Cambridge Savings Bank (CSB), a full-service mutual bank with a customer-first approach and $6 billion in assets, provided $16 million in funding to support the expansion of Tropical Products, a private label manufacturer of personal, pet and home care products. Based in Salem, MA, the company manages the development of products for a variety of consumer brands that are sold by Walmart, Target, PetSmart, Petco, Amazon and other retailers.
Following the pandemic, Tropical Products experienced an increase in demand for local manufacturing services due to rising freight costs and associated supply chain disruption. As a result, the company was seeking a financial institution to help facilitate the acquisition of land in Salem, and the construction of a nearly 100,000 square foot manufacturing and warehousing facility.
“We are extremely appreciative of the investment that Cambridge Savings Bank is making in our business and in the City of Salem,” Edward Berman, owner of Tropical Products, said. “With the high amount of uncertainty due to inflation and major fluctuations in the market right now, it would have been impossible to undertake this expansion without CSB providing us with a form of long-term and low-cost capital unavailable elsewhere in the market. Thanks to CSB’s investment, we will be able to grow Tropical Products, Inc. exponentially and create more jobs in our home of Salem.”
The total scope for development and execution of the project is $24.8 million. With the support of CSB, providing $16 million of loans; Tropical Products qualified for a New Market Tax Credit (NMTC) that provided more than $5 million in equity for the project. As part of the NMTC transaction, CSB partnered with Mascoma Community Development, a subsidiary of Mascoma Bank, as the Community Development Entity (CDE) and U.S. Bank as the investor. Additional parties integral for execution of this project were consultants Affirmative Investments and CRR.
Tropical Products has seven automated filling lines that employ approximately 60 people, the majority of which are immigrants from more than 20 different countries that include: Haiti, Afghanistan, Vietnam, Cambodia, Pakistan, Dominican Republic, Columbia, Sudan, Honduras and Nepal. The new building will create an abundance of new jobs for people of all backgrounds who are seeking employment in the area.
“When the opportunity arises to support a company like Tropical Products, which shares CSB’s goal of supporting our local communities, we see it as our duty to support them,” Angela Gee, SVP, senior corporate banking loan officer at Cambridge Savings Bank, said. “The capital that we provided was not only an investment in the company’s growth, but also an investment in the growth of the Salem community.”
