A plan to invest $35 million in a generator manufacturing company’s Mankato facilities will result in an estimated 128 new jobs, according to a summary of upcoming applications for state economic development grants.
Rolls-Royce Solutions America currently has 419 Mankato employees at its 107,000-square-foot manufacturing facility on Power Drive and is planning to expand that plant by 280,000 square feet. A portion of the $35 million investment will also be targeted at RRSA’s leased facility at 304 Lundin Drive.
Previous iterations of the plant were known as Katolight and then MTU Onsite Energy after it was purchased by a German firm, but it is now a subsidiary of Rolls-Royce plc, a descendent of the luxury car manufacturer headquartered in Derby, England.
The expansion plans were first reported by The Free Press in November when the company came to the City Council for the vacation of utility easements required for the expansion of the Power Drive plant. More details are now being revealed as the city prepares to hold a public hearing on a pair of applications to the Minnesota Department of Economic Development for grants to support the project.
“RRSA is requesting the City to participate in the project through submittal of a Minnesota Investment Fund (MIF) application and Job Creation Fund (JCF) application,” according to a memo to the council. “The MIF and JCF programs require the City be the applicant to the program and the City would be the conduit for the funding from the State of Minnesota to the business.”
The grant programs support retention and creation of high-paying jobs at technology, manufacturing, warehousing and distribution businesses.
“The amount of funding available under the MIF and JCF programs is determined by DEED for each project,” the memo stated. “The amount of assistance available is currently being determined in consultation with DEED.”
The upcoming investments in Mankato facilities by Rolls-Royce Solutions America include $30.5 million at 100 Power Drive and another $4.5 million at 304 Lundin Blvd.
“RRSA plans to create 103 new jobs over 3 years at the Power Drive location (50 direct jobs and 53 indirect jobs) and plans to create 25 new jobs in 2026 at the Lundin Boulevard location (25 direct jobs),” according to the council document. “The proposed wage and benefits for all direct and indirect jobs exceed the ‘livable’ wage requirements of the Economic Development Policy Guidelines. Direct jobs include production and logistics material handling staff and indirect jobs include office staff.”
A livable wage in 2024 for a family of four was $16.50 per hour, or just over $34,000 a year, under federal guidelines.
The company wasn’t willing to be interviewed about its plans at the moment, but the council memo provided a description suggesting some RRSA operations in Becker might be moving to Mankato as part of the expansion.
Rolls-Royce Solutions’ planned 280,000-square-foot expansion, shown to the right of its existing 109,000-square-foot Mankato plant in this rendering, will allow the company to consolidate its Minnesota operations while also expanding production capacity, according to a description of the project compiled as part of an economic development grant application
“Currently, RRSA has one production and office facility along with four leased warehouse locations (three located in Mankato and one located in Becker, Minnesota). Additionally, there is one leased facility in Mankato for engineering and R&D functions,” the memo stated. “RRSA plans to consolidate all the leased warehouse facilities into one central logistics and operations center. This would involve constructing a new approximately 280,000 square foot building to the south of the current production and office facility located at 100 Power Drive. This proposed facility will have all raw materials delivered to, unloaded in, and stored within until needed in the production facility to assemble an engine-generator set. There will also be storage and staging for the finished product to then be loaded and shipped to our customers.”
The existing Power Drive plant will receive equipment and building improvements as well and will be set up to produce “high-power range S4000 gensets.”
In addition, the project would relocate some production operations now housed at Power Drive to the Lundin Boulevard facility, according to the description. The Lundin facility would then be the focus of the company’s low-power range product, allowing for expanded capacity for both the low-power range and high-power range generator sets.
RRSA manufactures engine-generator sets with power ranges as low as 30 kilowatts and as high as 3.2 megawatts, according to the description.
A spokesperson for Rolls-Royce told The Free Press the company might provide more details on its plans for Mankato after the public hearing scheduled before the City Council on Monday.
“We are looking forward to working with the city as we make plans to expand our production capacities and capabilities here in Mankato,” according to the written statement. “The demand for our power generation systems, especially from the rapidly growing data center industry, is substantial. With the support of the city and state, we look forward to being able to make the necessary investments to meet that demand.”
