In what would become Mankato’s largest manufacturing facility, Rolls-Royce Solutions America is preparing to construct a 280,000-square-foot expansion to its production plant on the city’s east side.
Once known as Katolight, the manufacturer of powerful generators already has a 107,000-square-foot facility at 100 Power Drive. The new plant is to bring the total complex to nearly 400,000 square feet, not counting off-site facilities leased by the company.
“It’s an exciting project,” said Ryan Vesey, director of business development for Greater Mankato Growth, noting that the company contracts with numerous other local firms to supply generator components and services.
“It’s of strategic importance on a national scale, but also the impact it has on the supply chain …,” Vesey said. “So the expansion they’re looking to do there isn’t just going to impact those workers in that facility.”
Operating under the name MTU America, the local branch of Rolls-Royce Solutions at 100 and 110 Power Drive would move ahead of the 330,000-square-foot Johnson Outdoors complex at 121 Power Drive and the 323,000-square-foot Crown Cork And Seal plant on Chestnut Street among Mankato manufacturers. The Walmart distribution center, while not a manufacturer, is nearly 500,000 square feet and is in the early stages of its own expansion immediately east of MTU and Johnson Outdoors that will more than double its size.
MTU also uses other space in the community, including a 91,000-square-foot warehouse on Lundin Boulevard, and it’s not clear if the Power Drive expansion is partly intended to consolidate the company’s operations.
Attempts by The Free Press to reach the local MTU plant and a spokesperson for Rolls-Royce weren’t successful, so the precise construction schedule and the anticipated number of jobs to be created isn’t yet known.
At a meeting Tuesday night, the City Council vacated utility easements between the existing plant and the parcel to the south that will be home to the expansion. Community Development Director Mark Konz said that leaves application for a building permit as the last step required before construction commences.
The project comes four years after a previous MTU plant expansion was announced — a 29,000-square-foot addition to the 78,000-square-foot facility built by Katolight Corp. in 2001.
The earlier project was described as a $13.9 million investment by Rolls-Royce in its Mankato power generation manufacturing plant.
“The project is a result of growth in the market — 2019 was a record year for the Mankato facility — and demand for increased product offerings resulting in the need for updated facilities, equipment and processes to safely handle customer requirements,” according to the Oct. 13, 2020 news release.
The company said capacity at the plant would grow by 25% with the new assembly area focused on high-power MTU gas generator sets.
“This investment in our Mankato plant will help us to meet the growing demand for energy in the Americas with locally manufactured products,” Rolls-Royce Power Systems CEO Andreas Schell said at the time. “Mankato will thus become an even more important part of our worldwide production network in the future.”
The upcoming expansion will be nearly 10 times larger than the work completed in 2021, although it doesn’t appear to be adding new assembly lines like the previous project. An overhead cutaway graphic of the expansion plans provided to the city show the added space being used for storage, inspections and staging.
But an announcement by Rolls-Royce last year indicated the Mankato plant was about to get busier thanks to the company being selected to provide additional MTU generator sets for the U.S. Navy’s newest guided-missile frigates.
“Rolls-Royce has made significant investment at its production facilities in Aiken, S.C. and Mankato, Minn. to support the program and manufacture the gensets in the U.S.,” the company announced.
Transferring the technology and manufacturing capacity from Germany to the United States served the specific needs of the ship builders but was also meant to “better position us to compete for future government programs,” a Rolls-Royce executive said at the time.
Just last week, the company was unveiling new concepts for submarine power generators at a naval exhibition in Paris. The generators would be “based on the marine version of the mtu Series 4000,” according to an Oct. 30 press release, which is the same unit being assembled in Mankato and South Carolina for the navy frigates.
The 2020-21 expansion of the MTU site on Power Drive pushed the taxable market value of the parcel to nearly $8.5 million and generated annual property tax payments topping $224,000, according to Blue Earth County tax records.
The company’s workforce is not currently included on GMG’s voluntary list of top Mankato employers, but MTU has previously stated that it has more than 300 employees. As of this week, online job listings by MTU offered to pay new assembly line workers $18.10 to $27.15 per hour plus a $3,000 signing bonus and a full range of benefits. The salary range for an open “strategic buyer” position was $76,000 to $115,000 and for a “quality manager — key accounts” was $88,000 to $132,000.
Beyond the company’s direct contribution to employment and to driving the local supply chain, Vesey noted that Rolls-Royce has been a generous contributor to the community, including support for the Mankato Marathon and the United Way.
All of which is likely a relief to civic leaders who were worried when Katolight, which had been by a locally owned company for 55 years, was absorbed in 2007 by a firm headquartered in Friedrichshafen, Germany.
“A lot of times, you can get concerned when a business gets purchased by an out-of-town corporation,” Vesey said.
Instead, investment has been flowing into Mankato from outside the state and outside the nation as a result of the ownership change. A hint of what was to come arrived in 2014 when Rolls-Royce purchased 6.2 acres of vacant land next to its Mankato plant, even while announcing it had no current plans for expansion. A decade later, that parcel is about to be put to use.