Zaki Bekheet, director of manufacturing, engineering and special projects for the company, says the downturn in the economy requires the company create its own supply routes. "This plant is going to provide room for our raw materials for Ogura's consumption. We'd rather buy our raw material from the inside, through vertical integration," Bekheet tells GlobeSt.com.
"Right now the pressure is very high by the automotive companies for suppliers to cut costs and make concessions. There's no other way for us to survive without buying from ourselves," Bekheet says. Detroit area automotive companies have posted decreased earnings for the third quarter and have told suppliers that orders will be slowing down.
Phase one of the new development will cost $26 million and will consist of a one-story manufacturing complex and a two-story office building. Bekheet said the company paid another $11 million for the land, 26 acres at the northwest corner of 25 Mile Road and Gratiot Avenue.
Shumizu America Corp. of Tokyo and Schonscheck Inc. of Wixom are handling the construction of the project, Bekheet says. The company is expected to employ 40 new jobs with the new plant.
Another phase of the property is planned involving an additional $19 million. When the next phase would begin is related to the health of the economy, Bekheet says. "We hope to have the first phase built and open in the spring. We had planned on working on the next expansion, on that land, right after the first phase was completed. However, if the slowdown persists, we might have to wait about six to eight months, or even into past January 2003." The second phase expansion plans haven't been worked out yet, but the additional building will be at least 100,000 sf.
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