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How Do I Budget a Light Manufacturing Buildout?

📖 1,971 words🗓️ Published Jun 23, 2026

Direct Answer

Budget $45 to $95 per square foot for a light manufacturing buildout inside an existing industrial shell, with most assembly, packaging, and light-fabrication projects landing around $60 per square foot once you account for upgraded power, floor reinforcement, and a 10–15% office/admin component. For a 30,000 SF facility that is roughly $1.35M to $2.85M in hard construction, before equipment and machinery. The single biggest money move is to find a second-generation industrial building that already has the power, clear height, and dock doors you need, because the most expensive line items in any manufacturing buildout — bringing in three-phase 480V power, upgrading the electrical service, and pouring or reinforcing slab — can each run six figures and are nearly free if the prior tenant already paid for them.

The second money move: pin down your power requirement in amps and voltage before you tour buildings, then only look at buildings that already have it. A service upgrade from 400A to 2,000A of 480V three-phase can cost $80,000 to $300,000+ and take 3–9 months of utility lead time. Walking into a building that already has the service is the difference between opening in 90 days and opening in nine months.

Build the Budget Around Power, Floor, and Air

Light manufacturing buildouts are dominated by four systems that ordinary office buildouts barely touch:

Electrical service and distribution: $15–$35/SF. This is your number-one cost. Map every machine's full-load amps, add 25% for future capacity, and size the service. Budget for a new switchgear, panels, transformers, and bus duct or conduit runs to equipment. Three-phase 480V is standard for most industrial equipment; confirm the building has it.
Concrete slab and floor flatness: $6–$18/SF if work is needed. Heavy equipment, forklifts, and racking demand a minimum 6-inch slab at 4,000 psi; precision equipment may need thicker. Cutting in trenches for utilities or pouring equipment pads adds cost fast.
HVAC and ventilation: $8–$22/SF. Beyond comfort cooling, you may need process exhaust, makeup air, fume extraction, or dust collection depending on what you make. A spray or welding operation needs far more than a simple assembly line.
Compressed air, gas, and process plumbing: $3–$12/SF. Compressed air piping, drops to each station, and any process gas or water lines.

Match the Shell to the Spec — Don't Pay to Fix the Building

The cheapest manufacturing buildout is the one where the building already fits the operation. Before you sign, verify these against your process spec, because retrofitting any of them is expensive:

Clear height: 18–24 ft is typical for light manufacturing; more if you rack vertically. Adding height is impossible — you move buildings instead.
Power: voltage, phase, and available amperage at the panel (not just the meter).
Dock doors and grade-level doors: count and size for your inbound/outbound flow. Adding a dock door means cutting a tilt-up wall — $15,000–$40,000 each.
Floor load rating: confirm the slab's psf rating supports your heaviest equipment and racking.
Fire suppression: light hazard sprinklers may be inadequate; ESFR or in-rack sprinklers for your commodity class can cost $3–$8/SF to upgrade.

How Not to Get Screwed by the Landlord or Contractor

Industrial leases are where landlords quietly push capital costs onto tenants. Protect yourself:

Get the power upgrade in the landlord's column or as TI. A 2,000A service upgrade benefits the building forever, not just you. Negotiate the landlord to fund it or roll it into a TI allowance of $20–$50/SF. On a 7-year lease for 30,000 SF, the landlord's rent stream easily justifies it.
Nail down who owns improvements at lease end. Slab reinforcement, electrical service, and dust collection are often landlord-owned fixtures at expiration — but a restoration clause can force you to *rip them out* and restore the building at your cost. Strike or cap restoration obligations; that clause has surprised tenants with $50,000–$200,000 move-out bills.
Competitively bid the GC and the electrical sub separately. Electrical is your biggest line; do not let the GC mark it up 20% inside a lump sum. Bid the electrical contractor directly and get three bids, with a not-to-exceed cap.
Control change orders. Industrial work uncovers surprises — buried utilities, undersized risers, soil conditions under new pads. Require written pre-approval and capped markup (10–15%) on all changes.
Verify utility lead times in writing. If the build depends on a utility transformer upgrade, get the utility's written timeline before committing. A delayed transformer can idle a finished building for months while you pay rent.

