American Industrial Brands, LLC (“AIB”) is a manufacturer and distributor of bathroom fixtures including sinks, toilet bowls, bathtubs, and related parts (referred to as "sanitary fixtures"). AIB provides private-label sanitary fixtures to major big-box retailers and related entities on a multi-year contract basis. Manufacturing at AIB is completed through three manufacturing processes: porcelain, acrylic, and plastics, each of which are highly modernized and leverage robotics and technological advancements in productions. AIB is one of two domestic manufacturers that manufactures and provides domestically produced products. AIB is currently expanding a 335,000-square-foot manufacturing facility that, once complete, anticipates producing 850,000 to 1.1 million units per year for distribution ("the Project").
AIB also has several other distribution centers in the United States (U.S.). Domestic production, combined with importing and multiple distribution centers, helps to maximize service, flexibility, and new opportunities.
Location
The project locations qualifies as a Targeted Employment Area (TEA) because it has an unemployment rate that exceeds 150% of the U.S. national average unemployment rate.The current national average is 5.4% and 150% of this is 8.1%. The Project”s location has an unemployment rate of 9.9% and therefore qualifies as a TEA, subject to the decreased investment amount of $800,000 (the “Capital Contribution”) and investors get access to the visas set aside for this category (10% of the total EB-5 visas).
Market Opportunity
Many manufacturers in the United States that had once out sourced production to foreign countries for cost saving tactics are now re-shoring their operations. In order for manufacturers to be successful with bringing operations back, modern technology must be used to help fill labour gaps and reduce costs to maintain competitive. The Project's facility utilizes state-of-the-art robotics to manufacture products, using less time and labor costs.
Additionally, Indiana is a "right-to-work-state" thus the labour force is not unionized, resulting in lower labor costs. These two factors, coupled with the vertically integrated manufacturing process, all help to contribute to higher profit margins.
Government Support
The Project is utilizing funds from the New Market Tax Credit Program (“NMTC”). The NMTC Program incentivizes community development and economic growth using tax credits that attract private investment to distressed communities. NMTC was used as a part of the purchase of the original facility in 2018, whereby $5.4 million was received from this program. With the additional investment for the final phase of production, the Project qualifies to use these incentives to obtain up to $7.2 million of funding.
Management Experience
AIB is led by Robert Easter, CSO, Chuck Dockery, CEO, and Nick Quattro, CFO. Robert Easter has been involved in manufacturing since 2004 and possesses a deep background in injection moulding. He leads the facility and financing efforts. Chuck Dockery has been involved in the plumbing industry for approximately 30 years, in engineering, manufacturing, and as CEO of Briggs Plumbing, since 2011. Nick Quattro has over 35 years of experience in finance, accounting, and distribution. He has worked for Briggs Plumbing for nearly 20 years, and has overseen numerous departments such as accounting and marketing.
The EB-5 offering is sponsored by Steven Smith of Smith Central Regional Center whose prior EB-5 projects include a hotel, apartment building complex, and a restaurant chain.
I-526E Denial Refund
An “I-526E Denial Refund” has been provided by the new commercial enterprise ("the NCE"), American Industrial Brands Fund 1, LLC, to repay investors in the event of denial.
Phased Investment
AIB is offering its investors a phased investment opportunity, allowing them to to initially contribute $480,000 and pay the remaining $400,000 within 6 months.
Job Cushion
The econometric study estimated that 209 jobs will be created from the Project, resulting in an excess of 49 jobs or approximately a 31% job cushion.