$29 million — Cost of expansion at KTH Parts Industries
$6.7 million — cost of new research center
$18 million — Cost of new 3,000-ton servo press
33 — Number of new employees expected by December 2017
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 recovering auto industry affects their bottom line.
The St. Paris manufacturer KTH Parts Industries is moving ahead with a new $6.7 million research facility and finishing a major expansion as the company seeks to fend off increasing competition in the auto industry.
KTH Parts Industries produces auto body frame assemblies for Honda at its main local facility on Ohio 235. It is finalizing a roughly $29 million expansion that included adding about 28,000 square feet to its facility, as well as new equipment and an automated storage retrieval system. The Japanese-owned firm is also moving forward with plans to build a new $6.7 million research facility in Plain City that will employ 33 new workers by December 2017.
Both projects are critical to the company’s future as customers like Honda seek stronger, lightweight materials in order to meet tougher fuel efficiency standards by 2025, said Chris Millice, vice president of administration for KTH.
The company has faced increasing pressure from competitors who are also seeking to provide light-weight parts to Honda and other customers as the auto industry has seen a surge in demand. KTH has 926 full-time employees and about 200 more temporary workers, and Millice said the new facility is necessary to ensure KTH can maintain those jobs moving forward.
“We need new technology to be able to stay competitive with the other people out there,” Millice said.
Automakers industry-wide are looking for better technology and lightweight parts, said Mike Wall, an auto analyst for IHS Automotive. Investing in a research facility can help a supplier like KTH ensure its long-term stability and stay ahead of its competitors.
“Honda is probably one of the leaders in terms of really diversifying their supply chain or looking outside their tried and true supply chain,” Wall said. “It doesn’t mean they’re going to drop any of their suppliers on a whim but they’re very open to exploring some of those opportunities.”
The research facility, located on about 15 acres of land along Ohio 33 in Plain City, could be completed by October or December this year. Researchers at the site will investigate composite materials and new technologies to join different materials together to make lighter parts, among other projects. Work will could also help company officials improve manufacturing processes that are already in place for current parts, said Art Liming, executive vice president and plant manager at KTH.
KTH produces enough auto parts to make as many as 4,000 vehicles a day. The company is based in St. Paris, but also has facilities in Kalida, Ohio; Leesburg, Alabama, and Shelburne, Ontarion, Canada. Combined, KTH employs more than 2,500 workers at its facilities.
“With the research and development, we need to look at our internal processes and what things aren’t working as well here,” Liming said.
On Thursday, work crews at KTH were finishing installation of a new $18 million servo press that was part of the overall expansion. The 3,000-ton press is designed to handle higher strength material needed to produce strong, light-weight parts. The company also invested about $6.7 million in a new automated retrieval system that will help store and quickly ship auto parts.
Auto makers like Honda are able to improve fuel efficiency in part by improving powertrain technology including engine and transmission components, Wall said. But lighter auto bodies are also critical to meeting a requirement of 54.5 miles per gallon by 2025, he said.
“The automakers of all shapes and sizes are focusing in on that like a laser,” Wall said.
Honda fell just shy of a company record for annual sales in 2014, after it reported sales of more than 1.5 million vehicles last year. The figure was the second best in its history falling just short of a mark set in 2007.
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