Arctic Cat Announces New Engine Factory

Arctic Cat officials seeking the appropriate place for a new engine facility decided to leave the company's home territory in extreme northwestern Minnesota and build in the City of St. Cloud, about one hour northwest of Minneapolis.
Arctic Cat, Inc., based in Thief River Falls, Minn., plans to build the facility to manufacture its 650cc H1 engine.
The H1 currently powers the 650 H1 quad, and also will power the Prowler XT utility vehicle in 2006. The company sold 1,000 units of the H1 engine during the first quarter 2005, and anticipates sales to rise to 10,000 for the 2006 fiscal year and 20,000 in 2007.
Arctic Cat Chairman and CEO Christopher Twomey announced the plan Thursday at the Minnesota State Capitol alongside Gov. Tim Pawlenty, St. Cloud Mayor John Ellenbecker and Matt Kramer, commissioner of the state Department of Employment and Economic Development.
Arctic Cat anticipates the initial investment in the new facility and equipment to be approximately $8 million.
The company took advantage of local and state economic incentives, which include a 10-year, interest-free loan of $500,000 for the facility's development, provided by the Minnesota Investment Fund; local and state tax exemptions through 2015, if approved by the Minnesota Job Opportunity Building Zones (JOBZ) program; employee educational assistance through the Minnesota Job Skills Partnership Program; and local assistance in providing a location within St. Cloud's I-94 Business Park.
Plans call for a 56,000-square-foot manufacturing facility, which could be expanded in the future to 200,000 sq. ft. The facility will be located on a 15-acre site, near an additional 40-acre vehicle test track. Construction is slated to begin in 2006 and be completed around year-end, with the plant operational by 2007.
Arctic Cat initially expects to fill 50 new positions in St. Cloud, and could potentially employ up to 150 people at the site, once the new facility is fully operational. Company officials say the do not currently anticipate that the expansion in St. Cloud will affect employees at the Thief River Falls headquarters.

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