Daikin America Inc. announced Thursday an investment of up to $195 million to expand its Decatur facilities on State Docks Road.
The company said it expects to add an estimated 50 full-time jobs over the next few years.
The announcement was made as company officials and local, state and national business leaders celebrated Daikin America’s 25 years of operations in Decatur. Among those speaking at the ceremony, held at the Westin Hotel in Huntsville, was Noriyuki Inoue, the chairman and CEO of Daikin Industries Ltd., of Osaka, Japan.
The expansion will add polymer production capability, associated monomer production, utility systems, infrastructure enhancements and research and development capabilities, according to the company.
Construction will begin in January 2020, the company said in a news release.
Forrest Keith, general affairs and training manager at Daikin's Decatur plant, said the company gave $200,000 to Morgan County and $200,000 to the city of Decatur as part of the 25th anniversary celebration. He said it will be up to the City Council and County Commission to determine how to spend the money.
"It's to be used for something that'll benefit all the citizens of the community," Keith said.
David Hendrixson, Daikin America’s executive vice president and plant manager, said the investment in the original plant was $150 million and the company has invested about $650 million in the Decatur operation.
Keith said Daikin initially plans to spend about $147 million on the expansion, and it requested tax abatements that would allow the amount to go to $195 million. That would bring investment in the Decatur operations to between approximately $800 million and $850 million.
Hendrixson said Daikin chose the Decatur plant to expand its polymer production over locations in Japan and China.
“This investment shows Daikin’s confidence in the Decatur community and its people,” he said in the release.
Daikin America, headquartered in Orangeburg, New York, is a wholly-owned subsidiary of Daikin Industries Ltd., which is one of the largest fluorochemical suppliers in the world.
The city’s Industrial Development Board on Thursday afternoon approved Daikin’s request for abatement of certain sales taxes during the capital investment period and non-education property taxes for 10 years.
Daikin anticipates project construction will be completed by May 2022, according to the abatement application.
The company estimated there will be 50 new employees after two years, with an estimated average annual salary of $78,000, not including benefits, according to the summary of the application. As of April 1, Daikin had 381 employees, with an average annual salary of $90,000, not including benefits.
“Because some polymers are new to us, we’ll add special equipment,” David Jones, director of engineering, told IDB members. For example, “we will be making a new polymer that goes into high-end perfume bottles,” he said.
“Every project is important,” said Barney Lovelace, the IDB’s attorney. “This is a significant, significant project for this area.”
The IDB abated non-education state and Morgan County property taxes totaling approximately $5.13 million over 10 years. During construction, an estimated $1.69 million in city sales and uses taxes will be abated in addition to $3.38 million in state sales and use taxes.
The project will result in $596,400 per year in additional property taxes for the Morgan County, Hartselle and Decatur school systems. Sales and use taxes created during construction and benefiting the three school systems will total approximately $2.27 million.