Phase Equipment Spend and Hold a Real Contingency

Separate building buildout from equipment/machinery in your budget — they are different capital pools with different financing. Machinery is often better financed or leased (equipment loans, Section 179 depreciation) than rolled into the buildout. Buy production equipment on a ramp schedule tied to demand, not all at once.

Hold a 12–18% contingency. Industrial retrofits in older buildings surface hazardous materials, code-triggered upgrades (ADA, fire, accessibility), and utility surprises. On a $2M buildout that contingency is $240,000–$360,000, and process facilities use more of it than office jobs do.

flowchart TD A[Light Mfg Buildout Budget] --> B["Electrical Service + Distribution 25-35%"] A --> C["HVAC + Ventilation/Exhaust 12-20%"] A --> D["Slab/Floor Work 8-15%"] A --> E["Office/Admin Fit-Out 10-15%"] A --> F["Compressed Air + Process Utilities 5-10%"] A --> G["Soft Costs + Contingency 12-18%"] B --> H[480V 3-phase, switchgear, panels] C --> I[Process exhaust, dust collection] D --> J[6 in min @ 4000 psi, equipment pads]

flowchart LR A["Define process spec: power, height, floor load"] --> B[Tour only matching shells] B --> C{Building already has power + height?} C -->|Yes| D[Lower cost, faster open] C -->|No| E[Negotiate landlord-funded upgrade or walk] D --> F[Bid GC + electrical separately, NTE cap] E --> F F --> G[Permit, utility coordination, construct] G --> H[Inspections, equipment install, startup]

Related on PULSE

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[Do I Need a Fractional CRO for My Manufacturing Company?](/knowledge/q15653)
[How Many Sales Reps Do I Need to Hire for My Manufacturing Company?](/knowledge/q15570)
[Given the 2027 trend of vendor consolidation, how are mid-market manufacturing firms reducing their RevOps tech stack from 15+ tools to fewer than 5, and which categories (e.g., CDP, MAP, CRM) are being eliminated first?](/knowledge/q13503)
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Hidden Infrastructure Costs That Blow Budgets

Beyond obvious line items like flooring and electrical, light manufacturing buildouts often face surprise costs from process-specific infrastructure. For example, compressed air systems (dryers, piping, filtration) typically run $8,000 to $25,000 for a modest 30,000 SF shop, while process water or wastewater treatment can add $15,000 to $60,000 depending on local discharge regulations. Dust collection, fume extraction, or temperature/humidity control for sensitive materials (e.g., composites, food-grade packaging) can each add $10,000 to $40,000. Always budget a 15–20% contingency (around $9–$12/SF) specifically for these process-driven surprises—not just general construction overruns.

Equipment Installation & Rigging: The Overlooked 20% Add-On

Many first-time manufacturers budget only for the equipment purchase price, but installation, rigging, and commissioning typically add 15–25% to equipment costs. Heavy machinery (CNC routers, injection molders, assembly lines) requires concrete pads, vibration isolation, and precision leveling—often $3,000–$12,000 per machine. Forklift-rated floor loading (e.g., 250–500 PSF vs. standard 125 PSF) can add $2–$5/SF for slab reinforcement. Don’t forget permitting, electrical hookups (480V disconnects, VFDs), and safety guarding, which can run $2,000–$8,000 per workstation. A realistic budget: allocate $12–$20/SF for equipment installation and infrastructure integration beyond the machine purchase price.

Phasing Strategy: How to Cut First-Year Cash Outlay by 30–40%

Instead of building out the entire space at once, use a phased approach to match cash flow with production ramp-up. Phase 1 (first 6–9 months) should only include core infrastructure (power, compressed air, lighting, one production line, minimal office) at roughly 60% of total buildout cost—typically $27–$35/SF for a 30,000 SF facility. Phase 2 (months 10–18) adds additional production cells, storage, and finishing the office/admin area. This strategy can reduce first-year capital outlay by 30–40% and lets you adjust layout based on actual workflow bottlenecks. Many landlords also prefer phased TI allowances, potentially negotiating $5–$10/SF more in tenant improvement dollars when spread across multiple years.

FAQ

What does the $45–$95 per square foot range actually cover? That range typically covers the full interior buildout of an existing shell: electrical, lighting, HVAC, plumbing, flooring, walls, and basic office space. The low end assumes minimal power upgrades and standard finishes, while the high end includes heavy electrical capacity, reinforced floors, and higher-end office areas.

