Rolls-Royce has announced a $24 million US investment that will more than double production of back-up power generation systems for data centres and create more than 100 new jobs in America. The investment includes a new 250,000ft
2 Logistics Operations Centre (LOC) located adjacent to the company’s existing manufacturing facility in Mankato, Minnesota. It will enable Rolls-Royce to increase production capacity for its mtu Series 4000 generator sets, which are in high demand from the rapidly growing data centre industry.
This latest investment builds on the more than $1 billion Rolls-Royce has invested in the USA over the past decade. Rolls-Royce’s CEO Tufan Erginbilgic said: “The US market is very important to Rolls-Royce. We have a proud history in America and we are committed to strengthening our presence to support further growth, bringing economic benefits and job opportunities. This announcement is proof of the transformation of Rolls-Royce in action, enabling us to invest in areas of strategic focus, such as power generation.”
Rolls-Royce anticipates production at the Minnesota facility will increase by more than 120% by 2026 as compared to last year, with further growth expected in the future. The LOC is expected to become operational next spring, with new jobs created over the next three years.
The generator sets use mtu Series 4000 engines that are currently built at the Rolls-Royce facility in Aiken, South Carolina. The Aiken facility is also expected to see an increase in engine production, resulting in a further increase in headcount to keep up with demand.
Strategic ambitionsThis investment supports the strategic ambitions of Rolls-Royce to profitably grow the power generation operations of its Power Systems division. Last year sales of power generation products for the data centre segment grew almost 50%. The US leads the data centre market, with more than half of the world’s hyperscale data centres located in the country. As much as $1 trillion is expected to be spent in the USA on AI (artificial intelligence) data centres, components, and associated infrastructure over the next few years.
Joerg Stratmann, Rolls-Royce’s CEO of Power Systems, said: “Our hyperscale data centre customers have relied on our solutions and partnership for mission-critical power for over 15 years – a result of our strategic focus and continuous investment in this sector. This deliberate market positioning has enabled us to effectively address the exponential rise in demand from the data centre industry, particularly in the USA where this critical new infrastructure will be built.”
The LOC will provide additional capacity for both logistics and assembly operations for the Mankato plant, which exclusively manufactures power generation systems. It also supports the company’s firm commitment to safety by allowing all logistics and assembly activities to be conducted in climate-controlled environments, even with the significant increase in throughput. The LOC offers the development of future capacity and capabilities as the energy landscape continues to evolve.
Since acquiring the business in 2007, Rolls-Royce has continued to invest in its manufacturing operations at its Mankato site, most recently completing a $13.9 million expansion of the main manufacturing site and the addition of a research and development centre in 2021.