MICHIGAN CITY – Tax abatement from the city and tax credits from the state will help one of Michigan City's largest manufacturers complete a major capital investment to expand its North American operations and Michigan City headquarters campus, creating more than 30 new jobs.
Sullair A Hitachi Group Company, which manufactures compressed air solutions, including parts, service and training to customers around the world, has announced plans to invest nearly $30 million in its Michigan City facility to expand manufacturing capacity.
The expansion was approved for two separate tax abatements at the Common Council meeting on Tuesday, and has also been awarded conditional tax credits by Indiana Economic Development Corporation.
Sullair COO and Executive Vice President Charlie Takeuchi said, “Michigan City has been our home since 1965. Since Hitachi acquired Sullair, our partnership and commitment to the local community has only grown. We’re pleased to continue to make significant local investments in Michigan City.”
With this expansion Sullair plans to hire 33 additional employees, adding $1.9 million in salaries annually, according to Sullair COO and executive vice president Charlie Takeuchi.
“Michigan City has been our home since 1965. Since Hitachi acquired Sullair, our partnership and commitment to the local community has only grown," Takeuchi said. "We’re pleased to make local investments while ensuring we better serve our end customers.”
By identical 7-0 votes on Tuesday, the Common Council approved a pair of resolutions granting the tax abatements, allowed because Sullair is located within the Eastside Allocation TIF District.
The first resolution approved a tax abatement of a maximum of $16,200 for new machinery and equipment, with the exact amount to be determined by the Michigan Township Assessor, the county or the state. The tax abatement will be for a period of five years, with a maximum tax savings of $800,000.
The second resolution approves a deduction in assessed valuation of a maximum of $8.2 million for real property investments to be concluded by Dec. 31, 2020. The deduction is allowed for a period of seven years, with the exact amount to be determined by the assessor, county or state.
The tax abatements will allow the company to expand and improve reliability and retainment, he said. Plans include the upgrade, purchase and installation of machinery and equipment valued at $16.2 million.
And an 80,000-square-foot expansion for mixed assembly, manufacturing and inventory facilities "will also be constructed, valued at $8.2 million in real estate," Takeuchi said.
The approximately $30 million expansion, scheduled to break ground Friday, includes construction of a new 80,000-square-foot manufacturing building; a canopied storage building, and an additional parking lot for employees, according to Sullair spokeswoman Stephanie Roberts.
The project will also reconfigure and optimize portions of the existing, primary 280,000-square-foot manufacturing facility on the East Michigan Boulevard campus, she said.
"The expansion will allow Sullair to increase its manufacturing capacity and production of air compressors," Roberts said. "With that, the company anticipates adding more than 30 full-time jobs in Michigan City."
The Indiana Economic Development Corporation also offered Sullair up to $500,000 in conditional tax credits based on the company's job creation plans, Indiana Secretary of Commerce Jim Schellinger said. "These incentives are performance-based, meaning until Hoosiers are hired, the company is not eligible to claim incentives.
"The Hitachi Group’s decision to expand its Michigan City-based subsidiary Sullair continues a long trend of Japanese companies choosing Indiana for growth,” Schellinger said.
“As we work to strengthen Indiana’s global economy, we’re committed to building stronger relationships with long-term investors like the Hitachi Group, which is why we were pleased to meet with the company in Tokyo just last month. We're proud of our strong partnership with Japan, which now supports nearly 320 business facilities in Indiana, and look forward to more milestones ahead as companies like Sullair grow and create more career opportunities for Hoosiers.”
Sullair was founded in Michigan City in 1965 and has expanded into a broad international network to serve customers around the world. The company was one of the first to execute rotary screw technology in their air compressors and has produced one of the industry’s longest-lasting compressor fluids.
"At the Michigan City campus, Sullair produces compressors for construction and industrial applications in nearly every vertical," Roberts said. "The company also manufactures components such as air ends, used in oil and gas applications worldwide."
In July 2017, Sullair was purchased by Hitachi Group Company and is now part of the Hitachi Industrial Equipment Systems Co., Ltd. compressor portfolio.
“Following the acquisition of Sullair by Hitachi in 2017, our business has continued to grow both domestically and internationally," Takeuchi said. “To continue our aggressive growth in an increasingly competitive and consolidating space, we are making significant investments in Michigan City, providing us more flexibility in how we run our business.”
Mayor Ron Meer was thrilled to hear the news.
“I am very excited about the significant investment Sullair A Hitachi Group Company is making in our community," Meer said. "They are a global company which provides excellent employment opportunities.
"Sullair is a great community partner, and this expansion clearly demonstrates their commitment to Michigan City. My administration will continue to support their growth moving forward.”
“This is further evidence of our commitment to the Michigan City community and to making the necessary investments in the equipment and facilities needed to become a stronger air compressor manufacturer,” Takeuchi said. “We’re excited to break ground on the project and change the face of Sullair.”