How much should I set aside for electrical and power upgrades? Electrical work often accounts for 20–35% of the total buildout cost, or roughly $10–$30 per square foot. If you need three-phase power, additional panel capacity, or specialized equipment hookups, expect to be at the higher end of that range.

Do I need to budget for floor reinforcement or specialty coatings? Yes, if you plan to install heavy machinery or require a cleanable, durable surface. Floor reinforcement can add $3–$8 per square foot, and epoxy or urethane coatings run $2–$6 per square foot. These are often necessary for light manufacturing but not always included in base estimates.

How much should I allocate for an office or break room area? Office and amenity spaces typically make up 10–20% of the total square footage and cost $50–$100 per square foot to finish. This includes walls, doors, lighting, HVAC drops, and basic finishes. Keep this separate from your production-area budget.

What about permitting, engineering, and design fees? These soft costs usually add 10–15% to your total construction budget. For a 10,000-square-foot buildout, that could mean $45,000–$85,000 in fees. Always include this in your initial budget, as it’s often overlooked.

How can I reduce costs without sacrificing quality? Focus on a simple layout, avoid moving major utility lines, and use standard finishes. Negotiate a tenant improvement allowance from your landlord—often $20–$40 per square foot—to offset your out-of-pocket costs. Also, phase non-critical work if cash flow is tight.

Sources

CBRE, *North America Industrial & Logistics Fit-Out and Construction Cost Guide* — per-SF benchmarks for manufacturing and warehouse buildouts.
JLL, *Industrial Market & Fit-Out Cost Guides* — power, clear-height, and TI allowance benchmarks for industrial leasing.
Cushman & Wakefield, *Industrial Construction Cost reports* — MEP and slab cost breakdowns.
RSMeans (Gordian), *Building Construction Costs Data* — unit pricing for electrical service, switchgear, concrete slab, and HVAC.
NAIOP (Commercial Real Estate Development Association), industrial development cost and clear-height standards.
BOMA International, industrial operating cost and building-systems benchmarks.
NFPA 13 / ESFR sprinkler standards — fire-suppression upgrade requirements by commodity class.

Download:

![How Do I Budget a Light Manufacturing Buildout?](https://arcodb.com/wp-content/uploads/2022/10/light-manufacturing-header.jpg)

<svg xmlns="https://www.w3.org/2000/svg" viewBox="0 0 1200 340" role="img" aria-label="How Do I Budget a Light Manufacturing Buildout? — PULSE Buildouts"><rect width="1200" height="340" fill="#EBE9DE"/><rect width="14" height="340" fill="#C0531F"/><text x="58" y="116" font-family="Arial,Helvetica,sans-serif" font-size="32" font-weight="800" letter-spacing="3" fill="#C0531F">PULSE BUILDOUTS · COMMERCIAL REAL ESTATE</text><text x="56" y="198" font-family="Arial,Helvetica,sans-serif" font-size="60" font-weight="800" fill="#2b2b2b">Save money. Don’t get screwed.</text><text x="58" y="258" font-family="Arial,Helvetica,sans-serif" font-size="30" font-weight="600" fill="#6b5b4d">Leases, TI, NNN &amp; buildouts — negotiated in your favor</text><g transform="translate(1010,86)" fill="none" stroke="#C0531F" stroke-width="9" stroke-linejoin="round"><rect x="20" y="40" width="150" height="130"/><line x1="20" y1="40" x2="95" y2="6"/><line x1="170" y1="40" x2="95" y2="6"/><rect x="50" y="80" width="36" height="36"/><rect x="104" y="80" width="36" height="36"/><rect x="74" y="128" width="42" height="42"/></g></svg>

# How Do I Budget a Light Manufacturing Buildout?

## Direct Answer

Budget **$45 to $95 per square foot** for a light manufacturing buildout inside an existing industrial shell, with most assembly, packaging, and light-fabrication projects landing around **$60 per square foot** once you account for upgraded power, floor reinforcement, and a 10–15% office/admin component. For a 30,000 SF facility that is roughly **$1.35M to $2.85M** in hard construction, before equipment and machinery. The single biggest money move is to find a **second-generation industrial building that already has the power, clear height, and dock doors you need**, because the most expensive line items in any manufacturing buildout — bringing in **three-phase 480V power**, upgrading the **electrical service**, and pouring or reinforcing **slab** — can each run six figures and are nearly free if the prior tenant already paid for them.

