By the numbers:
20 — Possible new jobs as part of expansion
$26 million — Maximum investment in new equipment
$8.5 million — Maximum investment in new construction
$811,616 — Potential new payroll as part of expansion
The Springfield News-Sun is committed to digging into stories about manufacturing in Clark and Champaign Counties. The paper will continue to cover local manufacturers like KTH and how the auto industry affects their bottom line.
A major Honda auto parts supplier plans to expand for the third time in recent years to add to the company's stamping and welding facilities.
The proposed $23 million to $34.5 million expansion to KTH Parts Industries Inc. in St. Paris would add 20 jobs to the company’s workforce that includes 914 full-time workers and 223 temporary workers, documents show.
KTH Parts Industries is seeking a 15-year, 100-percent tax abatement as part of the major expansion, according to documents filed with the Graham Local School District and the Ohio Hi-Point Career Center. The documents show the new jobs will add an additional $812,000 in payroll.
Officials at KTH could not be reached for comment this week.
Recent success at KTH has mirrored Honda's sales, said Marcia Bailey, economic development coordinator for the Champaign Economic Partnership.
Combined Honda and Acura sales cruised to an all-time record of more than 1.58 million vehicles sold last year, a 3-percent increase over the previous year. That also beat the company’s previous record set in 2007. The carmaker employs about 13,000 Ohioans overall.
“It’s a shadow effect,” Bailey said. “(KTH) needs to make the appropriate changes in their production to be able to meet what Honda needs.”
The auto industry as a whole is having a record year, and forecasts show 17.8 million vehicles could be sold overall this year, said Stephanie Brinley, an analyst for IHS Automotive.
“We’re in a record year for a lot of auto manufacturers,” Brinley said. “Honda is having terrific sales the last couple of years.”
Honda’s Marysville facility produces the Accord, which is in a tough market as buyers are increasingly looking for sport utility vehicles, Brinley said. But within the category she said Honda is well-positioned.
“Honda does really well with the Accord and Civic,” Brinley said. “They’ve got two cars in really tough segments that are selling really well and they’ve got SUVs that sell really well.”
Just last year, KTH wrapped up a separate, roughly $29 million investment that added about 28,000 square feet to its facility on Ohio 235, as well as new equipment and an automated storage retrieval system.
And the company is moving forward with a new $6.7 million research facility in Plain City expected to open in December 2017. That facility is expected to employ more than 30 workers and help KTH develop stronger, lightweight materials to help Honda meet tougher fuel efficiency standards by 2025.
A Community Reinvestment Area application filed with Graham and Ohio Hi-Point shows KTH is seeking a 100 percent tax abatement for 15 years on the newest expansion. Board members from both districts are expected to review the request during board meetings in June.
The project could start as early as July this year if approved, and would be completed by December next year, documents show.
“The purpose of this project is to expand our stamping, welding and material service inventory capacity and efficiency,” said Chris Millice, vice president of general administration at KTH in the request. “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 market place.”
The incentives will benefit the community in the long run because it will help KTH retain workers, and they will pay taxes on the property once the CRA agreement expires, Bailey said. But it also means more money being spent locally in the meantime. The school boards are required to involved in the agreement because the abatement is more than 50 percent, she said.
The project would include several building expansions including:
• a 9,200 square foot expansion to the stamping warehouse
• a stamping highbay expansion of 16,000 square feet
• a welding low bay expansion of 84,250 square feet
• additional road, pond and other infrastructure improvements
KTH celebrated its 30th anniversary last year, and Bailey said the firm has seen steady growth ever since.
“In 30 years they’ve gone from 250,000 square feet to nearly a million,” Bailey said.
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