Southern FluidPower already needed the $1 million facility it built on Bonny Oaks Drive, but Volkswagen’s decision to build its Chattanooga assembly plant nearby was “the icing on the cake,” the company’s president said.

Southern FluidPower Inc. is a distributor that sells hoses, fittings and other accessories for construction equipment, factories, food producers and other industrial uses, President Donny Davidson said. The 47-year-old company last month opened a 10,000-square-foot building at 4816 Bonny Oaks Drive.

Southern FluidPower already is selling hoses and fittings to contractors working on the Volkswagen site, said General Manager Nick Beason.

“Soon, we’ll support the suppliers,” he said.

The new building has better visibility and is 2.5 times larger than the previous facility nearby on Heritage Park Drive, Mr. Davidson said. The new building has more room for workers to assemble hose fittings, he said. And new equipment for hose production cost about $75,000, Mr. Beason said.

Southern FluidPower also has a storefront for its related retail operation, Parker Store, which will provide better customer service, he said.

“I think Volkswagen just helped our property values,” Mr. Davidson said. “Everything is worth something, but Volkswagen’s announcement helped escalate values.”

The move is the second for Southern FluidPower in four years, and hopefully the last for some time, Mr. Beason said.

The Chattanooga operation, with 16 workers, will add staff next year, Mr. Davidson said. At the end of 2008, Southern FluidPower’s Nashville store will move to a new, larger building, he said. A Knoxville location will open next year as well, said Mr. Davidson, a co-owner who works at the Chattanooga home office. His partners are Mark Baldwin, vice president of sales in Chattanooga, and Bill Muraske, vice president of sales in Nashville.

The company assembles hose fittings for Caterpillar, Komatsu and John Deere machines, as well as for a company in Brazil, Mr. Davidson said. The hoses are used for a variety of substances from air to hydraulic fluid to milk to paint to acid, he said. In the past, teenagers have even shopped there to buy hoses for their custom cars’ hydraulics systems, Mr. Beason said.

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