A Brownstown manufacturer will make improvements in equipment and technology after the town council approved a pair of tax abatements.
The most recent abatement for E&H Tubing Inc., which does business as Indiana Steel and Tube Inc., involves spending $600,000 for the installation of new manufacturing equipment. That will allow the company to phase in paying taxes on the investment incrementally over the next 10 years.
In April, a three-year abatement for $200,000 was approved for the installation of new logistical distribution equipment.
The number of employees — 71 — will stay the same. A majority of them work at the main 100,000-square-foot facility at 848 W. Sweet St., while about 10 work at the 70,000-square-foot value-added operations and storage building at 322 E. Bridge St.
Indiana Steel and Tube produces pregalvanized tubing to a larger market that uses it for commercial fencing and ornamental, greenhouse, agriculture and mechanical applications, according to its website.
Controller Rodney Bruner said the larger abatement will allow the company to update technology at the Sweet Street facility.
“Some of the technology there is so obsolete that we can’t find parts for it or if we find them, they are through the roof (in cost), so we’re trying to upgrade it to make it more competitive,” he said. “This equipment should last for the foreseeable future.”
The logistical distribution equipment will be forklifts. A shorter abatement period was requested because the company doesn’t expect to lease the equipment for more than three years, Bruner said.
Indiana Steel and Tube is the only place in Brownstown with tax abatements, which have to be used for new manufacturing, information technology or distribution equipment.
The company was established by Dill Whittymore in May 2008, and he sought and received a tax abatement for $2 million in planned investments from the town council.
At that time, he said he planned to locate a manufacturing operation in the former Russell Stover distribution center in the town’s industrial park off of South State Road 135 and a sister operation at the former Dura Automotive plant along East Bridge Street. The company planned to hire about 100 people through 2009.
In 2010, Whittymore received a $1 million tax abatement for equipment purchases for the company.
His compliance with the statement of benefits filed with the town in May 2012 showed he originally planned to hire 45 people, but at one point, he employed 101.
The plans put in place to expand the business were delayed because of financial setbacks, which led to Whittymore filing a Chapter 11 petition in July 2012. That’s designed to allow the debtor to restructure the business.
E&H Tubing purchased his company’s assets for $5.765 million later that year through a Chapter 11 bankruptcy sale.
The Chicago-based company planned to continue producing mechanical steel tubing and structural steel tubing at the two plants in Brownstown and do business under the name Indiana Steel and Tube.
Whittymore said he would continue to own the land and the buildings, but E&H would own the equipment and mills.
The town council approved the transfer of two tax abatements totaling $3 million that Whittymore had received for Indiana Steel and Tube to E&H Tubing. Those will expire in 2022.