ROCHELLE, IL—Nippon Sharyo Ltd. announced Tuesday that it will build a $54 million new manufacturing building here at its passenger railcar factory.

The new building will be used for metal fabrication and machining work. Construction will start this spring, with completion planned by spring 2014. The new 327,360-sq.-ft. building, which will be located to the west of the existing building, will allow for a 68 percent expansion of the railcar factory.

“Today’s announcement means more manufacturing jobs for Illinois, and is proof that our Buy America program, requiring every rail component to be built in the United States by American workers, is making a difference,” said U.S. Transportation Secretary Ray LaHood at a press conference. “We hope more companies will follow Nippon Sharyo’s lead in expanding U.S. factories and hiring American workers to build the equipment we need for improved passenger rail, ensuring that the investments we make improve both the country’s transportation infrastructure and economy.”

This new expansion comes as the result of high demand for the company’s passenger-friendly rail cars that are designed to operate at speeds up to 125 miles per hour in all weather extremes. Nippon was awarded a $352 million Federal Railroad Administration contract to build 130 intercity passenger rail cars that will be delivered starting in 2015 for Illinois, Missouri, Michigan and California.

The state is providing a number of tax and infrastructure incentives in conjunction with the company’s investments.