MANKATO — A $24 million expansion of Rolls-Royce Solutions’ Mankato facility is now underway and, when it’s completed, will make the generator producer the city’s largest manufacturing plant.
Company officials said the expansion will allow Rolls-Royce to more than double production of backup power generation systems that are critical components of the growing number of data centers in the United States.
The planned expansion was first reported in The Free Press in November when documents filed with the city showed an expansion that would more than triple the 107,000 square foot plant at 100 Power Drive on Mankato’s eastern edge. When ground was broken on the project this month, Rolls-Royce said the 250,000 square foot addition would be a “Logistics Operations Center” that will lead to the eventual creation of more than 100 jobs.
“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 center industry,” the company announced. “… 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 name of the generator sets reflects part of the manufacturing facility’s changing ownership over several decades. Katolight Corp. built the original 78,000-square-foot facility on Power Drive in 2001. It was called MTU Onsite Energy after being purchased in 2007 by a firm based in Friedrichshafen, Germany. That company is now a division of Rolls-Royce plc, a descendent of the luxury car manufacturer headquartered in Derby, England.
Whatever the name, the investments in Mankato have been a constant. MTU added a 29,000-square-foot addition at a cost of nearly $14 million, as well as a research and development center in 2001. The expansion now underway will boost the facility to 357,000 square feet — moving it ahead of other large Mankato manufacturers such as the 330,000-square-foot Johnson Outdoors complex at 121 Power Drive and the 323,000-square-foot Crown Cork And Seal plant on Chestnut Street.
The mtu Series 4000 generator sets assembled in Mankato are powered by engines manufactured by a Rolls-Royce plant in Aiken, South Carolina, so an increase in engine production will be required and will lead to more jobs in Aiken, too.
“The U.S. market is very important to Rolls-Royce,” according to a written statement from CEO Tufan Erginbilgic. “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.”
Sales of power generation products to data centers grew nearly 50% in 2024, with much of the growth occurring in the United States, according to Rolls-Royce.
More than half of the world’s hyperscale data centers are located in the U.S. and as much as $1 trillion is expected to be spent on American AI data centers, components, and associated infrastructure in the coming years. The Mankato Logistics Operations Center is a reaction to that anticipated continuing growth.
“The LOC will provide additional capacity for both logistics and assembly operations for the Mankato plant, which exclusively manufactures power generation systems,” the company stated. “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.”
Rolls-Royce currently has 425 Mankato employees.