E8-24327. Foreign-Trade Zone 20-Suffolk, VA; Application for Subzone Status; STIHL Incorporated (Outdoor Power Products Manufacturing and Distribution), Virginia Beach, VA

An application has been submitted to the Foreign-Trade Zones Board (the Board) by the Virginia Port Authority, grantee of Foreign-Trade Zone (FTZ) 20, requesting special-purpose subzone status for the outdoor power products manufacturing and distribution facilities of STIHL Incorporated (STIHL) located in Virginia Beach, Virginia. The application was submitted pursuant to the provisions of 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 October 3, 2008.

The STIHL facilities are located at 536 Viking Drive, 2525 International Parkway, 601 Central Drive, 825 London Bridge Road, and 528 Viking Drive, in Virginia Beach (87 acres, 9 buildings, 2,000 employees). The facilities are used for the manufacture and distribution activities of various types of gas-powered and electric outdoor products and their parts (blowers, trimmers, sprayers, cutters, cultivators and chainsaws; HTSUS numbers 8414.59, 8467.29, 8424.81, 8467.89, 8432.29, 8467.22, and 8467.81). At full capacity the STIHL facility can produce up to 4 million units annually. Imported components and raw materials account for approximately 25 percent of the finished products' value. Parts and components that may be imported into the proposed subzone for manufacturing include: petroleum oils (2710.11); bituminous oils (2710.19); carbides (2849.90); glues and adhesives (3506.91); pickling preparations (3810.90); organic solvents and thinners (3814.00); polyethylene (3901.20); propylene copolymers (3902.30); polyamides (3908.10); polyurethanes (3909.50); silicones (3910.00); petroleum resins (3911.90); monofilament plastics (3916.90); plastic tubes, pipes and hoses (3917.21, 3917.22, 3917.23, 3917.29, 3917.31, 3917.32, 3917.33, 3917.39, 3917.40); self-adhesive or non self-adhesive plates, sheets, film, foil, tape and strip (3919.10, 3919.90, 3920.10, 3920.62, 3920.92, 3921.11, 3921.90); plastic boxes, cases, crates, stoppers, lids, caps and other closures (3923.10, 3923.21, 3923.29, 3923.30, 3923.40, 3923.50, 3923.90, 3926.90); rubber tubes, pipes and hoses (4009.11, 4009.12, 4009.21, 4009.22, 4009.31, 4009.32, 4009.41, 4009.42); erasers (4016.92); vulcanized rubber gaskets, washers, seals and other articles (4016.93, 4016.99); plaiting materials (4601.29); synthetic twine, cordage, ropes and cables (5607.50); felt filters (5911.90); harnesses (6307.90); iron or steel tubes, flanges and pipe fittings (7307.21, 7307.91, 7307.92, 7307.99); iron and steel self-tapping screws, bolts, nuts, screws, screw hooks, rivets, cotters, cotter pins and washers (7318.14, 7318.15, 7318.16, 7318.19, 7318.21, 7318.24, 7318.29); leaf springs, leaves and helical springs (7320.10, 7320.20, 7320.90); iron or steel wire and other articles (7326.20, 7326.90); copper tube and pipe (7411.29); copper alloy tube and pipe (7412.20); copper-stranded wire and cable (7413.00); copper nails, tacks, drawing pins and staples (7415.21, 7415.29, 7415.33, 7415.39); aluminum foil (7607.20); aluminum tubes and pipes (7608.20); aluminum stranded wire, cable and plaited bands (7614.10, 7614.90); aluminum nails, tacks, staples and other articles (7616.10, 7616.99); zinc articles (7907.00); tungsten powders (8101.10); hand tools (8205.40, 8205.59); iron, steel or other base metal flexible tubing (8307.10, 8307.90); internal combustion engine parts (8409.91); fuel, lubricating or cooling pumps and their parts (8413.30, 8413.91); air or vacuum pumps and their parts (8414.59, 8414.90); oil or fuel filters (8421.21, 8421.23); fire extinguishers, spray guns, steam or sand blasting machines and their parts (8424.81, 8424.90); pressure-reducing valves, check valves, oleo-hydraulic valves, safety or relief valves and their parts (8481.10, 8481.20, 8481.30, 8481.40, 8481.80, 8481.90); ball bearings, roller bearings and their parts (8482.10, 8482.20, 8482.30, 8482.40, 8482.50, 8482.80, 8482.91, 8482.99); transmission shafts and cranks, bearing housings, torque converters, flywheels and pulleys, clutches and shaft couplings, toothed wheels and chain sprockets (8483.10, 8483.30, 8483.40, 8483.50, 8483.60, 8483.90); gaskets (8484.10, 8484.20, 8484.90); non-electrical machinery parts (8487.90); electric motors and generators (8501.10, 8501.20, 8501.31, 8501.32, 8501.33, 8501.34, 8501.40, 8501.51, 8501.52, 8501.53, 8501.61, 8501.62, 8501.63, 8501.64); electric generating sets (8502.20); parts for electric motors, generators and generator sets (8503.00); primary cells, batteries and their parts (8506.80); lead-acid storage batteries and their parts (8507.10, 8507.20, 8507.30, 8507.40, 8507.80, 8507.90); spark plugs (8511.10); ignition magnetos, magneto-dynamos and magnetic flywheels (8511.20); distributors and ignition coils (8511.30); generators and their parts (8511.50, 8511.90); portable electric lamps (8513.10); electrical switches, relays, fuses, plugs, sockets, lamp-holders, circuit breakers and junction boxes and their parts (8535.90, 8536.10, 8536.20, 8536.30, 8536.41, 8536.49, 8536.50, 8536.69, 8536.90, 8538.90); electric filament or discharge lamps and their parts (8539.22, 8539.29, 8539.31); cathode ray tubes and their parts (8540.89); coaxial cable and coaxial electric conductors with or without connectors (8544.20, 8544.42, 8544.49, 8544.60); non-propelled trailers and semi-trailers and their parts (8716.80, 8716.90); pneumatic hand tools (8467.11); and, vacuum cleaners and their parts (8508.11). The duty rates on the imported components range from duty-free to 12.5 percent.

This application requests authority for STIHL to conduct the manufacturing activity under FTZ procedures, which could exempt the company from customs duty payments on the imported components used in export production. Approximately 40 percent of production is exported. On domestic sales, the company could defer duty payment and choose the lower duty rate (duty-free to 4.7 percent) that applies to the finished products for the imported components used in manufacturing. STIHL may also realize savings related to direct delivery and weekly customs entry procedures. The company would also realize savings on the elimination of duties on materials that become scrap/waste during manufacturing. The application indicates that the FTZ-related savings would improve the plant's international competitiveness.

In accordance with the Board's regulations, Christopher Kemp of the FTZ staff is designated examiner to investigate the application and report to the Board.

Public comment is invited from interested parties. Submissions (original and 3 copies) shall be addressed to the Board's Executive Secretary at the address listed below. The closing period for their receipt is December 15, 2008. Rebuttal comments in response to material submitted during the foregoing period may be submitted during the subsequent 15-day period (to December 29, 2008).

A copy of the application and accompanying exhibits will be available at each of the following addresses: Virginia Port Authority, 600 World Trade Center, Norfolk, VA 23510; and, Office of the Executive Secretary, Foreign-Trade Zones Board, Room 2111, U.S. Department of Commerce, 1401 Constitution Avenue, NW., Washington, DC 20230. For further information contact Christopher Kemp at [e-mail] or [phone].

Dated: October 6, 2008.

Andrew McGilvray,

Executive Secretary.