By Audrey LaFave
GLADSTONE - The Gladstone City Commission voted to approve a $65,000 revolving loan fund (RLF) for Bramco Containers, Inc. The decision was made at a public hearing during Monday night's commission meeting.
City Treasurer Darla Falcon introduced the request of Bramco Containers, a packaging company located on the bluff in Gladstone. The Economic Development Committee recommended the $65,000 working capital loan for the company at a Jan. 13 meeting.
Bramco Containers President John O'Driscoll and Vice President Steve O'Driscoll were both at Monday's commission meeting. Steve O'Driscoll spoke to the board, saying the city's revolving loan fund's goals and objectives matched perfectly with the items Bramco was requesting funding for.
"Bramco Containers is in the process of a major expansion of our business, complimenting a machine that you as a commission financed two years ago," he said. "This expansion is through the sale of packaging to another U.P. business, Khoury Furniture, which has recently been recognized for 60 years of business in the Iron Mountain/Kingsford area."
Steve pointed out the expansion has already resulted in one additional job at Bramco, beginning in September, and will generate another job in the next three to six months.
"Two jobs may (sound like) a small number, but it is significant in this economy and is actually a large increase, considering it will move us from five full-time employees to seven - an increase of 40 percent from August 2008 to August 2009," Steve said.
The new venture with Khoury Furniture utilizes a new business model, he said, that is unique to Bramco Containers among local competitors. The Gladstone company acquired Khoury's business from the second largest packaging firm in the country.
Mayor Tom Sinnaeve said the loan was necessary as Bramco was experiencing "cash flow problems due to growing pains." O'Driscoll agreed, stating Khoury was experiencing lack of floor space to accommodate its own packaging operations due to rapid growth, and Bramco would be taking over packaging for the furniture company for the long term.
"This rapid business expansion has its downside, as there is a great amount of capital investment (required) to get the ball rolling," said O'Driscoll. "This is not usually a problem with taking on a new customer, but in a situation of this magnitude, it's (on par with) starting an entirely new business. Therefore, we are asking for the city's help to facilitate our growth."
Commissioner Craig Lauerman said he agreed with the O'Driscoll brothers that this is the exact type of investment the revolving loan fund was set up to work with.
"This is the type of business operations that the RLF was made for," said Lauerman. "In this economy you're not going to be seeing a lot of people getting new orders like this."
The commission voted (4-0) to allow the grant the RLF request to Bramco Containers. There was no comment from any member of the public during the hearing.