September 25, 2018
SWISS KRONO GROUP RECEIVES $45.25 MILLION IN NEW MARKETS TAX CREDITS FROM NATIONAL NEW MARKETS FUND, THE INNOVATE FUND, DAKOTAS AMERICA, SUNTRUST COMMUNITY CAPITAL
Barnwell Expansion will create 500 construction jobs and 105 permanent jobs in
SC Lowcountry Promise Zone
BARNWELL, S.C., (September XX, 2018) — National New Markets Fund, The Innovate Fund, Dakotas America and SunTrust Community Capital (STCC) have allocated $17 million, $11.25 million, $10 million and $7 million, respectively, in New Markets Tax Credits (NMTC) as part of a $200+ million, 250,000 square-foot expansion of the SWISS KRONO plant in Barnwell, S.C. NMTC advisory services were provided to SWISS KRONO by Tax Advantage Group, LLC. The project includes the construction of a new multi-density fiberboard manufacturing line, ancillary wood yard, energy plant and waste treatment facilities, and the installation of a fourth laminate flooring line. The expansion is expected to create 605 permanent and construction jobs in a rural area with 14.4 percent unemployment.
SWISS KRONO Group is one of the world’s leading manufacturers of wood-based materials. Ever since establishing operations in Barnwell County in 2005, the company has purchased 100 percent of the high and medium density fiberboard it uses from out of state sources. The addition of a multi-density fiberboard manufacturing line will allow SWISS KRONO to vertically integrate its business, resulting in substantial operational cost savings. In addition, SWISS KRONO will source its wood products locally, providing a boost to the lagging forestry industry that has been devastated by the move away from paper products over the past decade.
Erik Christensen, President and CEO of SWISS KRONO Group’s U.S. subsidiary, said, “SWISS KRONO is grateful to receive the benefit of new markets tax credits, allowing us to grow the commitment we made to this area over a decade ago. This investment will set us up to continue that support for decades to come.”
The project is a boon to the local community, which is part of the SC Lowcountry Promise Zone, a federal program that gives high poverty communities opportunities to increase economic activity and leverage private investment. With 167 current employees, SWISS KRONO is one of Barnwell County’s largest employers. In 2015, the county ranked 8th lowest in S.C. for average weekly wages, which were 23.5 percent lower than the state average and 38 percent lower than the national average.
Danny Black, the President and CEO of the Southern Carolina Regional Development Alliance, the lead organization of the SC Promise Zone, said, “The SC Lowcountry Promise Zone is an area of rural South Carolina that has not seen the recent economic gains the rest of the state has and helping this area’s existing employers like SWISS KRONO expand and grow is an important part of turning that around.”
“The Innovate Fund is pleased to be able to help close the funding gap for SWISS KRONO to bring this important project to fruition,” said Whitney Ferguson, Program Manager of The Innovate Fund. Ms. Ferguson also noted that investment from The Innovate Fund would not be possible without the continuing support from South Carolina’s legislative delegation, including U.S. Senators Lindsey Graham and Tim Scott.
“The 105 jobs SWISS KRONO will create are precisely the type of economic activity NMTCs are intended to spur in low-income communities such as Barnwell, South Carolina,” underscores Deborah La Franchi, the President of National New Markets Fund.
“This project will be transformative for the SWISS KRONO plant, and the community of Barnwell, S.C. will benefit from the economic impact for years to come, said Mark Lattanzio, Region President for SunTrust Bank. “We are proud to partner with SWISS KRONO to make this expansion a reality.”
About SWISS KRONO Group
The history of SWISS KRONO Group began in Switzerland in the 1960s. In 1966, the Austrian entrepreneur Ernst Kaindl founded his company in Menznau. It has constantly grown since then and continually expanded its range of products. Today it is one of the world’s leading producers of engineered wood products with more than 5,100 employees working in Switzerland, France, Germany, Poland, Ukraine, Hungary, Russia and in the United States.
About SunTrust Community Capital (STCC)
STCC is a wholly owned subsidiary of SunTrust Bank. STCC provides debt and equity capital for real estate projects and businesses that economically benefit communities throughout the SunTrust footprint. STCC leverages several tax credit programs, including low income housing tax credits, historic tax credits and new markets tax credits to deploy capital for commercial real estate developments including multifamily, office, industrial, retail and various other community facilities. Through STCC, SunTrust has deployed nearly $4 billion to finance more than 40,000 units of affordable housing for seniors and others.
About National New Markets Fund (NNMF)
National New Markets Fund ($477 million) invests in development projects that benefit low-income communities across the U.S. As a mission-driven investment fund, NNMF seeks investments that create substantial economic and community development impacts. For more information, visit http://www.sdsgroup.com/funds/national-new-markets-fund.
About The Innovate Fund
The Innovate Fund and its affiliates are designated Community Development Entities under the provisions of the Community Development Financial Institutions Fund, which since their inception, have been awarded $217 million in allocation of New Markets Tax Credits. The Innovate Fund’s mission is to serve and provide investment capital for operating businesses and real estate development projects in low-income communities across South Carolina. The Innovate Fund’s partners are the Greenville Local Development Corporation and taxadvantagegroup.
About Dakotas America
To stimulate economic investment in low-income communities, Dakotas America LLC, a
Community Development Entity (CDE), has been awarded New Markets Tax Credit (NMTC)
allocations by the U.S. Department of Treasury CDFI Fund. Dakotas America has $330MM in
NMTC allocation under management and works with developers, local, state, and tribal
governments, and economic development corporations to identify qualifying projects for NMTC
enhanced financing. The NMTC program enables Dakotas America to tackle projects that have
the greatest positive impact on the communities served, expanding economic opportunity and
improving the quality of life in areas that need it most. For more information, go to www.dakotasamerica.com.
About Greenville Local Development Corporation (GLDC)
Founded in 1979, Greenville Local Development Corporation (GLDC), a 501(c)(3) non-profit, was established by a group of committed community and business leaders in Greenville, SC to address obstacles faced by businesses and community based organizations in obtaining conventional financing. Since inception, GLDC has been working to provide financial assistance, real estate development coordination, and strategic guidance for economic development projects and business expansions.
Headquartered in Greenville, S.C., taxadvantagegroup (tag) is one of the country's most successful consulting firms specializing in New Markets Tax Credits, helping nonprofit and for profit organizations access capital and transform communities. Since 2004, tag has played an instrumental role in securing funding for over $1.4 billion for community projects across the United States. In addition, tag provides compliance and asset management services on $450 million of NMTC assets.