Koyo Building $30 Million Plant Near Dallas

Koyo Steering Systems North America (USA, a subsidiary of Koyo Seiko Co. Ltd., Japan) will begin construction in February 2005 on a 240,000 square foot facility in Ennis, Texas, south of Dallas. When completed -- scheduled for October 2005 -- it will be Koyo's fourth steering facility in the United States, and sixth total, augmenting facilities in Vonore, Tennessee; Plymouth, Michigan; Roanoke, Virginia (all steering systems); Orangeburg, South Carolina (tapered roller and ball bearings, automotive hub units); and Blythewood, South Carolina (automotive hub units). With the Tennessee steering factory, which supplies Toyota's Georgetown, Kentucky plant, currently running at full capacity, Koyo sought additional manufacturing capacity closer to Toyota's newly announced truck plant in San Antonio, Texas. The $800 million Toyota plant is expected to come online sometime in mid-2006. Koyo said approximately 15% of its Ennis plant capacity is earmarked for Toyota San Antonio. But 85% of the plant's one million unit production of hydraulic and electric steering systems will go to existing customers such as General Motors, Honda, Mitsubishi, Isuzu and Subaru. When it is finished, Koyo's Ennis plant is expected to cost more than $30 million. Texas and local agencies offered significant incentives to entice Koyo -- including $333,000 from the Texas Enterprise Fund and $6.2 million in other incentives, on top of a seven-year, 75% property tax abatement. Koyo Steering Systems is a leading supplier of electric and electronic power steering systems.