EDA approves loan for DRS Manufacturing
Wednesday, December 19, 2012 4:57 AM
The Spring Valley EDA, meeting Dec. 12, approved a loan, not to surpass $10,000, from the Revolving Loan Fund for owner Dustin Smith of DRS Manufacturing.
Smith was present at the meeting to make the loan request and share information about his business plans for expansion with the board members. Currently he is renting the former Stier Welding & Repair shop east of Spring Valley on Highway 16. Smith moved his business from Adams to Spring Valley in April 2012.
He said a goal of the company is to "produce high quality skid steer attachments and sell them on consignment auctions across the United States."
The company has been producing attachments for the past three years, but wants to step up production. "We make every part on the bucket, start to finish," he noted. "We feel we have a very durable product."
Currently, Smith said he is able to make one bucket per day on his current plasma table but said with the new one, he could make one bucket per hour.
The total amount needed for the expansion is $200,000, which would include the purchase of a CNC plasma table from Kappers Fabrication in Spring Valley. The funds would also be used to purchase a semi and trailer, noted Smith, which will be used to ship large quantities of the product at one time, which will reduce shipping costs to the auctions. Smith, who has truck-driving experience, will be making the deliveries. Another purpose of the funds is to increase working capital for the business to allow for more material and equipment to be on hand for the attachments.
"I look for the business to grow with better equipment," he added.
Of the $200,000, Smith will contribute $20,000, Security State Bank would lend up to $150,000, a loan from SMIF would contribute $35,000 and the EDA would loan up to $10,000. The EDA's contribution is as much as 5 percent, depending on the bank loan.
Smith said with this expansion, he will also be hiring two more full-time workers - one to operate the plasma table and the other as a welder.
The name of the brand he is selling his attachments under is Valley Pro Attachments. Smith said there are four attachments they specialize in and have improved on over the years: root grapple bucket - 72 inches, root grapple bucket - 75 inches, material bucket and a rock bucket.
Smith also plans on showcasing his products at county fairs and farm shows to gain more exposure.
Mayor Jim Struzyk asked if the county would be willing to guarantee the loan.
Economic development director Cathy Enerson stated, "The county has no funds to loan out."
The board members noted that Smith's business is currently located outside of city limits. Enerson said his business is 1.4 miles from city hall. One of the stipulations in the RLF guidelines is that the business be located within city limits.
Smith said in the future, once he outgrows his current building, his plan is to "build within the community of Spring Valley, possibly in the industrial park."
Smith noted that he thinks it is "beneficial to see that area develop."
It was noted a Spring Valley business in city limits would be benefiting from this venture, not only with the sale of the table, which would open up more room for a needed piece of equipment, but that Kappers would then refer its current projects that they complete with the plasma table to DRS Manufacturing.
"We can cut the parts they need and we are just down the road," he said.
It was decided to approve the loan, pending approval of the bank. The EDA also decided to add a clause in the agreement that if the business would move or build outside of city limits in the future that the loan would be called due.
Enerson said Jerry and Michelle Carr have responded and have started paying their RLF loan back again. "Their intentions are to pay back the loan," she said, "I couldn't be more pleased."
The director said the Spring Valley Public Utilities board has decided to help out with funding for the design plan for the downtown revitalization, and has committed to help fund at least three more new construction housing incentives.