ST. PARIS – Local manufacturer KTH Parts Industries is projected to undergo multiple expansion projects this year as part of a larger multi-phased project.
The purpose is to increase the company’s stamping efficiency, welding capacity and material handling efficiency through several building expansions that will add 128,950 square feet onto the current facility, bringing the building’s size to over 1 million square feet.
Last month, the company filed a Community Reinvestment Area application requesting a real estate tax exception incentive of 100 percent for 15 years. In the application the company states its reason for requesting tax incentives is related to competition.
“The automotive components business continues to be fiercely competitive and companies such as KTH must invest heavily in technology and new equipment to remain competitive in the marketplace,” the application states. “In order to continue to provide parts to Honda as new models are introduced, KTH must be able to make the required capital investments to continue to grow the business. The proposed project will provide needed investment and employment opportunities for the community.”
The application states the project is expected to start next month and be completed by December 2017, provided a tax exemption is granted.
Speaking on automotive trends, Art Liming, KTH executive vice president, plant manager and director, said the preference of consumers is more into SUV vehicles compared to smaller vehicles.
“The smaller Accord and Civic production isn’t the current demand for the market as much as the CR-V and Pilot and the Odyssey minivan,” Liming said. “In these expansions we’re kind of getting ready for some of that transfer in product in the Honda lineup as well to be able to provide more of the CR-V level of vehicle for the market versus the Accord and Civic production that we’ve seen in the first 31 years of production here.”
The proposed additions follow multiple expansions the company has made over the past three years. Liming said the company started with around 350 associates and has had more than 30 expansions over the last 31 years.
“We’ve just been very fortunate to grow with Honda as they grow, as well with all of their expansions and market share increases,” Liming said.
KTH Vice President Chris Millice said the largest expansion will be an 84,250-square-foot welding low bay expansion expected to be completed in October. With this expansion, Millice said at least 20 new production jobs will come into the welding area.
The welding expansion is projected to be located in the rear of the facility.
Millice said 1,160 employees work at KTH. In 2013 the company had 818 full-time associates and now they have about 916 full-time associates Millice said.
Other phases of the project include a 9,200-square-foot stamping warehouse, a 16,000-square-foot stamping expansion, a 19,500-square-foot material service expansion, a break room expansion and expansions for a retention pond and other improvements.
One of KTH’s major expansions over the last couple of years was the addition of the Automated Storage Retrieval System, which allowed for the automated loading and unloading of products through a racking system with 65-foot-tall rows.
The company plans to use existing space to add two rows to the system to increase the storage capability.
Outside Champaign County, KTH opened a research and development facility in Plain City last November. Rob Hayes, KTH Senior Vice President, engineering, quality and production, said the company has 22 employees at the facility and expects to expand their resources over the next three years.
“The ultimate goal is to carry out the research in order to bring in new technology, which then could potentially expand our business opportunities,” Hayes said. “In the past, we’ve been a stamping and welding facility of mild or high strength steels but if we see the industry changing then we got to try to stay ahead of that curve.”
As part of KTH’s Community Reinvestment Area application, the company worked with the Champaign Economic Partnership (CEP), the economic development agency for the county.
CEP Economic Development Director Marcia Bailey said because KTH is in a Community Reinvestment Area, it can apply for a real estate tax abatement on the new build.
“From the new construction, the new value is abated, so they still are responsible for all of the real estate taxes that are in place right now. But with the new construction, that’s where the application process goes into place that they’re applying to be abated from, the future real estate taxes on this new construction for ‘X’ number of years, and the application itself is asking for 100 percent abatement for 15 years,” Bailey said.
The next part of the application process requires Graham Local Schools and Ohio Hi-Point to review the application during their respective board meetings this month. Bailey said the school districts can take different kinds of action including asking for negotiation on the application.
Bailey noted construction for the project is expected to be around $7 million, while the company’s investment could be up to $26 million on machinery and equipment.
Nick Walton can be reached at 937-652-1331 Ext. 1777