American Industrial Brands, an Indiana-based importer and manufacturer of bathroom fixtures, is in the process of expanding a 335,000-square-foot manufacturing facility to become a vertically integrated supplier of sinks, toilet bowls, bathtubs, and related parts. The $26.5 million project is currently underway and is expected to be complete by September 2022. The company is issuing a $10.0 million offering to EB-5 investors, which will accompany $16.5 million in existing investment, to finalize the expansion and provide working capital. The project is expected to bring 260 new full-time jobs to the Indianapolis, Indiana metro area.
AIB is a partnership between leading suppliers in the plumbing and fixtures market, including Briggs, Abington, CASE, Coast, SAYCO, Universal Rundle, and JASON Baths. To date, AIB has served as an importer of products from overseas manufacturers. The new manufacturing plant will provide AIB’s affiliated brands with a domestic source of Grade A porcelain bathroom fixtures and related products. It will also provide white-label manufacturing for big box retailers that carry their own, privately branded product lines (i.e., Glacier Bay by Home Depot and Proflo® by Ferguson).
Advantages: operating efficiencies and ‘made in USA’ brand
While international manufacturing currently accounts for 80% of bathroom fixture products sold in the United States, supply chain logistics — including 30–90 day lead times — have created a market where every level of the supply chain must order and carry adequate inventory for downstream buyers. The result is a 5–7% increase in per-unit costs. As a domestic manufacturer that is centrally located, AIG will bypass upstream cost layering, enabling it to offer more competitive pricing, while also delivering faster lead times, just in time distribution, and a “Made in USA” brand. This market positioning, paired with operating efficiencies afforded by advanced technology and lower, non-union labor costs, will give AIB a powerful, and long-lasting competitive advantage in the market.
AIB acquired an existing, fully commissioned plant and is modernizing and upgrading the facility to include new robotic systems, pressure casting machines, dryers, kilns, and shuttle kilns. Once complete, the facility will produce 850,000 to 1.1 million units per year. The plant also has the available square footage for a second phase expansion that would increase capacity to 3.0 million units annually. Approximately 50% of phase I production capacity is already booked with orders from Briggs, Clayton Homes, Menards, Universal Rundle, and Ferguson.
Natural fit for EB-5
AIB is a natural fit for the EB-5 program. Based in Kokomo, Indiana, the plant is located in a Targeted Employment Area (TEA), thus qualifying for the lower, $500,000 investment amount. The projected job creation will yield 13 jobs per investor, 30% more than the minimum requirement. In contrast to a startup venture, AIB is an existing company that is already generating revenue, has distribution agreements pending, carries no debt, and is backed by industry-leading brands. EB-5 investors will receive preferred equity and will also enjoy senior positioning in the capital stack. The project is sponsored by eb5Marketplace, an EB-5 investment platform that identifies and promotes attractive EB-5 projects, providing comprehensive information, project details, and expert due diligence to help foreign investors identify and subscribe to offerings that best align with their immigration and investment objectives.