AXH Air Coolers, LLC

As a leading supplier of air-cooled heat exchangers for the gas compression industry, AXH serves an international customer base from its facilities in Claremore, OK. Although the principals and organization have been in the business for decades, with manufacturing having been done by other companies, AXH is beginning to expand and manufacture its own products. By so doing, AXH can now serve its growing customer and market base from product design through sales and delivery.

Challenge
Changes in AXH’s business model meant the addition of up to 350 employees as well as the investment of $5 million in facilities and equipment. AXH was extremely interested in finding ways to offset manufacturing start-up costs by securing economic incentives. SSG stepped up to the challenge.

Approach
SSG began by collecting and reviewing applicable job growth and capital investment growth data, then analyzing the amount, location and timing of that growth. SSG then identified all programs available to AXH and calculated the potential savings for each program. Since some overlapping benefits required AXH to choose between programs, SSG, presented all options and assisted the client to determine which presented the best fit with ongoing growth objectives at AXH.

AXH chose to proceed with two primary programs. The first, the Oklahoma Quality Jobs Program, provides the company a cash rebate of up to five percent for new jobs that it adds in the state. The second, the Manufacturers Property Tax Abatement Program, allows AXH to partially defray its $5 million capital investment through the elimination of property tax on that investment for five years.

Result
AXH expects to net an estimated $8 million in cash savings over the next ten years through the Oklahoma Quality Jobs Program. The company also looks to realize another $150,000 in savings over five years through participation in the Manufacturers Property Tax Abatement program. Importantly, AXH will realize savings immediately, with the first benefits received within a month of manufacturing start-up in March of 2005. This will allow AXH to reinvest in its new manufacturing division, rapidly increasing its competitiveness as a new producer of air-cooled heat exchangers.