Gov. Glenn Youngkin sang the praises of international business cooperation Monday as officials broke ground on a massive undersea cable manufacturing factory in Chesapeake.
The project from a South Korean cable company will eventually serve national and global wind energy projects and represents the largest investment in the city’s history.
But despite the rosy outlook from officials, a cloud of uncertainty swirled.
“Tariffs is a concern. If I say that is not a concern, I’d be lying,” said Koo Bon-kyu, president of South Korean company LS Cable & System, told American and South Korean media after the ceremonial groundbreaking.
But Koo said there aren’t many competitors manufacturing this kind of miles-long copper cable for the wind industry.
“Even with tariffs, you’ll still have that market and the pricing will be adjusted.”
The company’s American subsidiary, LS Greenlink, announced last July it would build a state-of-the-art manufacturing plant in Chesapeake, along the Elizabeth River’s Southern Branch.
The 750,000-square-foot facility is expected to be open by 2028, turning out lengths of cable kilometers long that will be loaded directly onto boats from the factory.
It’ll primarily serve customers in Europe and North America and Koo said it already has its first customer, European grid operator Tennet. Orders from Tennet and others are filling up into the 2030s and Koo said the company is already talking about expanding the yet-to-be-built facility.
He also said the company is looking for ways to hedge the risk from the ongoing trade war, such as sourcing more raw materials locally.
“Can we de-risk everything? No, but I think we can de-risk quite a lot of it, where business can be still as usual and hopefully everything will be back to normal soon.”
After the ceremony, Youngkin did not take media questions about the potential impacts of President Donald Trump’s policies on Virginia businesses.
LS Greenlink received a $99 million federal tax credit under the 2022 Inflation Reduction Act but the renewable energy industry is worried about the fate of those incentives under Trump.
On his first day in office, the president issued an executive order halting the disbursement of funds from the act and has made other moves to reduce federal support for the green energy industry, though even some within the Republican party have defended the clean energy tax credits.
“It is a big part of us coming here, and that's one of the reasons why we chose America,” said Patrick Shim, the managing director of LS Greenlink.
Shim said the incentive isn’t “free money;”LS Greenlink will only get the tax credits if it invests what it promised. Last year, Shim said the facility would cost $681 million to build, already the largest single investment in Chesapeake’s history. Now, they say it’ll be more than $700 million.
The facility would employ 330 people and become the state's tallest building.
A 660-foot tower used in the manufacturing process will unseat the Westin hotel in Virginia Beach, currently the state’s tallest building at 508 feet.
Chesapeake had been marketing the 96-acre brownfield site on the Elizabeth River’s Southern Branch for decades. The former industrial site was used for spoils when the river was dredged.
LS Greenlink’s facility won’t use the whole site, leaving room for potential expansion.
Hampton Roads officials have said they hope this project generates more wind industry investment. The region’s economic development agencies have been pushing to position Hampton Roads as the center of the U.S. wind industry as Dominion ramps up development of its wind project off the coast of Virginia Beach.