The second money move: pin down your **power requirement in amps and voltage before you tour buildings**, then only look at buildings that already have it. A service upgrade from 400A to 2,000A of 480V three-phase can cost **$80,000 to $300,000+** and take **3–9 months** of utility lead time. Walking into a building that already has the service is the difference between opening in 90 days and opening in nine months.

## Build the Budget Around Power, Floor, and Air

![How Do I Budget a Light Manufacturing Buildout? — Build the Budget Around Power, Floor, and Air](https://image.pollinations.ai/prompt/high%20quality%20editorial%20business%20professional%20office%20photograph%20illustrating%20Build%20the%20Budget%20Around%20Power%2C%20Floor%2C%20and%20Air%20How%20Do%20I%20Budget%20a%20Light%20Manufactur%2C%20realistic%20magazine%20style%2C%20warm%20light%2C%20no%20text%2C%20no%20watermark?width=1200&height=675&nologo=true&model=flux&seed=4699)


Light manufacturing buildouts are dominated by four systems that ordinary office buildouts barely touch:

- **Electrical service and distribution: $15–$35/SF.** This is your number-one cost. Map every machine's full-load amps, add 25% for future capacity, and size the service. Budget for a new **switchgear, panels, transformers, and bus duct or conduit runs to equipment**. Three-phase 480V is standard for most industrial equipment; confirm the building has it.
- **Concrete slab and floor flatness: $6–$18/SF if work is needed.** Heavy equipment, forklifts, and racking demand a **minimum 6-inch slab at 4,000 psi**; precision equipment may need thicker. Cutting in trenches for utilities or pouring equipment pads adds cost fast.
- **HVAC and ventilation: $8–$22/SF.** Beyond comfort cooling, you may need **process exhaust, makeup air, fume extraction, or dust collection** depending on what you make. A spray or welding operation needs far more than a simple assembly line.
- **Compressed air, gas, and process plumbing: $3–$12/SF.** Compressed air piping, drops to each station, and any process gas or water lines.

```mermaid
flowchart TD
  A[Light Mfg Buildout Budget] --> B[Electrical Service + Distribution 25-35%]
  A --> C[HVAC + Ventilation/Exhaust 12-20%]
  A --> D[Slab/Floor Work 8-15%]
  A --> E[Office/Admin Fit-Out 10-15%]
  A --> F[Compressed Air + Process Utilities 5-10%]
  A --> G[Soft Costs + Contingency 12-18%]
  B --> H[480V 3-phase, switchgear, panels]
  C --> I[Process exhaust, dust collection]
  D --> J[6 in min @ 4000 psi, equipment pads]
```

## Match the Shell to the Spec — Don't Pay to Fix the Building

![How Do I Budget a Light Manufacturing Buildout? — Match the Shell to the Spec — Don't Pay to Fix the Build](https://image.pollinations.ai/prompt/high%20quality%20editorial%20business%20professional%20office%20photograph%20illustrating%20Match%20the%20Shell%20to%20the%20Spec%20%E2%80%94%20Don't%20Pay%20to%20Fix%20the%20Build%20How%20Do%20I%20Budget%20a%20Light%2C%20realistic%20magazine%20style%2C%20warm%20light%2C%20no%20text%2C%20no%20watermark?width=1200&height=675&nologo=true&model=flux&seed=49140)


The cheapest manufacturing buildout is the one where the **building already fits the operation**. Before you sign, verify these against your process spec, because retrofitting any of them is expensive:

- **Clear height:** 18–24 ft is typical for light manufacturing; more if you rack vertically. Adding height is impossible — you move buildings instead.
- **Power:** voltage, phase, and available amperage at the panel (not just the meter).
- **Dock doors and grade-level doors:** count and size for your inbound/outbound flow. Adding a dock door means cutting a tilt-up wall — **$15,000–$40,000 each**.
- **Floor load rating:** confirm the slab's psf rating supports your heaviest equipment and racking.
- **Fire suppression:** light hazard sprinklers may be inadequate; **ESFR or in-rack sprinklers** for your commodity class can cost **$3–$8/SF** to upgrade.

