Dow battery factory will have ripple effect on area's economy

by Eric English | The Saginaw News
Thursday August 06, 2009, 7:15 AM

MIDLAND - Construction of a huge new factory in Midland to make advanced batteries for the automotive industry will break ground in October or early November, a spokeswoman for the Dow Chemical Co. said Wednesday. When completed, the factory will employ an estimated 800 people.

"It's entirely our intention to move quickly on this, to get it up and operational and hire people as soon as possible," Dow spokeswoman Kristina Schnepf said Wednesday.

Dow will build the 800,000-square-foot factory as a joint venture with batterymaker Kokam America Inc., which currently produces batteries used in electric vehicles and by the military, Schnepf said.

The location of the factory will be on Dow property at the corner of Saginaw Street and Bay City Road, near the Genji restaurant in Midland.

Local leaders say the project will help the entire Great Lakes Bay Region's economy.

"The impact is going to be enormous," said JoAnn T. Crary, president of the economic development agency Saginaw Future Inc.

Dow officials were in Detroit on Wednesday to hear Vice President Joe Biden, who announced a $161 million Department of Energy grant to support the proposed battery venture between Dow and Kokam.

The grant was among $2.4 billion in federal dollars awarded for manufacturing and developing advanced batteries for electric vehicles.

The federal money was the last major piece of financing Dow and Kokam needed to start the estimated $665 million project. Dow and Kokam are putting in an amount at least equal to the federal money, Schnepf said.

The Michigan Economic Growth Authority previously approved about $145 million in tax credits for the joint venture. Crary said Saginaw Future worked with other area economic development groups to change state law and lift the $25 million limit on such state credits in order to get the larger amount approved for the Dow project.

The project is likely to create hundreds of construction jobs to build the factory, which Dow expects to be up and running by 2011. That's welcome news to Tom Ryder, president of the 2,000-member Tri-County Building and Construction Trades Council.

"We're very hopeful. We could really use the jobs," said Ryder, adding that each local trade union currently has about 30 percent of its work force unemployed. The Saginaw electrician's local, for example, has 48 of its 130 members out of work, he said.

Ryder said the Dow Kokam project would be the third big employment opportunity, after work at Hemlock Semiconductor in Saginaw County and a planned expansion of Consumers Energy's Karn-Weadock generating complex in Bay County.

Schnepf said Dow hasn't announced any contractors or a bidding process for the new factory. It also isn't taking job applications for people to work at the new plant; more information will be available as the project gets under way, she said.

"It's extremely exciting. This is a huge vote of confidence in Michigan companies, especially Dow," Schnepf said.

The new Dow Kokam factory would replace some of the 400 to 500 jobs Dow is cutting in the Midland area as part of staff reductions announced in 2008.

When completed, the plant will make up to 60,000 batteries a year for electric or hybrid electric vehicles.

"I applaud President Obama and the DOE for helping ensure the next generation of advanced battery technology is developed and built right here in America," said Andrew N. Liveris, Dow's chairman and chief executive officer.

"Dow is excited to begin using our expertise in chemistry to help overcome the technical challenges of developing and commercializing the next generation of advanced automotive batteries," he said.

Kokam America Inc. is based in Missouri and is the U.S. affiliate of South Korea-based Kokam Co.. The company makes a patented product called a Superior Lithium Polymer Battery. Kokam claims its product is one of the highest energy and power density batteries available.