CRE Midwest

Nippon Sharyo to build $54 million manufacturing facility

Nippon Sharyo Ltd. has announced a $54 million expansion of its passenger railcar factory in Rochelle. Nippon Sharyo will expand its Rochelle plant by adding a new building for metal fabrication and machining work.

Nippon Sharyo Ltd. has announced a $54 million expansion of its passenger railcar factory in Rochelle. Nippon Sharyo will expand its Rochelle plant by adding a new building for metal fabrication and machining work.

The company will start construction this spring, and plans to be in operation by spring 2014. The new 327,360-square-foot building, which will be located to the west of the existing building, will allow for a 68 percent expansion of the railcar factory, and an additional 80 jobs on top of the 250 the company created at the current factory.

“Today’s announcement means more manufacturing jobs for Illinois, and is proof that our Buy America program, requiring every rail component to be built in the U.S. by American workers, is making a difference,” U.S. Transportation Secretary Ray LaHood said. “We hope more companies will follow Nippon Sharyo’s lead expanding U.S. factories and hiring American workers to build the equipment we need for improved passenger rail, ensuring that the investments we make improve both the country’s transportation infrastructure and economy.”

This new expansion comes as the result of high demand for the company’s passenger-friendly rail cars that are designed to operate at speeds up to 125 miles per hour in all weather extremes. Nippon was awarded a $352 million Federal Railroad Administration contract to build 130 intercity passenger rail cars that will be delivered starting in 2015 for Illinois, Missouri, Michigan and California.

“We have hired great U.S. workers to be our mechanical assemblers, electrical assemblers and quality assurance inspectors. We now expect to find more great workers in the fields of welding and machining,” Nippon Sharyo Ltd. Chairman Katsuyuki Ikushima said. “This new shop will give our plant full circle production. Material, components and workers will be from the U.S. The entire train will be made right here, and the finished product will be used in the U.S.”

The Illinois Department of Commerce and Economic Development is providing a modest investment including Economic Development for a Growing Economy (EDGE) tax credits over 10 years and Employer Training Investment Program funds. The city of Rochelle received Community Development Assistance Program (CDAP) funds for water and sewer service to the factory, and has applied for additional CDAP funds to construct a dedicated electrical feeder line to supply power to the new factory building.

The Illinois Department of Transportation also provided $5.5 million for a “rail spur” to connect the BNSF Railway main line to the new factory, for which Nippon-Sharyo agreed to create 250 jobs and invest at least $35 million. The company has exceeded that agreement already, investing $50 million, with an additional $54 million to be invested for the factory expansion.