Co-ops help strengthen the manufacturing sector
Wednesday, August 08, 2018
Manufacturing is critical to a vibrant economy. It helps fuel innovation — for every $1 spent in manufacturing another $1.89 is added to the economy, according to the Bureau of Economic Analysis.
East Central Energy (ECE) understands the value of supporting manufacturing. That’s why the cooperative recently approved two loans to support expansion projects at manufacturing facilities in Sauk Rapids and Cambridge.
ECE is one of Great River Energy’s member-owner cooperatives. The co-op provides electric service to more than 60,000 homes, farms and businesses across 14 counties in east central Minnesota and northwest Wisconsin.
ECE maintains an economic development revolving loan fund (RLF) established through the USDA Rural Economic Development Loan and Grant (REDLG) program to support economic growth in the communities it serves. These funds are used for projects that either create or retain jobs.
In March, ECE approved RLF loans for Ritz Manufacturing and Minnesota Concrete Products. Great River Energy provided technical review of the applications, loan packaging and loan closing support for ECE, as the cooperative worked to secure gap financing for these growing businesses.
“The RLF funds used for Minnesota Concrete Products and Ritz Manufacturing fit perfectly with ECE’s loan parameters and have helped create new jobs in manufacturing,” said Mark Nelson, ECE’s business accounts and energy services manager.
Minnesota Concrete Products (MCP) manufactures precast concrete products, such as fire pit tables, counters, sinks and outdoor furniture. The ECE board of directors approved a $200,000 loan to help the company expand its Sauk Rapids facility. The company invested $325,000 in the project, adding new manufacturing space, shipping areas and loading docks.
The expansion will enable MCP to boost production capacity and create a new product line. With the recent upgrades, five new jobs will be added.
Ritz Manufacturing is a global leader in the tube bending industry. The Canadian company has now established its first U.S. plant in Cambridge, with the help of a $250,000 RLF loan from ECE.
Adam Teeter, director of U.S. operations, said the company knew a skilled workforce was one of the primary prerequisites to establish a successful U.S. facility. “We found a key group of those people here in Cambridge. In addition to the talented people the region had to offer, we received tremendous support from regional and local economic development groups, and of course East Central Energy, which helped to put the rest of the pieces of the puzzle together for our vision and plans.”
Ritz Machine Works bought a building that had been vacant since 2016 and invested approximately $1.9 million in the project. The Cambridge facility will create 30 new full-time jobs with wages of $16–38 per hour.
Tom Lambrecht, Great River Energy’s economic development services manager, pointed out that RLFs are a valuable tool to assist in building a sustainable economy. “The loans are great because they help make business expansions possible and they help create jobs,” he said. “In addition, when the loans are repaid the funds grow, which means they can support economic development projects for many years to come.”
Category: East Central Energy, economic development, Advanced Manufacturing