Why Are Companies Investing in Tennessee?

Affordability, low business costs and excellent infrastructure help make the state an attractive investment.

By Bill Lewis on November 21, 2023

Landmark Recovery

Tennessee’s winning combination of affordability, low business costs, prime location, superior transportation infrastructure and high-quality workforce is making the Volunteer State the business address of choice. Companies across a wide range of industries are investing in Tennessee and finding success.

National and Global Companies Investing in Tennessee

Communities throughout Tennessee draw investments and job creation by U.S. businesses and international companies such as Toyota Boshoku Tennessee in Jackson and South Korea’s Dongwha Electrolyte USA in Clarksville. 

Landmark Recovery, one of the nation’s leading addiction recovery service providers, announced it would invest $7.5 million to expand its headquarters in Franklin approximately one year after relocating its corporate operations from Arizona to Tennessee. 

The Tennessee Department of Economic and Community Development (TNECD) works to create opportunity throughout the state by attracting new investment from companies within the U.S. and around the globe, while also working with existing Tennessee companies to facilitate expansions, which provide additional investment and spur job creation. 

Elevating Communities 

TNECD offers a variety of programs that help elevate communities by promoting site development, downtown revitalization, broadband expansion, entrepreneurship and other community and rural development initiatives. Through these programs, TNECD awarded $25.4 million in grants to communities across the state as of mid-2023. 

International companies are a major source of investment and job creation. Tennessee is home to more than 1,000 foreign-based businesses that have invested more than $47 billion and employ more than 161,900 Tennesseans. 

“Foreign direct investment (FDI) in Tennessee is strong, and we know the importance of having a global footprint. Our department has five recruitment representatives that support Tennessee’s FDI efforts in12 countries across Europe and Asia,” TNECD Commissioner Stuart C. McWhorter says. 

Examples of FDI in 2023 include companies from Canada, Turkey, South Korea, Portugal, Australia, Japan, Finland and Germany. 

FDI comes to Tennessee across a wide range of industries. SK Food Group, for example, is investing $205.2 million to construct a production facility in Cleveland, Tennessee. The company will create 840 jobs in Bradley County by 2030. 

Turkey’s Kordsa Inc. is investing $50 million in the expansion of its fibers and filaments manufacturing facility in Hamilton County. Portugal’s MSS Steel Tubes USA is investing $6 million and creating 129 jobs in Shelby County. 

South Korea-based LG Chem will invest $3.2 billion to establish a new cathode manufacturing facility in Clarksville to support the electric vehicle battery value chain in the United States. It is the single-largest announced FDI project in Tennessee’s history. 

The facility will be the largest cathode manufacturing facility in the country, with capacity to produce roughly 120,000 tons of cathode material annually by 2027. That is enough to power batteries in 1.2 million electric vehicles with a range of 310 miles per charge. LG Chem is creating more than 850 jobs. 

Boom in EVs 

McWhorter says the company is part of Tennessee’s booming electric vehicle sector. 

Tennessee is No. 1 in the Southeast for EV manufacturing employment and investment. The industry has invested $16.2 billion since 2017. Four vehicle manufacturers – GM, Ford, Nissan and Volkswagen – have operations in the state. More than 23,500 Tennesseans are employed by companies with EV operations. 

The state’s $475.8 billion economy includes major industry clusters in automotive production, advanced manufacturing, aerospace, chemical and rubber production, biotechnology and health care, logistics, and film, music and entertainment. 

“One of Tennessee’s greatest advantages is our business climate,” McWhorter says. “Our state and local tax burdens are among the lowest in the country, we have no personal income tax, and our budget operates with a healthy surplus, rather than a deficit.” 

Recently, CNBC ranked Tennessee No. 3 in its annual America’s Top States for Business ranking. 

“This is the highest the state has placed since the ranking’s start in 2007,” McWhorter says. “We’re proud that companies are seeing the benefits of doing business in Tennessee.”