Uponor, a multinational maker of plumbing, heating and cooling systems, is expanding its Twin Cities manufacturing operations in an $18 million project at the company's North American headquarters in Apple Valley.

Renovating and expanding an existing building will add 88,000 square feet of manufacturing and office space to the campus of Uponor, Apple Valley's largest employer.

The additional space and manufacturing equipment the company plans to buy will help Uponor meet growing demand projected for Uponor's cross-linked polyethylene (PEX) tubing products in commercial and residential markets, said Bill Gray, president of Uponor North America.

The expansion will lead to the addition of "in the neighborhood of 100 new jobs" in the Twin Cities metro area over next two or three years, Gray said in an interview. The company, which has a distribution center and resin-processing center in Lakeville, has hired more than 130 employees over the past three years and has close to 500 in the Twin Cities. Parent company Uponor Group, headquartered in Finland, has 4,000 employees worldwide.

State, city incentives

To assist Uponor with the expansion, the state Department of Employment and Economic Development has made up to $1.5 million available through the Minnesota Investment Fund and the Job Creation Fund. The company also has requested a deferred loan of $800,000 from the Apple Valley Economic Development Authority and would receive $1.1 million over a nine-year period through a tax increment financing district. The City Council will conduct public hearings on the proposed incentives April 9.

Uponor studied available financial incentives and the logistics of expanding locally or in another state or country before deciding on Apple Valley, where it's had offices for 25 years, Gray said. Work on the expansion is to begin this spring and be complete by Dec. 1.

Gray said the decision to stay in Apple Valley took into account the available financial incentives, the proximity of the company's headquarters, and a "critical mass" of customers, suppliers and employees in the Twin Cities.

"It was really an all-in, all-things-considered decision," Gray said. "Incentives are always important because they change the return-on-investment formula. The important thing to remember is that they are only based on delivery of pre-agreed milestones" including the number of jobs the expansion creates.

Apple Valley Mayor Mary Hamann-Roland said she and other city officials went through a number of sleepless nights "to make sure that everything came together like clockwork so that Uponor could make the right decision."

"When you're competing with countries that are south of us, when you're competing with states that are south of us who have a different type of tax climate and incentive structures, it becomes disconcerting," Hamann-Roland said. "But in the end, it's about the whole decision. You have to look at all the aspects of the kind of investment that this kind of company is making."

Hamann-Roland said she hoped Uponor's decision to expand in Apple Valley would trigger additional development in the city.

"What I'm excited about is that Apple Valley has proven that we have the right people, the right resources, the right business climate and the right place to deliver a solid return on Uponor's investment," Hamann-Roland said. "I'm proud to say this innovative and forward-thinking, green company will continue to grow and thrive in the city of Apple Valley."

Uponor, first known as Wirsbo, got its start in 1620 in Sweden, making steel and weapons for the country's king. Today, the company produces plumbing, fire safety, radiant heating and cooling and hydronic piping systems for residential and commercial markets. Uponor is a publicly held company but its primary shareholders are long-term owners, Gray said.

Accommodating growth

The expansion should accommodate Uponor's growing production needs for the next two or three years, Gray said.

The company will remodel an existing 34,000-square-foot building and complete a 54,000-square-foot addition to it. Uponor bought the building in 2008, just before the recession and housing slump slowed demand for its residential products.

Uponor responded by expanding its business in commercial products for hospitality, institutional and multifamily buildings, Gray said. Residential sales began to rebound in the middle of 2012. "We're seeing significant growth in commercial and residential construction, and this expansion will ensure we match forecasted growth and demand for our PEX systems," Gray said in a statement.

"Uponor has been an outstanding job creator since opening its North American headquarters in Apple Valley in 1990," Katie Clark Sieben, commissioner of the Minnesota Department of Employment and Economic Development, said in a statement.

Todd Nelson is a freelance writer in Woodbury. His e-mail address is todd_nelson@mac.com.