## How Not to Get Screwed by the Landlord or Contractor

![How Do I Budget a Light Manufacturing Buildout? — How Not to Get Screwed by the Landlord or Contractor](https://image.pollinations.ai/prompt/high%20quality%20editorial%20business%20professional%20office%20photograph%20illustrating%20How%20Not%20to%20Get%20Screwed%20by%20the%20Landlord%20or%20Contractor%20How%20Do%20I%20Budget%20a%20Light%20Man%2C%20realistic%20magazine%20style%2C%20warm%20light%2C%20no%20text%2C%20no%20watermark?width=1200&height=675&nologo=true&model=flux&seed=91249)


Industrial leases are where landlords quietly push capital costs onto tenants. Protect yourself:

1. **Get the power upgrade in the landlord's column or as TI.** A 2,000A service upgrade benefits the building forever, not just you. Negotiate the landlord to fund it or roll it into a **TI allowance of $20–$50/SF**. On a 7-year lease for 30,000 SF, the landlord's rent stream easily justifies it.
2. **Nail down who owns improvements at lease end.** Slab reinforcement, electrical service, and dust collection are often **landlord-owned fixtures** at expiration — but a **restoration clause** can force you to *rip them out* and restore the building at your cost. Strike or cap restoration obligations; that clause has surprised tenants with **$50,000–$200,000 move-out bills**.
3. **Competitively bid the GC and the electrical sub separately.** Electrical is your biggest line; do not let the GC mark it up 20% inside a lump sum. Bid the **electrical contractor directly** and get **three bids**, with a **not-to-exceed cap**.
4. **Control change orders.** Industrial work uncovers surprises — buried utilities, undersized risers, soil conditions under new pads. Require **written pre-approval and capped markup (10–15%)** on all changes.
5. **Verify utility lead times in writing.** If the build depends on a utility transformer upgrade, get the **utility's written timeline** before committing. A delayed transformer can idle a finished building for months while you pay rent.

```mermaid
flowchart LR
  A[Define process spec: power, height, floor load] --> B[Tour only matching shells]
  B --> C{Building already has power + height?}
  C -->|Yes| D[Lower cost, faster open]
  C -->|No| E[Negotiate landlord-funded upgrade or walk]
  D --> F[Bid GC + electrical separately, NTE cap]
  E --> F
  F --> G[Permit, utility coordination, construct]
  G --> H[Inspections, equipment install, startup]
```

## Phase Equipment Spend and Hold a Real Contingency

Separate **building buildout** from **equipment/machinery** in your budget — they are different capital pools with different financing. Machinery is often better financed or leased (equipment loans, Section 179 depreciation) than rolled into the buildout. Buy production equipment on a **ramp schedule** tied to demand, not all at once.

Hold a **12–18% contingency**. Industrial retrofits in older buildings surface hazardous materials, code-triggered upgrades (ADA, fire, accessibility), and utility surprises. On a $2M buildout that contingency is **$240,000–$360,000**, and process facilities use more of it than office jobs do.

<!--pillar-weave-->
## Related on PULSE

- [Should I open a Christmas light installation business in 2027?](/knowledge/q15066)
- [Do I Need a Fractional CRO for My Manufacturing Company?](/knowledge/q15653)
- [How Many Sales Reps Do I Need to Hire for My Manufacturing Company?](/knowledge/q15570)
- [Given the 2027 trend of vendor consolidation, how are mid-market manufacturing firms reducing their RevOps tech stack from 15+ tools to fewer than 5, and which categories (e.g., CDP, MAP, CRM) are being eliminated first?](/knowledge/q13503)
- [How do you start a drone light show business in 2027?](/knowledge/q9713)
- [How do you start a holiday light installation business in 2027?](/knowledge/q9703)

## Hidden Infrastructure Costs That Blow Budgets

Beyond obvious line items like flooring and electrical, light manufacturing buildouts often face surprise costs from **process-specific infrastructure**. For example, compressed air systems (dryers, piping, filtration) typically run **$8,000 to $25,000** for a modest 30,000 SF shop, while process water or wastewater treatment can add **$15,000 to $60,000** depending on local discharge regulations. Dust collection, fume extraction, or temperature/humidity control for sensitive materials (e.g., composites, food-grade packaging) can each add **$10,000 to $40,000**. Always budget a **15–20% contingency** (around **$9–$12/SF**) specifically for these process-driven surprises—not just general construction overruns.

