Structural Clay Products LLC has raised $21.9 million in project financing to help reopen a brick manufacturing plant in Mexico, Missouri. Advantage Capital Partners provided $9.75 million of the total.
Advantage Capital Partners has provided $9.75 million of a $21.9 million total project financing for the much anticipated effort to re-open a brick manufacturing plant in Mexico, Missouri. Mid America Brick & Structural Clay Products, L.L.C. will use the funding from Advantage Capital, Rand Capital, Environmental Liability Transfer and other investors to acquire, re-commission and operate the former A.P. Green plant as a face brick manufacturing facility. The plant will provide approximately 80 new jobs once it is fully operational in 2011.
“This is great news for the rural community of Mexico, Missouri,” said Scott Zajac, Senior Managing Director at Advantage Capital. “Our firm is proud to be part of an effort to spur job creation and economic development right at the time when confidence among homebuilders is on the rise.” Advantage Capital will utilize both federal and Missouri New Markets tax credits, designed to stimulate private capital for economic growth in low-income communities, to help finance the project.
The A.P. Green plant, which closed in 2002, was at one time one of the largest refractory brick manufacturers in the United States. Mid America Brick will use the facility to make face brick for residential and commercial/industrial construction. The process for manufacturing refractory bricks and face bricks is similar; therefore the re-commissioning and conversion costs of the A.P. Green plant will be minimized.
The Commerce Department reported last month that new housing starts rose nearly six percent in April, a much faster pace than expected. The data was released following a report from the National Association of Homebuilders that said builders’ confidence in starting new projects is at its best level in two years, due to an increase in home purchases in the first quarter.
“There has been a tremendous amount of dedication to see this project through,” said brick industry veteran and Mid America Brick CEO Frank Cordie. “I am extremely pleased that we will be able to begin the work that will lead to redeveloping the area, re-opening this plant and providing jobs in our community.” Mr. Cordie acknowledged the strong support at the local, state and federal levels of government, including the Mexico City Council, Missouri State Representative Steve Hobbs (R-21), Missouri State Senator Wes Shoemyer (D-18), U.S. Representative Blaine Luetkemeyer (R-9) and U.S. Senator Kit Bond (R-Missouri).
Mid America Brick’s central location is expected to give the manufacturer a competitive advantage, due to the expected lower transportation costs associated with shipping bricks to various locations throughout the Midwest. In addition, all indicators are pointing to more demand for face brick due to the extremely low inventories of brick as a result of a slowdown in the building industry. When the plant is fully operational, it is expected to produce nearly 60 million bricks annually.
A ribbon cutting ceremony is expected to take place at the Mid America Brick facility later this summer. Additional investors in the project include Rand Capital (NASDAQ: RAND), real estate investment group Environmental Liability Transfer and a group of individual investors, many of whom reside in Mexico, Mo. Community South Bank, based in Knoxville, Tenn., underwrote the senior debt facility through a USDA-guaranteed loan. Mid America Brick has also obtained funding from a number of state and local financing programs including Neighborhood Improvement District bonds, a Missouri Department of Economic Development loan, Brownfield tax credits, a Community Development Block Grant and many other training and enterprise enhancement incentives.
About Advantage Capital Partners
Advantage Capital Partners is a leading venture capital and small business finance firm focused on providing growth capital and other investments supporting state and local economic development efforts. The firm’s typical forms of investment include early stage equity, expansion equity, mezzanine financing, senior and subordinated loans and government-guaranteed lending. With offices and partners in St. Louis, New Orleans, Austin and other U.S. cities, Advantage has raised more than $1.3 billion in institutional capital since 1992 and invested in companies located in geographic areas underserved by traditional capital.