Basaran Grinder plans second factory in Hauppauge to meet demands of its AI customers

High demand for electricity to power the data centers behind artificial intelligence is leading a Hauppauge manufacturer to open a second factory.

Basaran Grinder Corp. makes grinding machines used to produce parts for the gas turbines found in power plants adjacent to AI data centers.

“Our machines are part of the AI transformation that’s going on,” said Murat Basaran, the company’s president and founder. “AI is fueling our growth.”

Basaran Grinder wants to buy a 30,000-square-foot building at 160 Oser Ave. and add a 25,000-square-foot extension to it. The company also plans to renovate its longtime home at 100 Laser Court, which is one mile away and 15,000 square feet.

The project’s total cost is $35 million.

Basaran Grinder’s request for $1.6 million in tax breaks over 10 years won preliminary approval from the Suffolk County Industrial Development Agency in June. Final approval could be granted at the agency’s Thursday meeting.

The incentive package consists of a sales-tax exemption of up to $577,500 on the purchase of construction materials, equipment and furnishings; up to $182,100 off the mortgage-recording tax, and property-tax savings of $796,970, or about 28%, for the two buildings over 10 years.

No one testified for or against the tax breaks at a July 20 public hearing.

IDA CEO Kelly Murphy told Newsday the agency “wants to help manufacturers to grow in Suffolk County and with the increased demand for Basaran [Grinder’s] machines, I think we’ll see a lot of growth from them in terms of employment and revenue.”

In return for the tax breaks, Basaran Grinder has promised to add at least six employees to its workforce of 23 employees within two years. The average salary of the new jobs would be between $90,000 and $100,000 per year, according to the company's application for IDA aid.

Basaran Grinder recently hired eight more engineers to address demand for its machines from customers, among them GE Vernova, Pratt & Whitney and Bell Helicopter, Murat Basaran, the company executive, said in an interview.

He started Basaran Grinder in 2004, though he said his family has been in the industry since 1982, originally importing machines from Germany and providing repair and maintenance services.

Basaran predicted there would be increased demand for the company’s grinding machines over the next five to 10 years because of AI and the need for components for new jet engines. “I cannot build them fast enough,” he told Newsday.

Basaran also said the proposed expansion would allow the company to make replacement components for gas turbines in need of reconditioning and to offer grinding services.

Basaran considered moving from New York to Indiana, North Carolina, Ohio and Texas, which offer “lower building costs, lower taxes, tax incentives and [a] skilled workforce,” the application states.

But Basaran said wants to stay in Hauppauge, where the family-owned business has been located for nearly 40 years, and near Smithtown High School, where he was recognized as a student in several national science competitions.

In 1998, Basaran was named a national winner in the Young Inventors and Creators Program of the National Inventive Thinking Association. Two years later, he was a semifinalist in the Intel Science Talent Search and admitted to the Massachusetts Institute of Technology.

Working with an MIT professor, Basaran developed his first grinding machine, which led to the start of Basaran Grinder after he graduated from college.

Today, the company has more than 400 machines installed around the world. It’s been making about 40 machines per year to meet the demands of AI.

“We’re very excited to be a part of [AI’s] growth and to be manufacturing on Long Island,” Basaran said.

By James T. Madore

james.madore@newsday.comJamesTMadore

James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.