Korean auto supplier plans to expand local presence with Franklin facility

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South Korea-based automotive supplier Daechang Seat Co. Ltd. USA, which has its U.S. headquarters in Indianapolis, plans to expand its local presence by opening a $30 million facility in Franklin that would employ 100 people.

Daechang, established in South Korea in 1979, makes seat frames for automakers Kia, Hyundai and Subaru.  The company’s Indianapolis site, at 8150 Woodland Drive on the city’s northwest side, opened in 2017. It has about 180 employees.

An Alabama facility followed in 2019. The Franklin site will be its third in the United States.

Mark Kim, general manager at Daechang’s Indianapolis facility, said the company needs the new facility so it can start doing its own metal stamping. “We have been importing those metal stamping parts and we will bring those parts in-house and manufacture locally to increase our efficiency,” Kim told IBJ via email.

Kim said the company chose Franklin in part because of its existing manufacturing infrastructure. Another consideration, he said, is that many of the company’s existing employees currently live on the south side of Indianapolis.

Daechang has applied to the city of Franklin for tax breaks for the project. According to the application, the company plans to build a 250,000-square-foot building on a 25-acre site on Linville Way, just east of Graham Road near the Johnson County Animal Shelter. The project investment includes a $15 million building and $15 million worth of equipment and other personal property.

Kim said the company plans to start construction in the third quarter, and the plant should be operational in September or October of next year.

In a timeline submitted as part of its incentives application, the company said it expects to hire its first 25 people at the Franklin site at the end of next year, with all 100 jobs filled by the end of 2024. The average wage for the jobs will be $17.50 per hour, which includes 10 managers with average wages of $28.30 per hour and 90 production workers with average wages of $16.30 per hour. Johnson County’s average wage among all industries in 2020 was $19.30.

Daechang is asking the city for a 10-year real property tax abatement and a five-year personal property tax abatement.

The 10-year real property abatement would save the company $1.97 million in taxes, but it would still pay $2.57 million in taxes over that period.

The 5-year personal property abatement would save the company $538,000 in taxes, although it would still pay $362,000 in taxes over that period.

“DSC [Daechang] has conducted a multi-state search, and Franklin’s offer of tax abatement assistance was a large factor in making the site decision,” the company said in its application.

Franklin’s Redevelopment Commission has approved Daechang’s incentives request, and the application will next go before Franklin’s city council for final approval on June 21.

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