UPM Rafsec, a manufacturer of radio-frequency identification tags, is extending its presence in the United States with a new production facility it's building in Fletcher, N.C. The company, with roughly $1 billion in annual revenue, established a sales and technical support center in the United States last year.

The decision to build a manufacturing facility, scheduled to open later this year, is part of a $24 million investment that will enable the Finland-based company to produce 1 billion RFID tags annually.

More than half of UPM Rafsec's tag sales are in the United States. Sales to retailers represent the most significant year-to-year growth, says Christer Härkönen, senior VP of UPM Rafsec. "We are targeting Class 1, Gen 2 tags, but will start by manufacturing Class 1, Gen 1 tags," Härkönen says. "We imagine customers will not shift overnight to the second generation of RFID tags."

About 1.8 billion RFID tags have been sold this year, with businesses in the health-care, financial, security, and automotive industries as well as libraries, representing the biggest buyers, according to U.K.-based research firm IDTechEx.