KITCHENER - Manufacturing normally moves the other way, from Canada to China.

But in an unusual reversal, a Chinese-based company will boost Kitchener's manufacturing, by setting up a plant on Manitou Drive next year to produce and ship steel nails that will be sold in the United States.

The plant, to be called United Enterprise, will initially employ 50 people and could hire as many as 80 people, the company's chief financial officer, Simon He, said on Thursday. The hiring will happen in several stages during 2015.

The plant is a joint venture of the Suzhou Xingya Investment Company in China, along with management shareholders in Canada, he said.

The $20-million manufacturing investment in the steel nail plant was announced by Premier Kathleen Wynne during a trade mission to China in late October, but details at the time were limited because the company was still negotiating for the facility here.

But now, the company has closed the deal to buy the 300,000-square-foot former office furniture components plant at 501 Manitou Dr., and transform it into a nail manufacturing operation over the next few months, he said.

The work on setting up the facility will begin in the new year, with production starting in the second quarter of 2015, he added. The plant will mainly employ machine operators and warehouse and logistics people, along with office staff.

It is a rare development for Kitchener, which has lost a lot of its manufacturing base over the years.

The steel nail plant is moving into what used to be Knape & Vogt Waterloo, previously known as the Waterloo Furniture Components plant that once employed 230 people on Manitou Drive. The American-owned Knape & Vogt shut it down last year and moved production to its headquarters in Michigan.

But the manufacturing boost here is also ironically the result of anti-dumping rules in the United States that are aimed at protecting the nail industry in the U.S.

The United States has imposed anti-dumping duties on steel nails from various countries, including China, to stop the practice of price dumping, in which a foreign supplier artificially charges less than fair value for a product.

The U.S. producers of steel nails have pressed the Department of Commerce and the United States International Trade Commission for imposition of duties, saying nails are being sold below cost in the United States and supported by unfair government subsidies.

According to the International Trade Commission, about $904.1 million worth of nails were sold in the U.S. last year and about 76 per cent of those nails were imported from other countries.

The duties have made the cost of shipping nails from China to the United States too high, the chief financial officer for United Enterprise said.

"If we import the raw material and make it in Canada, then we can sell to the United States," he said.

He added that Kitchener is a good location in terms of being able to ship into United States market, and the company also had a management team in Canada to set up and run the business, so it made sense to make the investment here.

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"It is not that easy to find a plant," He said. "It depends on the building conditions, the location and the price being right for the property."

The Suzhou Xingya Investment Co. is based in Jiangsu province, which is Ontario's sister province in China. The twinning is part of a business relationship that was forged under former premier Bill Davis. During the trade mission in the late fall, delegates from 60 Ontario firms travelled with Wynne and inked 13 agreements in China.