Tax Law Helps Manufacturer Add New Facilities and Production Lines

Canned beverage manufacturer DrinkPAK will soon open several new facilities and production lines, thanks in large part to last year’s tax law.

Expansion made possible: “We’re putting new manufacturing lines in Texas and … and we will put new manufacturing lines in a Philadelphia facility as well,” DrinkPAK Chief Strategy Officer Brian Aster told the NAM.

• “And then we have two more sites identified where we’ll start putting manufacturing lines as well. … We have aspirations over the next five years or so for more facilities.”
• The six-year-old Santa Clarita, California-based company will use the 2025 law’s factory expansion deduction to make the new sites possible, Aster said.

“Tax trifecta” to the rescue: DrinkPAK is also benefiting from the law’s “tax trifecta” provisions, which are now permanent: immediate research-and-development expensing, 100% full expensing for equipment purchases and an EBITDA-based interest deductibility standard.

• DrinkPAK will use the immediate expensing provision to fund the purchase of new equipment at the new sites, Aster told the NAM.
• “Every dollar we make, we put back into the growth of the business, plus the debt we’re able to raise,” he said. “It’s really been a question of ‘How quickly can we get assets in the ground and start servicing our customers and start consolidating and simplifying their supply chains in more regions?’”

Workforce boom: All this growth has led to a hiring spree at DrinkPAK, which has about 700 employees. But these positions aren’t manufacturing jobs of decades past, Astor said.

• “The equipment we invest in is high technology, high automation. So the jobs we are hiring for in the manufacturing space are very tech-forward. They’re not your traditional, stereotypical manufacturing jobs. They’re very much oriented [toward] how to work with that automation. … and [they] are very well paying.”

Learn more: Explore the NAM’s tax advocacy here, including its new “Manufacturing Tax Wins Across America” flipbook, featuring 50 success stories driven by the permanent pro-growth tax provisions in H.R. 1.