Texas was ranked as the third largest state in the US for total new foreign direct investment (FDI) projects between 2009 and 2013. During this period, more than 400 foreign companies opened or expanded their business, which Japanese projects accounting for 6% of the total, making it the fourth largest source country for FDI projects. Over the years, many Japanese manufacturing companies, such as Toyota and Toshiba, have been expanding their facilities. On January 8, 2015, Japanese multinational manufacturer Daikin Industries, Ltd. announced plans to expand its Goodman operations in Houston, Texas.
Since the acquisition of Goodman in 2012, Daikin has increased their presence in the US market by utilizing strengths of both companies. They opened their first line in 2013 to manufacture high-end Variable Refrigerant Volume products in Houston. Since then, the companies have been combining efforts to launch advanced environmentally-friendly products in the US market.
Texas is currently experiencing a growth in demand at an annual pace of more than 20% for energy efficient air conditioning systems. This growth is partly driven by implementation of stricter HVAC regulations, and by communities’ increasing awareness of environmental issues. Daikin’s advanced knowledge and technology in ductless air conditioning systems will be used to make products with higher energy efficiency, lower installation costs, and lower noise levels, compared to the traditional US ducted system. Sales of ductless products began in 2014 outside of North America, but the new facility in Houston will make it possible to manufacture such products domestically and make them available within the state for the first time.
Construction of this new facility is planned to start in the coming months, and to be in operation by mid-2016. This involves an investment of $417 million, which makes it the largest single investment in Goodman’s 40-year history. This project is anticipated to increase employment in Texas by approximately 4,000 jobs.
Sakura Kajimura is a Research Intern at the East-West Center in Washington and an undergraduate student at the University of Western Australia.