Co-ops help HVAC manufacturer expand production

On its journey to become the No. 1 applied HVAC manufacturer in North America, Daikin Applied recently announced its intent to expand production capabilities with a new state-of-the-art, built-to-order manufacturing facility in southern Minnesota, north of Faribault.

Daikin selected Minnesota to host the $40 million project over competing sites in the southern United States and Mexico, due in part to infrastructure upgrade commitments made and financed through a partnership between the city of Faribault, Rice County and the Minnesota Department of Employment and Economic Development (DEED).

Great River Energy is also assisting in the project by covering Rice County’s portion of the financial investment through the first use of the cooperative’s new business expansion loan program. The program’s purpose is to facilitate commercial and industrial investment in areas served by Great River Energy’s member-owner cooperatives.

Troy Bussert and Jay Ugland assembled one of Daikin’s largest HVAC units in the Faribault plant.

Troy Bussert and Jay Ugland assembled one of Daikin’s largest HVAC units in the Faribault plant. Photo by Glen Stubbe, Star Tribune.

Through this program, Rice County will receive a $500,000 loan from Great River Energy, which is expected to fund nearly 18 percent of the infrastructure costs.

Great River Energy also helped the project locate in a facility served with reliable electricity by its member-owner cooperative Steele-Waseca Cooperative Electric.

Daikin Applied is a division of Japan-based Daikin Industries, the world’s top air conditioning company. As the global HVAC leader, Daikin Industries has more than 90 production bases around the world to meet the specific needs of regional world markets, including two successful U.S. plants in Faribault and Owatonna, Minn.

Daikin Industries’ executives and team members have recognized southern Minnesota as the best opportunity for the planned manufacturing facility, given the region’s skilled talent base and past achievements in designing and producing complex, highly specified equipment.

“Steele-Waseca Cooperative Electric would like to extend thanks to the economic development services staff at Great River Energy. Many hours of working with the city of Faribault, along with Met-Con, state and county officials, has brought this project to reality,” said Kim Huxford, operations division manager at Steele-Waseca Cooperative Electric. “Teamwork among these leaders was essential to provide Daikin Applied the opportunity to become an important part of our cooperative.”

Syd Briggs, general manager at the cooperative, noted that city sewer and water, incentive packages, reliable electricity and easy access to I-35 were all key components in Daikin Applied’s decision to expand in southern Minnesota.

“Our cooperative, the city and Rice County look forward to increased economic stability and job development with the addition of another Daikin location,” Briggs said. “We welcome them and are honored to be their electrical provider.”

Vice President and General Manager Will Fort leads operations at both Minnesota plants, and will spearhead the development of this new factory.

“We have grown our operation within the city of Faribault over 50 years. In 2000, we opened the Owatonna factory, and completed a major expansion there in 2014 to triple its size,” Fort said. “Our strong growth in recent years is the result of having highly skilled people in the plants, expert product design and marketing teams in our Plymouth headquarters, and the commitment from Daikin Industries to manufacturing excellence.”

Daikin Applied currently employs approximately 900 people in its factories in southern Minnesota.

The company engages prospective employees in the community through partnerships and company-funded vocational programs at local colleges and high schools, securing training grants with DEED, and continues to invest in internal people-centered development programs. The new factory is expected to add significant new employment opportunities to the community.

“We have some of our best people in Minnesota and Japan partnering on this important project,” said Daikin Applied CEO Mike Schwartz. “We’re also appreciating the cooperation and assistance of the civic leaders in St. Paul and southern Minnesota to help make this happen.”