Franklin gives tax breaks to two Japanese manufacturing companies

By CANDACE BEATY, Daily Journal of Johnson County Staff writer

Two Japanese manufacturing companies plan to build or expand Franklin facilities and hire employees within two years.

KYB Manufacturing and Nishina Industrial Co. received tax breaks from the city that will trim the costs of the project.

Nishina, a hydraulics manufacturer, wants to build its first plant outside Japan in Franklin. The company asked for tax breaks for $12 million in equipment and for construction of the $5 million building.

The company makes equipment for vehicles and construction equipment. Toyota is one of its customers.

Nishina will hire about 32 employees by 2009.

KYB Manufacturing will build a $16 million, 264,000-square-foot expansion at its U.S. 31 location. The company will also purchase $8 million in equipment.

KYB employs 660 people to make shocks and struts for auto companies such as Toyota and Honda. The expansion will add 51 jobs and more than double the size of its facility. Most of the jobs will be manufacturing positions, with some support and professional positions.

The 10-year tax deal will allow the company to forgo tax bills on the equipment and building for the first year and then gradually begin paying taxes during the next nine years, until the full bill is paid in the 10th year.

Nishina will save an estimated $500,000 over the 10-year period, said Chris Felts, the company's legal counselor. Felts works for law firm Barnes & Thornburg of Indianapolis.

The tax abatement will save KYB about $1.25 million over 10 years, according to company documents.

The KYB expansion should be completed by spring 2008, president David Billingsley said.

The Franklin City Council unanimously approved the 10-year tax breaks for Nishina Industrial Co. and KYB Manufacturing on Monday night.

Both companies requested a speedy decision, and the council approved the requests during its first discussion. Usually, a new agenda item would be introduced to the council and final votes would wait until the next meeting.

The Economic Development Commission supported the tax breaks, director Joe Csikos said.

The company plans to purchase land before the end of the year, Felts said. Nishina is considering a 25-acre site on Musicland Drive, said Cheryl Morphew, Johnson County Development Corp. director.

The company was likely waiting for local incentives such as tax break before making final decisions, she said.