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Global Manufacturer Secures Tax Incentives for Expansion In Massachusetts

January 18, 2012

Business Development Strategies, Inc. (BDS) the state's leading government incentives consulting firm, has recently assisted in securing a multi-million dollar package of government incentives for IPG Photonics Corporation, the world's leading manufacturer of high performance fiber lasers and amplifiers for diverse applications in various markets. The incentives package helps lay the foundation for IPG to stay and grow in Massachusetts and to continue its role as a high-powered engine of the Central Massachusetts economy.

The incentives package was negotiated and secured by BDS over the past 5 months and approved by the Massachusetts Economic Assistance Coordinating Council (EACC) in December. It includes $431,505 in tax increment financing (TIF) and $1,749,750 in investment tax credits (ITC). The incentives will be used to offset IPG's anticipated $18.1 million investment to construct an estimated 101,500 square foot on-site addition to its worldwide headquarters in Oxford, MA.

The nearly $2.2 million government incentives package will also allow IPG to retain 600 permanent full-time jobs and create approximately 175 new net permanent full-time jobs. This expansion is expected to increase IPG's annual corporate excise, payroll and sales tax payments to the state by more than 50 percent and to expand its spending on products and services from Massachusetts suppliers by 25 percent. As a result, IPG will remain a pillar of the state's manufacturing sector and a key contributor to the growth of the state, regional and local economies.

"Engaging BDS to secure government incentives proved to be a valuable strategy for IPG Photonics," says IPG Photonics Vice President, Treasurer and Controller Paolo Sinni. "The leadership style of BDS President Lynn Tokarczyk, combined with her team's experience and persistence, led to aggressive but achievable goals."

At a time when manufacturers are being consistently wooed by competitors from out-of-state and across the globe, IPG's decision to expand onsite attests to the value of doing business in Massachusetts. "With manufacturing and sales offices in 8 countries and customers around the world, IPG could have expanded anywhere," observes Tokarczyk. "The Company recognized that Massachusetts continues to offer a pro-business environment with the availability of highly skilled labor, connections to world-class colleges and universities, and efforts to reduce various business costs.

State Senator Richard T. Moore (Worcester & Norfolk), who represents Oxford and 13 surrounding communities, was instrumental in advocating for the IPG incentives package. He praised the IPG project and BDS's successful efforts. "I am pleased to have played a small role in helping to encourage state government to assist a great company like IPG Photonics to expand, adding urgently needed jobs and tax revenue for our region. IPG has proven that it is a responsible partner with state and local government in growing a solid economy based on 21st century jobs."

BDS's government relations expertise also proved invaluable, along with leadership from Senator Moore, in garnering support for a separate $2.2 million MassWorks infrastructure grant application to benefit IPG and other local businesses in the Towns of Oxford, Dudley and Webster.

"Managing risk and exceeding client expectations is BDS's mantra," Tokarczyk explains. "It is our goal for every BDS client."