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Sunday, 04 August 2013 21:47

Growth in manufacturing buoys Kalamazoo, Battle Creek economies

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Officials from Janesville Acoustics and its parent company, Jason Incorporated, participate in a ribbon cutting ceremony to celebrate the grand opening of Janesville Acoustics’ new facility in Battle Creek on July 16, 2013. Officials from Janesville Acoustics and its parent company, Jason Incorporated, participate in a ribbon cutting ceremony to celebrate the grand opening of Janesville Acoustics’ new facility in Battle Creek on July 16, 2013. COURTESY PHOTO

Manufacturing often gets the blame or the credit for Michigan’s economic situation, and the same could be said for the economy in Southwest Michigan.

Given the state’s improving fortunes and the rebound of the automotive industry — the supply chain for which dominates much of the region’s industrial base, it comes as no surprise that manufacturers in Kalamazoo and Battle Creek have been busy over the past year with expansions, capital expenditures for equipment and reinvestments in their plants.

Beyond the automotive sector, manufacturers in food processing, including craft brewing, and medical devices are also seeing increased demand, resulting in the construction of new facilities, expansions of existing infrastructure, and in some cases, hiring new employees.

A June 2013 report by George Erickcek, a senior analyst at the W.E. Upjohn Institute For Employment Research, shows some larger-than-expected employment gains across the region. Manufacturing employment grew by “a healthy 1.7 percent, a gain of nearly 200 jobs” in Battle Creek in the first quarter, Erickcek said, while noting that manufacturing grew less than 1 percent in Kalamazoo compared to the first quarter a year ago.

Over the past year, there have been dozens of new and ongoing manufacturing expansions in Calhoun County representing hundreds of millions of dollars worth of investment happening in the Battle Creek region.

Denso Manufacturing Michigan Inc., a supplier of air conditioning and engine cooling components, is in year one of a three-year, more than $100 million expansion at its Battle Creek manufacturing facility in the Fort Custer Industrial Park.

Stephen Milam, vice president of business planning for Denso, told MiBiz that the company has broken ground on its expansion and is beginning to implement two new manufacturing lines to build advanced thermal products such as radiators and condensers.

“We have a growing amount of business out of this building,” Milam said. “The focus becomes the efficiency of the plant.”

By the time Denso is done with the expansion, the company plans to add 266 jobs to the Battle Creek facility. Currently, Denso has more than 100 open positions it’s looking to fill with new workers.

Janesville Acoustics, a manufacturer of acoustic and thermal fiber insulation and molded fiber products, is another growing automotive supplier based at Fort Custer Industrial Park. The company in July held a grand opening on its $10 million investment at a 300,000-square-foot plant.

The expansion for Janesville Acoustics was done in part with a tax incentive valued at $1.5 million from the Michigan Economic Development Corp. (MEDC), as well as a 10-year property tax abatement. Battle Creek Unlimited, the local economic development group, helped the company get $140,000 for training and relocation assistance for employees.

Since announcing the project last August, Janesville Acoustics has hired 150 people and intends to add 75 more.

“(Battle Creek) is very business-friendly,” said Denso’s Milam, noting the city has worked hard to ramp up its manufacturing sector. “They work hard (on Fort Custer Industrial Park) to create an environment that attracts companies.”

The lure of the industrial park also proved attractive to Cosma Castings Michigan, a subsidiary of global auto supplier Magna International Inc. In February, Cosma announced that it had purchased the never-occupied manufacturing facility built by the now-defunct Energy Conversion Devices, the manufacturer of Uni-Solar building-integrated solar energy systems.

Energy Conversion Devices built the 268,000-square-foot manufacturing plant in 2008, but never moved into the facility as economic pressures in key markets and the general downturn in the global economy rocked the company, which filed for bankruptcy last year and was liquidated.

At the time of purchase, Cosma said it planned to bring nearly 600 jobs to the facility with an investment of more than $160 million over two or three years.

“Magna-Cosma is a company that has grown considerably in last three to four years and has done a good job securing business with automakers around the world. They’ve done well in Michigan, too,” Karl Dehn, president and CEO of Battle Creek Unlimited, told MiBiz at the time. “We anticipate the company is going to be a top-tier wage provider with high-quality jobs that require considerable skill.”

But it is not just legacy industries like automotive manufacturing that are experiencing growth and expansion. Michigan, long ago dubbed the “Third Coast” by craft beer aficionados, is seeing significant growth from two of the state’s premier breweries, as well as a handful of new upstarts.

Bell’s Brewery Inc., and Arcadia Brewing Co., based in Galesburg and Battle Creek, respectively, each have expansion plans underway.

Bell’s, the original craft brewer in Michigan since the mid-1980s and the seventh largest craft brewer in the United States, according to the Brewers Association, in 2011 completed a $3 million renovation and expansion on the Eccentric Cafe brewpub located just outside of downtown Kalamazoo.

The company has now turned its attention to a $12 million expansion of its production facilities in Comstock Township just east of Kalamazoo, where the company plans to add an additional 12,000 square feet for new equipment, including a canning line.

Earlier this year, Bell’s also announced two expansions outside of the region: a new pub at the Gerald R. Ford International Airport in Grand Rapids and a $2.5 million plan to open a new operation, Upper Hand Brewery, in Escanaba.

Meanwhile, Battle Creek’s Arcadia Ales broke ground last year on a second pub and brewing facility on riverfront property in Kalamazoo. The $6.2 million expansion is expected to add 30-40 new jobs.

Other manufacturing-related developments have involved a mix of legacy companies such as Stryker Corp. and operations that are new to the region, including Newell Rubbermaid Inc.

In February, the city of Portage awarded Stryker more than $5.5 million in tax breaks for investments at its research and development facility. The growth will reportedly allow for 18 new positions, each paying around $60,000 per year. The investment came even as the the company faced the uncertainty of operating in a new era of federal health care reform, which includes an excise tax on the medical devices Stryker manufactures.

The Atlanta, Ga.-based Newell Rubber-maid announced in March that it will move into a new design center built by Southwest Michigan First at Western Michigan University’s Business Technology and Research Park. The center will consolidate R&D functions for Newell Rubbermaid, which produces a wide range of commercial, consumer and household products, and should employ about 100 people, MiBiz previously reported.

Read 7686 times Last modified on Sunday, 04 August 2013 14:08

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