A longtime Malden-based manufacturer is moving its headquarters to a larger facility in Lawrence with the support of state and local tax incentives.
Asahi/America is investing $17.5 million to purchase and overhaul a 170,000-square-foot building in the Lawrence Industrial Park off Interstate 93, with plans to move all of its Malden operations to the new facility in October.
The state’s Economic Assistance Coordinating Council recently approved that project and nine others to receive a local tax break, a state investment tax credit, or both. The state’s Economic Development Incentive Program allows for such tax incentives to help spur job creation and business growth.
The move by Asahi/America, a manufacturer of thermoplastic pipes and valves, will bring 125 jobs to Lawrence, including the 100 currently in Malden and 25 the firm has committed to create over time in return for the tax incentives.
“We are so thrilled that they are coming,” Lawrence Mayor Daniel Rivera said. “As we try to make Lawrence safer and better for business, it’s good to have an anchor company like them come to the city.”
Lawrence has agreed to exempt the firm from taxes over 10 years on part of the increased value of the property resulting from the investment. The exemption starts at 100 percent the first year and declines to 10 percent the final year, or $272,001 in overall tax relief.
During those years, the project will provide the city approximately $250,000 in net additional tax revenues, according to Abel Vargas, Lawrence’s business development director.
The state is providing Asahi/America another $375,000 in investment tax credits.
“It’s a very exciting time for the company,” said Stephen Harrington, the firm’s chief financial officer, calling the expansion and move “the beginning of the next chapter of Asahi/America. We are very grateful to the mayor of Lawrence for being so cooperative with us. Lawrence has been a very welcoming city for our business.”
A wholly owned subsidiary of the Japanese firm Asahi Organic Chemicals, Asahi/America imports raw and finished products from its parent company and assembles and adds to them at its approximately 100,000-square-foot Malden plant at 35 Green St.
The resulting pipe and valve products are sold to distributors, who in turn sell them to users in the United States and South America. Those range from firms in the semi-conductor and chemical industries to water parks and aquariums, including New England Aquarium in Boston, which purchased them for the overhaul of its giant ocean tank last year.
Asahi/America originated in 1971 as a division of Utilities Supply Corp., serving as a distributor for Asahi Organic Chemicals. In 1977, the division became a separate corporation, and in 1999, it was acquired by Tokyo-based Asashi.
Since its beginning, Asahi/America has operated solely out of the Malden facility, which provides space for its offices and operations. In addition to the 100 or so employees at the plant, there are about 20 sales agents across the country who work out of their homes.
“The company is growing and our operations need more space — more inventory space, more production space. We are outgrowing our building,” Harrington said.
The firm first looked at expanding on site but determined that too expensive. It then searched for a suitable facility to purchase in the Malden area — building new was ruled out due to the cost. When it was not able to find a site, the firm expanded the search.
“We are sorry to see a longstanding business like Asahi/America relocate outside of Malden, but we could not accommodate their need for additional space,” Malden Mayor Gary Christenson said by e-mail.
“My office is working on bringing a new business to that location that will have tremendous appeal to residents as well as bring in more jobs,” he said.
Located at 655 Andover St. near the Andover line, the Lawrence building was constructed in 1997. It served as a supply and distribution center for Corporate Express and later for Staples, which acquired the firm in 2008. Staples closed the facility about two years ago. Another company for a time leased one of the floors but the building has been otherwise idle.
Asahi/America purchased the property for $11.5 million in March.
The overall $17.5 million project includes that acquisition cost and the expenses involved in relocation and in retrofitting and renovating the building interior. Construction began in June.
“The building is perfect for us,” Harrington said. “We were looking for an additional 50,000 square feet. We have an additional 70,000.” He said the building is also “literally five minutes off the highway” and as a former supply and distribution center offers facilities – including truck bays and high ceilings — that meet the needs of his growing business.
Harrington said all the existing employees are encouraged to remain with the company, but he acknowledged some may not do so because of the length of the commute. He said the company is encouraging car pooling.
Vargas said Asahi/America’s decision to move to Lawrence is a significant boost for the city. “When we talk about these economic [incentive] agreements, manufacturing jobs are the gold standard. It’s really what we hope to bring to the city. And the types of jobs at Asahi/America offers are huge because they run the gamut as far as skill sets,” he said.
Vargas said the decision will also help Lawrence build a reputation as a welcoming place for businesses.
“We understand businesses are the ones taking the risk and putting up the money, but our job as the municipality is to do what we can to make the process of moving to the city as seamless as possible,” he said.