Fraser Industries to secure $40M in financing for shipyard expansion in Superior

A company that owns a Superior shipyard is moving ahead with plans to secure up to $40 million in financing to expand its operations, a move its chief executive says will create hundreds of jobs.

Fraser Industries, parent company of Fraser Shipyards, is seeking funds as part of plans to reduce a four-year backlog of contracts to build and repair ships at its 62-acre production site in Superior.

The shipyard, which has operated for 135 years in Superior, repairs vessels of all sizes in Howards Bay along Lake Superior. Fraser owns several companies that repair and build boats for police and fire departments, ferries and the military.

The Superior City Council recently approved a resolution supporting the company’s plans to seek bonds through the Public Finance Authority. The governmental body issues tax-exempt financing on behalf of local governments in Wisconsin and throughout the nation.

Patrick Kelly, chief executive officer of Fraser Industries, said the funding would be used to invest in new tools, cranes and expanded production facilities at its shipyard.

“This funding will really help us accelerate delivery and get more boats out the door and creates a lot of job opportunities and a lot of job security for everybody at the yard,” Kelly told WPR.

Kelly said the company hopes it’s the first of several phases of growth at the shipyard, saying officials are working toward investing up to $100 million.

During a presentation before the Superior City Council, Kelly said the company’s plans are expected to roughly double its full-time workforce from 200 to 400 employees year-round by the end of 2025. Over the winter months, Kelly said the company could employ 600 workers when the shipyard is busiest repairing vessels prior to the start of the shipping season.

Fraser’s CEO also pointed to a study from the Maritime Administration within the U.S. Department of Transportation, which found 2.7 jobs are tied to every direct job in the shipbuilding and repair industry. He estimated that could mean between 1,400 and 2,200 jobs for contractors they rely on for electrical installations, painting and other work at the shipyard.

Superior Mayor Jim Paine said the shipyard is one of the oldest industrial employers in the city.

“The jobs are generally the kind that we like to see: reliable, high-paying jobs,” Paine said. “That’s a real opportunity for growth in the city. On the whole, it looks pretty exciting. Although, I’m eager to learn more of the specifics of what the project will actually involve.”

Fraser is making investments after Infrastructure Acquisition Partners LLC acquired the company two years ago. Kelly said the shipyard currently uses around 15 acres of the 62-acre site.

“We’ve identified some prime locations to expand our footprint, add another 60,000-square-foot building, which allows us to produce more boats both for the Navy, other government contractors, government groups and police and fire departments all over the country,” Kelly said.

Kelly said half of the company’s business comes from government contracts. The shipyard is currently building several boats for the U.S. Navy that include multi-million dollar contracts for patrol boats that help protect the fleet, as well as boats that aid with response to oil spills. It’s also building vessels that help dock nuclear submarines.

Fraser sought support from city leaders in Superior and Douglas County to secure bonds from the Public Finance Authority because state statutes require local governments, or their highest ranking executives, to approve financing for the project. Both the company and local leaders say neither the city nor the county will face liability for repaying any loans.

Fraser’s CEO said officials are on track to secure funding from investors sometime in the next few months. Once that’s in place, Kelly said they plan to begin making investments at the shipyard in the next year to 18 months.

Superior’s mayor said the city will become more involved about potential effects on surrounding neighborhoods and waterways if the company is making major changes, including new types of shipping or rail development. Paine noted workers have been injured or killed at the shipyard, adding shipbuilding is dangerous work.

“We need to be able to be in a position to protect them, to protect their employees and to make sure that they’re doing everything possible to keep their employees and the broader community safe,” Paine said.

Even so, he said it’s a significant opportunity.

Nick Ledin, president of the Superior City Council, said he would like to see the company use local union labor during the expansion.

“Try and keep as much of this business local as possible whether it is materials or equipment,” Ledin said. “Things along those lines — that they try and keep as much of this money in the city of Superior as possible.”

Kelly said Fraser employs a “union proud workforce” and foresees multiple opportunities going forward. The company estimates about 75 percent of spending will take place locally or throughout the region.