## Equipment Installation & Rigging: The Overlooked 20% Add-On

Many first-time manufacturers budget only for the equipment purchase price, but installation, rigging, and commissioning typically add **15–25%** to equipment costs. Heavy machinery (CNC routers, injection molders, assembly lines) requires **concrete pads, vibration isolation, and precision leveling**—often **$3,000–$12,000 per machine**. Forklift-rated floor loading (e.g., 250–500 PSF vs. standard 125 PSF) can add **$2–$5/SF** for slab reinforcement. Don’t forget **permitting, electrical hookups (480V disconnects, VFDs), and safety guarding**, which can run **$2,000–$8,000 per workstation**. A realistic budget: allocate **$12–$20/SF** for equipment installation and infrastructure integration beyond the machine purchase price.

## Phasing Strategy: How to Cut First-Year Cash Outlay by 30–40%

Instead of building out the entire space at once, use a **phased approach** to match cash flow with production ramp-up. Phase 1 (first 6–9 months) should only include **core infrastructure** (power, compressed air, lighting, one production line, minimal office) at roughly **60% of total buildout cost**—typically **$27–$35/SF** for a 30,000 SF facility. Phase 2 (months 10–18) adds additional production cells, storage, and finishing the office/admin area. This strategy can reduce first-year capital outlay by **30–40%** and lets you adjust layout based on actual workflow bottlenecks. Many landlords also prefer phased TI allowances, potentially negotiating **$5–$10/SF more** in tenant improvement dollars when spread across multiple years.

## FAQ

**What does the $45–$95 per square foot range actually cover?**  
That range typically covers the full interior buildout of an existing shell: electrical, lighting, HVAC, plumbing, flooring, walls, and basic office space. The low end assumes minimal power upgrades and standard finishes, while the high end includes heavy electrical capacity, reinforced floors, and higher-end office areas.

**How much should I set aside for electrical and power upgrades?**  
Electrical work often accounts for 20–35% of the total buildout cost, or roughly $10–$30 per square foot. If you need three-phase power, additional panel capacity, or specialized equipment hookups, expect to be at the higher end of that range.

**Do I need to budget for floor reinforcement or specialty coatings?**  
Yes, if you plan to install heavy machinery or require a cleanable, durable surface. Floor reinforcement can add $3–$8 per square foot, and epoxy or urethane coatings run $2–$6 per square foot. These are often necessary for light manufacturing but not always included in base estimates.

**How much should I allocate for an office or break room area?**  
Office and amenity spaces typically make up 10–20% of the total square footage and cost $50–$100 per square foot to finish. This includes walls, doors, lighting, HVAC drops, and basic finishes. Keep this separate from your production-area budget.

**What about permitting, engineering, and design fees?**  
These soft costs usually add 10–15% to your total construction budget. For a 10,000-square-foot buildout, that could mean $45,000–$85,000 in fees. Always include this in your initial budget, as it’s often overlooked.

**How can I reduce costs without sacrificing quality?**  
Focus on a simple layout, avoid moving major utility lines, and use standard finishes. Negotiate a tenant improvement allowance from your landlord—often $20–$40 per square foot—to offset your out-of-pocket costs. Also, phase non-critical work if cash flow is tight.

## Sources

- CBRE, *North America Industrial & Logistics Fit-Out and Construction Cost Guide* — per-SF benchmarks for manufacturing and warehouse buildouts.
- JLL, *Industrial Market & Fit-Out Cost Guides* — power, clear-height, and TI allowance benchmarks for industrial leasing.
- Cushman & Wakefield, *Industrial Construction Cost reports* — MEP and slab cost breakdowns.
- RSMeans (Gordian), *Building Construction Costs Data* — unit pricing for electrical service, switchgear, concrete slab, and HVAC.
- NAIOP (Commercial Real Estate Development Association), industrial development cost and clear-height standards.
- BOMA International, industrial operating cost and building-systems benchmarks.
- NFPA 13 / ESFR sprinkler standards — fire-suppression upgrade requirements by commodity class.

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