Fuding, the headquarters location of Mingjing, can produce 4.4 million pounds of all types of mushrooms, including the white button mushrooms commonly grown in Pennsylvania and shitake mushrooms. The company is accustomed to competing at a large scale.
The new factory in Auburn likely would produce several types of mushrooms, but predominantly the white button mushrooms. Those are the most common mushroom in supermarkets and on pizza, in salads and hamburgers.
Currently, white button mushrooms are grown mostly in southeastern Pennsylvania, which produces 577 million pounds of them annually, worth $560 million in sales, according to the U.S. Department of Agriculture Statistics Service and Penn State University. The Pennsylvania mushroom growers account for two-thirds of the button mushrooms consumed in the United States.
Levesque said the mushrooms grown in Auburn will be sold mostly in the United States, where there is a lot of demand for themt.
“There’s no reason why we shouldn’t be producing mushrooms in the United States,” he said. “They’re not outdoor temperature-dependent because they grow inside where the temperature can be controlled.”
Levesque said China is not the only business partner Auburn is courting. But China has the potential for long-term success and growth.
Another option he currently is discussing with other potential Chinese partners is using Auburn as a base for value-added lumber yards. Timber would be harvested in Maine, processed into lumber in Auburn and exported to China or elsewhere for building.
“We’re treating Auburn like a business,” Levesque said of the city’s growth strategy.