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Loan expected to have big impact PDF Print E-mail
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Written by MARK JAEGER   
Wednesday, 11 December 2013 18:04

Alliance Packaging, specialists in lip balm, say village fund will help buy equipment to double capacity

The Saukville Village Board gave the green light last week to a request by Alliance Packaging Group for $100,000 from the revolving-loan fund.

The business, owned by Linda and Maher Kamel, is located at 420 Technology Way. It currently uses 25,000 square feet at the plant and has a lease that runs through 2015, with an automatic five-year renewal.


Alliance was incorporated in 2001, and specializes in the production and packaging of personal-care products. It is considered a certified Women Owned Business Enterprise by the State of Wisconsin.


Although it makes sunscreen, hand and body lotions, hand sanitizer and face paint, the company’s main claim to fame is lip balm. Alliance produces 20 million tubes of lip balm a year.


Flavored balms have become the company’s niche, including favorites like chocolate, and off-beat options such as maple-smoked bacon, beer, ketchup and mustard, buttered sweet corn and even pickles.


During an Ozaukee Press interview earlier in the year, Linda Kamel noted that aspect of the business has gained her considerable acclaim.


“A lot of people know me as the Lip Balm Queen,” Kamel joked.


The company currently has four automated production lines, with each filling and capping about 40 tubes a minute.


The loan will be used to help buy a new line capable of producing 150 tubes of balm a minute, nearly doubling production capacity.


Even with the expanded capacity, plant manager Jeff Larson said the company will remain “a small player” in the lucrative lip balm market.


That new equipment — valued at $264,000 — is being custom built by Epak Machinery, located in La Porte, Ind. Shipping cost for the heavy piece of equipment and adding electrical service is expected to add $20,000 to the cost.


With its current facilities, the company expects business to increase by 14% this year. Sales are projected to grow 16% in the next two years.


According to its loan application, Alliance currently has 22 full-time workers. The new production line will allow it to expand its workforce by five employees within the next two years.


According to Kathleen Cady Schilling, executive director of Ozaukee Economic Development, one condition of the revolving loan program is that one job be added for each $20,000 borrowed.


“It is important to note that the village is not at risk by approving this loan. This was originally federal money that came to the state, and then funneled to the village,” Cady Schilling said.


Because of those outside ties, a variety of federal regulations must be followed, including the requirement that at least half of the new hires be from low to moderate income households. Hiring will be done through Wisconsin Workforce Development.


“This is a very strong local business. If it should default on this loan, and I can’t imagine that ever happening, the village loses nothing,” Cady Schilling said.


The loan itself will be paid over 10 years, at an interest rate of 2.75%.


As money is repaid, it becomes available to other companies interested in tapping the revolving-loan fund.


With that reassurance, trustees unanimously approved the loan.


 
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