Sakthi Automotive Group USA Inc Planning $31.9M Expansion

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Image Source: Crainsdetroit.com
Image Source: Crainsdetroit.com
Image Source: Crainsdetroit.com

Sakthi Automotive Group USA Inc. is planning a $31.9 million expansion for its plant on West Fort Street in Detroit, Michigan. The project, which is supported by a $3.5 million performance-based grant from the Michigan Strategic Fund, is expected to create 350 new jobs, the Michigan Economic Development Corp. said Tuesday in a news release. The current workforce is around 200 at this time.

The company, according to state officials, chose the grant over offers of free land, training grants and low-interest construction loans dangled by other states including Ohio, Georgia and South Carolina. The investment and new jobs are expected by 2020.

The state funds will be used to help offset the higher operating costs than other states, interior site conditions, and need to locate, hire and retain a skilled workforce for its facility in Detroit, according to documents from the MSF approval of state incentives.

Sakthi, a subsidiary of India conglomerate Sakthi Group, is expanding to produce aluminum castings. Sakthi plans to shift 90 percent of its aluminum castings work, which is currently done oversees, to its Detroit plant.

The city of Detroit is also planning to recommend a Renaissance Zone tax exemption for the expansion, as well as a property tax abatement.

The auto supplier received a $1.5 million grant in 2012 to establish the Detroit location, which is a former ArvinMeritor plant. The state will make the final payout for that grant in June, the MEDC said.

Sakthi acquired the plant for $7.6 million, according to commercial real estate website CoStar.

Separate from the current expansion, Sakthi plans to reuse several other vacant buildings near its Detroit site, including the purchase of the former Southwestern High School through a joint venture, the MEDC said in a memo to the MSF board.