Ultra Machining Co. hopes to build a 40,000-square-foot addition in Monticello, Minn., and add 60 new factory workers next year.

The company, which sent a letter of intent to Monticello city officials this month, now employs about 200 people making parts for the medical device and aerospace industry.

The proposed expansion site is next door to Ultra's existing 75,000-square-foot factory at 500 Chelsea Road East in Monticello.

Company officials said they are excited by the prospect of getting more manufacturing space, and noted that the city will be working on unspecified financial incentives to help support the development.

"Our current and future demand from key customers in the medical and aerospace industries are pushing the need to develop a new production facility to relieve capacity pressure at our existing site," said Jaci Dukowitz, chief operating officer of Ultra Machining (UMC) in a statement. The expansion — which will allow the company to modernize how it makes products, introduce new products and increase customers — "is an integral part of our next phase of growth."

Company owner and Chief Executive Don Tomann declined to disclose how much the project would cost or what city or state funds might be involved. A spokeswoman said more details should be available in September. The city of Monticello said it would be a multimillion-dollar effort.

The addition of a new facility in Monticello will create a campuslike setting for UMC, the 51-year-old manufacturer that uses high-precision robots, lathes and drills to convert chunks of steel into implantable spinal cages, knee replacement parts and other products that require exacting measurements. The company is one of the largest employers in Monticello.

If all the plans and financing are approved, construction could begin late this year or early in 2020, officials said. Over time, the structure could grow to 85,000 square feet.

But even the 40,000 square feet will provide breathing space for the company and allow it to be more efficient, the officials said.

Monticello City Administrator Jeff O'Neill said Monday that city officials "are thrilled to have UMC announce they are interested in expanding in our community. We look forward to working with them."

The city is in the process of acquiring the land adjacent to UMC's existing facility through a tax increment financing, or TIF, tax abatement that is being conducted through the state's Minnesota Investment Fund, O'Neill said.

"All parlayed together, [it should] help provide a great foundation for their expansion," he said.