Daikin America Inc. announced Wednesday it will begin a $60 million expansion of its Morgan County facility, and completion is expected by October 2012.
General Affairs Manager Forrest Keith said the project will mean more jobs, but the company has not determined how many.
“This is exciting news,” said Lynn Fowler, chairman of the Morgan County Economic Development Association. “It’s continuing evidence — along with the Polyplex construction — that companies are realizing it’s a good time to move forward, invest in our community and enlarge their business.”
The project — which will double the plant’s production of two plastics, FEP and ETFE — had its genesis in August 2008, when Daikin requested and received from the Decatur Industrial Development Board a $1.7 million abatement in state and county non-educational property taxes and a $1 million abatement in state sales taxes.
At the time, Daikin officials said they had not decided whether to pursue expansion in Decatur or expand a plant in China. The abatements will apply to the construction announced Wednesday.
Daikin estimated the expansion would generate $161,000 in one-time revenue for the city because of sales-tax revenue on construction employees and the building permit, $11,000 a year in sales-tax revenue from hired employees and $26,000 a year in school taxes.
The company estimated the expansion would generate $199,000 a year in school taxes, most for Morgan County School District.
“We were getting ready to announce (construction in Decatur) when the economy went south, for Daikin and everybody,” Keith said.
The plastics are fluoropolymers, whose insulating characteristics make them a popular coating for residential and industrial cable, such as that used on Ethernet cables. Because the plastics have a slick coating, they are used in medical devices like heart catheters.
ETFE is a common component of photovoltaic and architectural films. Daikin ships the materials to its customers as either a powder or pellets.
“The demand for the products that we make is very, very good,” Keith said.
Daikin employs 350, up from 322 in 2008.
“We’ve added people over the past year,” Keith said.
In 2008, the company predicted the expansion would add 25 workers and $1.5 million to its payroll.
Keith said Daikin will advertise for jobs in Decatur and Huntsville. Southern Staffing will accept applications when the hiring process begins. Daikin will select the best applicants and put them through pre-employment training. From that group, it will select new hires, who will go through more intensive training.
All applicants must take WorkKeys assessment, offered at Calhoun Community College.
“We’ll have them hired and trained well before we start production,” Keith said.
Keith said while the sluggish economy hurt Daikin beginning in 2008, it is no longer a major factor.
“Everywhere I go, I hear what a struggle it is, especially for small businesses,” Keith said. “I don’t hear that from people like 3M, Hexcel, BP. The Fortune 500 seem to be booming, They’re experiencing good sales, like we are.”
Jeremy Nails, president of Morgan County Economic Development Association, said he is hearing positive reports from large and small industries in the county.
“They’re ramping up production and many are looking at hiring again,” Nails said.
He said more companies are expressing an interest in locating in Morgan County. He receives a couple such inquiries a week — still slow, he said, but a far cry from 2008 and 2009.
“It was dead then. There were, like, no inquiries,” Nails said. “Back then we were focused on which of our existing industries might potentially lay people off. Now we’re seeing positive news. The Daikin expansion is great news.”
Nails said many companies held back on production for so long that their inventories dwindled. Now, as demand picks up, they have to increase production.
Fowler said the expansion is merely the latest example of Daikin’s value to the community.
“Daikin is one of those companies that is truly outstanding,” Fowler said. “It’s providing great jobs for our people and community service.”