‘Multimillion dollar’ investment on tap
American Keg plant will add technology, capacity, employees
POTTSTOWN » American Keg LLC — the only U.S. manufacturer of kegs — has joined forces with Blefa Kegs Inc. of La Vergne, Tenn.
The companies announced Wednesday that Blefa Kegs has acquired a major stake in the Pottstown-based American Keg.
The move is not a purchase of American Keg, according to owner Scott Bentley. He said the plant will remain in Pottstown and he remains “very much involved” in the company. The investment, he said, will allow American Keg to expand the capacity of the Pottstown plant, improve technology and add employees.
While Bentley could not provide specifics on the amount of Blefa’s investment in American
Keg, he did say that all of the investment for the next two years is committed to Pottstown.
“While I’m proud of establishing American Keg as the only manufacturer of kegs in the US, there is a lot we can learn from Blefa to make our production more efficient. I’m excited to see what we can achieve together,” he said.
According to Paul Czachor, CEO of American Keg, the company knew that to be a strong player in the marketplace, it would need to invest to expand capacity.
“In 2019 we began evaluating what the expansion should look like and should we take a partner on and if so what kind of a partner would we want,” he said.
Bentley added that Blefa has a strong history of making steel kegs and has a strong U.S. presence. With a willingness to invest in a U.S. production facility, Bentley said Blefa could have started from scratch and built new. The company currently manufactures its kegs in Germany.
“They found it was better to join forces with Paul (Czachor) and I and American Keg to combine their technology with our existing staff in Pottstown,” he said.
“At Blefa, we have always taken great pride in our keg technology, developed in Germany over the last 50 years,” Alexander Brand, president & CEO of Blefa, said in a statement. “I have been impressed with the expertise that American Keg has developed in just a few years. I’m looking forward to combining our efforts and skills to produce the best kegs in the U.S. working with Scott Bentley, Paul Czachor and their dedicated team.”
During the course of discussions, Peggy Lee-Clark, executive director of PAID Inc., and a group of public officials worked with Blefa as a facilitating organization to help the company understand the business climate in Pottstown, while the two companies worked through their business discussions.
“We did our best to assure them they were coming into a supportive business environment and we would make the connections necessary,” she said.
The partnership, LeeClark said, allows American Keg to take the organization to a more proficient level.
“It allows for growth and sustainability,” she added.
State Sen. Bob Mensch, R-24th Dist.; Montgomery County Commissioner Ken Lawrence; Dave Zellers, commerce director, Montgomery County; and Justin Keller, Pottstown Borough Manager were also involved in the effort.
Bentley said Blefa was impressed not just with American Keg, but with Pottstown.
“They were impressed with the people and with how much PAID and the borough and county want their business,” he said, adding that it’s a “win” for Pottstown. “Our labor rates are lower, our land costs are lower and utility costs are lower than in Germany. They ran the numbers. They want to make kegs in America.”
There are still a “lot of moving parts” when it comes to planning for the future, according to Bentley
American Keg will continue to use its two Robinson Street buildings for the next two years, and work has begun on designing the layout of the plant and its equipment using Blefa technology, he added.
“We will continue to use some of the equipment we bought here and equipment that was developed by our engineers,” he said.
Bentley added that American Keg will continue to sell kegs made in the Pottstown facility.
“By the end of this year, we think we will be able to make a keg that looks like and is perfect for the kegs they are selling from Germany,” he said.
A group from American Keg will visit Blefa next week to look at their technology.
Blefa has committed to tripling production for the Pottstown facility within three years.
“Now, everyone at American Keg is chomping at the bit to prove themselves. We need to prove to them we can make a keg as good as or better than they are spending in Germany,” Bentley added.
American Keg currently has about 25 employees, according to Czachor. Bentley anticipates tripling the number of employees over the next couple of years.
American Keg has faced market challenges over the past couple of years due to tariffs. In early 2018, the Trump administration imposed tariffs on steel imported into the U.S.
The problem for American Keg, was that the tariffs applied only to raw materials being imported into the U.S. The tariffs do not apply to finished products — like kegs imported from Germany or China.
That meant imported finished kegs were cheaper than those produced by American Keg using U.S. materials.
As a result, American Keg sought a “level playing field,” by lobbying for tariffs on imported, finished, steel kegs.
The effort to get tariffs placed on kegs made in China, Mexico and Germany was successful.
“Our tariff fight was precedent-setting in many ways — we’re the smallest industry that has ever gotten a tariff by far,” Bentley said.
American Keg has been operating at its 31 Robinson Street location since 2016 when it was purchased by Bentley, who also owns VideoRay in Pottstown.
Before that, it was known as Geemacher, a company started in 2007 by Sly Fox Brewing owner John Giannopolous.