WATERVILLE -- Mid-State Machine Products, a manufacturing company that cut nearly a third of its workforce five years ago, has invested $13 million in the former Wyandotte Mill in an expansion that has doubled its sales and increased its payroll by $2 million.

The move ultimately will result in 70 new jobs at the Waterville site and 20 additional positions at the company's Verti Drive headquarters in Winslow, Mid-State President Alan D. Dorval said Thursday. Most positions will pay between $10 and $14 an hour, with a full benefits package. All of the jobs are full-time, Dorval said.

The precision machining company began production at the West River Road mill the last week of November.

"We are very excited," Dorval said. "This is a much different time than what we had five years ago."

Dorval said he expects Mid-State to have a workforce of close to 250 by year's end, more than 60 employees greater than the total the company boasted before its layoffs in 2002.

The key to the growth, Dorval said, is a contract Mid-State signed last August with Honeywell International to manufacture four engine components for the M1A1 and M1A2 Abrams Main Battle Tanks.

Mid-State already subcontracted with Honeywell before the latest deal but produced parts at a much smaller volume. The latest pact resulted after Honeywell won a $1.4 billion contract from the U.S. Army to head its Tank Engine Revitalization Program, Dorval said.

Dorval said Mid-State didn't have enough space, or a large enough force, at its Winslow factory to meet Honeywell's expanded need.

That led Mid-State to the former Wyandotte Mill, which offered 76,000 square feet of manufacturing space readily available and less than five miles away. Mid-State has signed a three-year lease for the property with options to stay four years longer.

Dorval said Mid-State also has talked to city officials in Waterville about the possibility of obtaining a tax break -- called tax increment financing, or TIF -- on the investment the company is putting into the mill.

Dana Berry, Mid-State's human resource manager, said the Waterville City Council is expected to consider the matter at its Feb. 20 meeting.

Waterville City Manager Michael J. Roy said he is delighted by Mid-State's expansion but of mixed opinion on its request for a tax break.

"This kind of economic growth is exactly what TIFs are supposed to support: job creation in the manufacturing sector," Roy said. "My concern is over the number of TIFs the city already has approved and the cumulative effect this will have over time."

Vital to Mid-State's expansion has been a partnership with Kennebec Valley Community College in Fairfield, through a state initiative known as the Maine Quality Center Training program, Berry said. The community college put together a program designed to produce the qualified entry-level workers that Mid-State needed to fuel its expansion plans.

Dorval said the growth also is part of a move by Mid-State to split its output into a custom-made shop in Winslow and a higher-volume, mass-production operation in Waterville.

That higher volume is possible, he said, because the machines at the mill are designed to manufacture one product, as opposed to the machinery at the Winslow site, which are designed to do multiple tasks.

While volume is higher in Waterville, the tank engine components produced are put through a sophisticated computerized inspection system to ensure they meet the standards demanded by Honeywell and the U.S. government, Dorval said.

Mid-State is no novice to manufacturing tank parts for the military. Dorval said Mid-State first began to produce such components more than 20 years ago, although the work at the time represented a much smaller percentage of its total business.

The effort to line up more work with the military sector began about five years ago, Dorval said, as part of a move to have a more diversified customer base.

In early 2002, Dorval said, 96 percent of Mid-State's business was with the power-generating industry. When that industry began to slow, the effect on Mid-State was devastating.

Today, Dorval said, Mid-State generates about 35 percent of its business from the power-generating sector. Defense contracts, meanwhile, represent about 50 percent of its business.

Dorval said the company also is working on gaining more contracts in the wind power industry and the oil and gas sector.

"My vision is to deal with four or five industries with one or two significant customers in each of those industries," he said.

Colin Hickey -- 861-9205

chickey@centralmaine.com