Dometic Ramping Up Refrigerator Production
Elkhart, Ind.-based Dometic LLC is making progress on its $10 million expansion in northern Indiana to manufacture refrigerators for the RV and marine markets. RVBUSINESS.com toured the plant recently, some five months after the Elkhart City Council voted unanimously to approve a 10-year tax abatement and incentive package for the project, which will consist of four new refrigerator assembly lines and a cooling unit manufacturing operation in what was a vacant warehouse at the Sweden-based company’s east-side Elkhart facility.
The Indiana Economic Development Corp. offered Dometic LLC up to $1.1 million in performance-based tax credits and up to $320,000 in training grants across two projects based on the company’s job-creation plans.
Dometic LLC President Doug Whyte in early August joined Ind. Gov. Mitch Daniels in announcing a $10 million expansion — welcome news for an industry beset at that time by the worst of the 2008-09 recession.
Now, a half-year later, Dometic has hired and trained 52 people — of the total 241 to be hired by 2012 — for assembly of six-cubic-foot units a day on the first of four new production lines in this massive facility on Elkhart’s Industrial Parkway.
The $10 million investment includes more than $6.8 million to move its refrigerator manufacturing operations from Sweden to Elkhart and $3 million to move production from a plant in Mexico, which was lost by fire in April, to Dometic’s LaGrange, Ind., facility, where it will increase manufacturing capacity of retractable awnings, creating 116 new jobs. Eighty people already are at work at the LaGrange facility.
The first two production lines in the Elkhart facility are high-volume refrigerator assembly lines; the third and fourth lines will assemble side-by-side, Elite 2+2 and other Classic-model refrigerators. These larger refrigerators will measure from eight cubic feet up to 14 cubic feet.
Dometic chose to relocate refrigerator production from Sweden to Elkhart rather than China or Mexico — where labors costs would have been far less — in order to be closer to its customer base: 70% of Dometic’s customers are located within 50 miles of Elkhart, explained Whyte.
The move to northern Indiana also improves response times as well as opportunities for customer-specific product development, Whyte noted.
As for the specifics of the project, workers in December began tearing up the asphalt floor in a 100,000-square-foot warehouse on the Dometic campus to make way for a new 8-inch-thick concrete floor requiring 280 truckloads of concrete. The old floor was too weak to support the heavy equipment in the new cooling-unit manufacturing plant.
Concrete work should be finished by the end of February, with equipment installation in May and June, according to Jim Menefee, director of operations.
Some 35 sophisticated, highly automated robotic stations will be installed for cooling-unit manufacturing, which should be operational by July. This facility will be a major energy consumer, making it one of the major electrical customers of American Electric Power Co. in northern Indiana, Menefee noted.
When complete, total space for the new Dometic operations will be about 5 1/2 acres with 100,000 square feet for the cooling-unit manufacturing and 150,000 square feet for refrigerator assembly.
This expansion includes a state-of-the-art test “oven,” an incubator-like laboratory which is kept at a constant 95 degrees to test the efficiency of the finished refrigerators over a six-hour period. Dometic has installed two 4,000-gallon tanks that tower over the refrigerator production area and a $500,000 safety-management system that monitors and regulates the flow of the highly volatile chemicals used in the manufacturing process. Outside, a 9,200-gallon tank, submerged in a thick concrete vault, stores the most volatile of the foam-making chemicals.
Because the new production operation has usurped all of the pre-existing warehouse space, Dometic has leased a 125,000-square-foot warehouse in nearby Goshen, conveniently located near two of its major RV customers.