DESA Heating Products to Expand Bowling Green Facility, Move Production Back from China

FRANKFORT, Ky. (July 15, 2008) - Governor Steve Beshear today joined company and community officials in Bowling Green to announce DESA Heating Products, LLC is moving manufacturing production from China back to its Warren County facility. The shift in operations will expand the company's Bowling Green workforce and create a capital investment of over $6.4 million in the commonwealth.

"DESA Heating Product's decision to move production back to Kentucky is a strong indicator of evolving outsourcing trends in the global economy," said Gov. Beshear. "We are delighted DESA will expand its Bowling Green facility to accommodate the added production, resulting in a multi-million dollar investment and several hundred new employment opportunities for the south central Kentucky region."

"The Cabinet is pleased to work with DESA Heating Products and the Bowling Green community to make this expansion possible," said Economic Development Cabinet Secretary John Hindman. "Kentucky's central location, coupled with our logistical advantages and productive workforce, make it ideal for companies relying on shipping products to customers across the globe."

Over the last year DESA has begun bringing back a significant percentage of its manufacturing from China, due to changing times in the world economy. Factors such as the continuing rise in the cost of oil, the weakening of the U.S. dollar compared to foreign currency and the recent rise in wages for Chinese workers is making manufacturing in China no longer as economical as it once was.

The continuing spikes in the cost of oil are making transportation increasingly expensive, especially for larger, heavier products such as the consumer and professional heaters that DESA produces. Bowling Green's centralized location will not only allow DESA to save on transportation costs, but will expedite the shipping process. The company now can ship products to over half of the U.S. in about one day compared to the average six to eights weeks timeframe to ship from China.

"Bowling Green, Kentucky is an ideal location for DESA Heating Products' expansion because we are located within a day's drive of 70 percent of the U.S. population, we have a large labor base with whom we have a very solid relationship, and we enjoy a low overall cost of doing business here," said Claude Hayes, president of retail heating for DESA.

"Our production team has also made a great impact in helping us to reduce costs and produce superior quality," continued Hayes. "Our team expects quality, and that expectation has helped us raise the bar in producing the best quality products with the highest level of efficiency. Our sales team has now spread our product base to most major retailers."

DESA currently employs 450 Kentuckians at its 250,000 square-foot Bowling Green plant. The company will make improvements to its existing facility, as well as add building fixtures and new equipment to accommodate the expansion.

"Our superior relationship with our workforce has been integral to our decision to expand. The partnership we have with Sheet Metal Workers Local 433 has enabled us to focus on our total quality initiative and given us the advantage of having the most productive labor force for our type of products in the nation," added Hayes.

"I'm proud that Bowling Green-Warren County is home to DESA Heating Products, LLC, one of the world's leading manufacturers of heating products used in homes and at job sites across the globe," said Warren County Judge Executive Michael Buchanon. "This expansion is not just great because of the hundreds of jobs being brought back to Kentucky, but also because it demonstrates the quality of our workforce and how a dynamic company like DESA can successfully compete at an international level."

"Today is another great day in Bowling Green as DESA makes this announcement," said Bowling Green Mayor Elaine Walker. "They have played a major role in our community and have been a great corporate citizen throughout their tenure in Bowling Green. It's exciting to know that the only USA-manufactured line of heating products are made right here in Bowling Green, and that is a truly impressive statement about the quality of the product and the commitment of DESA to our region."