By Joseph S. Pete, Daily Journal of Johnson County staff writer
A new factory in Franklin will supply Toyota and other automakers with plastic parts.
Premium Composite Technology North America eventually will employ 37 workers and is expected to start operations in the spring of 2010.
The $14.2 million investment should be a boost to a struggling local economy in which job losses have piled up, officials said.
The company will make plastic parts for the automotive industry, such as engine covers, intake manifolds, rearview mirrors and brake light cases. Major customers are expected to include Toyota, Honda and Nissan, as well as American automakers.
"It's great that they've decided to do business in Franklin, Indiana, especially in this economy," Mayor Fred Paris said. "I've been criticized for planning a trip to Japan, but this shows why you need to pursue foreign direct investment, especially in an economy like this. We've shed jobs, but we have new jobs coming in."
Toyota Tsusho Corp., its Kentucky-based North American subsidiary and Tokyo-based Sanyo Kaka Co., are investing in the joint venture. Toyota Tsusho, the sixth largest trading company in the world with sales of more than $60 billion, will own 80 percent of the newly created company directly and through its subsidiary.
The new company will make auto parts that currently are imported from Japan, company representative Makoto Iyoda said.
Honda, Toyota and other automakers currently import the plastic parts, but they wanted their suppliers to be closer to automotive plants in the United States.
"This project is a very important project to business in the future," Iyoda said. "We come to your city and look forward to growing with your city in the future."
Premium Composite Technology will serve as a first-tier supplier to automotive facilities, such as the Honda plant in Greensburg. The factory will be able to produce 30 million tons of plastic auto parts a year when at full capacity.
The company, which has been planning the project for three years, picked Franklin largely because of its strategic location and interstate access, Johnson County Development Corp. executive director Cheryl Morphew said.
The company will need to hire engineers, production workers, quality control supervisors and machine operators, she said.
Plans call for starting construction in June on a 64,115-square-foot facility in the Franklin Business Park, on the northeast corner of Musicland Drive and Graham Road.
Whether the project goes forward will depend on whether Premium Composite Technology gets tax incentives that would offset the initial investment of $14.2 million for land, a building and manufacturing equipment, attorney Mike Shopmeyer said.
"It's quite a capital investment in the city of Franklin," he said. "It's all new equipment being brought in and all new property tax base."
The Franklin Economic Development Commission approved property tax abatements that phase in taxes on the building and equipment over 10 years, as an incentive for the jobs created. The Indiana Economic Development Corp. is expected to provide work force training grants.
"This is great for the city," economic development commission president Sam Yount said. "We look forward to a long-lasting relationship."