Foreign-Trade Zone 57-Asheville, North Carolina; Application for Foreign-Trade Subzone Status; Volvo Construction Equipment North America, Inc. (Construction Equipment) Asheville, NC, Area

An application has been submitted to the Foreign-Trade Zones Board (the Board) by the North Carolina Department of Commerce, grantee of FTZ 57, requesting special-purpose subzone status for the manufacturing facilities (construction equipment) of Volvo Construction Equipment North America, Inc. (Volvo), located at sites in the Asheville, North Carolina area. The application was submitted pursuant to the Foreign-Trade Zones Act, as amended (19 U.S.C. 81a-81u), and the regulations of the Board (15 CFR part 400). It was formally filed on July 17, 2000.

The Volvo facilities are located at two sites in the Asheville, North Carolina, area (64 acres, 531,700 sq. ft. total): Factory Site (6 buildings/399,700 sq. ft.)—office and main manufacturing facilities, located at 2169 Hendersonville Rd. (U.S. Rt. 25), Skyland; and Feeder Distribution Warehouse Site (1 building/132,000 sq. ft.)—located at 1856 Hendersonville Rd., Asheville.

The facilities (400 employees) are used for the fabrication, assembly, and testing of Volvo's articulated haulers and loaders. Some of the components used in the manufacturing process are purchased from abroad (ranging from 36.1% to 82.8% of finished product value), including: Cabs; sheet metal (non-steel); hydraulic cylinders; axles; transmissions; engines; wheels; rims; tires; buckets; caulking materials; anti-corrosive preparations; locks; spanners and wrenches; electrical instruments and apparatuses; and lamps and lighting (duty rates on imported items range from duty-free to 9.0%). The company indicates that any foreign-produced steel products will be admitted to the proposed subzone in domestic (duty-paid) status.

Zone procedures would exempt Volvo from Customs duty payments on foreign components used in export production. FTZ procedures will help Volvo to implement a more efficient and cost-effective system for handling Customs requirements. On its domestic sales, Volvo would be able to choose the lower duty rate that applies to the finished products (duty-free) for foreign components, including those noted above. The company also would benefit from duty savings on scrap and waste resulting from the production process. FTZ status may also make a site eligible for benefits provided under state/local programs. The application indicates that the savings from zone procedures would help improve the facilities' international competitiveness, and could enable the company to shift additional production from overseas to the Asheville-area facilities.

In accordance with the Board's regulations, a member of the FTZ Staff has been designated examiner to investigate the application and report to the Board.

Public comment on the application is invited from interested parties. Submissions (original and three copies) shall be addressed to the Board's Executive Secretary at the address below. The closing period for their receipt is October 2, 2000. Rebuttal comments in response to material submitted during the foregoing period may be submitted during the subsequent 15-day period to October 16, 2000.

A copy of the application and the accompanying exhibits will be available for public inspection at each of the following locations: Office of the Executive Secretary, Foreign-Trade Zones Board, U.S. Department of Commerce, Room 3716, 14th and Pennsylvania Avenue, NW., Washington, DC 20230.

U.S. Department of Commerce Export Assistance Center, 521 East Morehead St., Suite 435, Charlotte, NC 28202.