Braidy Industries: Non-binding 'commitments' back CEO's claim that mill is 'sold out' for years ahead

LOUISVILLE, Ky. (WDRB) – Braidy Industries founder and CEO Craig Bouchard has said on multiple occasions that the startup company has already sold years’ worth of the high-quality aluminum it plans to produce at a $1.68 billion mill it hopes to build in Ashland, Ky.

Last November, for example, Bouchard told the downtown Louisville Rotary Club: “We have sold out Phase One and Phase Two for the first seven years of the existence of the mill – today.”

But in a disclosure filed Wednesday, Braidy Industries told investors that, while it has “prospective customers who have indicated a desire to purchase aluminum” from the new plant, none are contractually committed to do so, and the company can make no assurance that sales will actually materialize.

Braidy Industries says Bouchard’s previous statements are not at odds with the information in the new financial filing. The company said it has been “very consistent in our description of our customer relationships and their purchase commitments.”

“Our use of the word ‘sold’ is commonly understood at this stage of the project development to mean non-binding commitments to purchase, which is customary for the form of purchase commitments in project developments of this type,” Braidy Industries vice president of business development Jaunique Sealey said Friday in an email to WDRB News.

To be sure, one industry expert told WDRB that he would be surprised if big automakers would make prospective commitments to a factory that doesn’t exist, even if informal deals are in the works.

But, speaking to the Rotary Club last year, Bouchard said Braidy Industries was already “sold out” of the plant’s first seven years of production, as American, German and Japanese automakers, as well as “the best aerospace company in the United States,” had “purchased” the company’s aluminum in a “pre-sale.”

Later in the speech, when he was contrasting Braidy Industries’ low costs with those of long-established competitors, Bouchard said: “We accomplished our 200 percent sellout for seven years with one salesman.”

Bouchard appears to have made a similar claim to Forbes, which last month reported that "orders" at the Ashland mill “were already at 140 percent of output that’s expected” through 2026 and quoted Bouchard saying, “All of the car companies bought us.”

In May, Bouchard told Automotive News: "Our mill is now 180 percent sold out from day one through the first seven years of its existence." He added that six of the largest automakers "are part of that founding customer base."

In the document filed Wednesday, Braidy Industries told investors that the company has not actually sold any aluminum that will be produced at the plant, which will be called “Braidy Atlas.”

“None of the prospective customers who have indicated a desire to purchase aluminum from Braidy Atlas are contractually committed to do so,” the disclosure says. “Braidy Industries cannot provide any assurances that these prospective customers will commit to purchase aluminum from Braidy Atlas prior to the commencement of operations of the Braidy Atlas mill in the amounts indicated or at all, or that they will ultimately effect such purchases.”

On NetCapital, the crowdfunding platform were Braidy Industries is soliciting investment, the company says automakers and aerospace manufacturers have "reserved" 200 percent of the mill's capacity for the first seven years.

But in a video posted on the NetCapital page, Braidy Industries says: "Our aluminum mill is pre-sold for its first seven years."

In the email, Braidy Industries’ Sealey said the company has “never deviated in our use of standard terminology or in our characterization of the underlying customer relationships that comprise the description of 200% sold.”

She added that the disclosure filed Wednesday “contains no new information, but rather normal and standard contextualization and explanation of risks for those unfamiliar with the standard practices of our industry.”

Joseph McCabe, president of AutoForecast Solutions, a firm that advises automotive industry clients on production issues, said while primary vehicle manufacturers can negotiate deals with their suppliers years in advance, he would not expect automakers to legally commit to buying from a plant that doesn’t yet exist.

“Ford is not going to stick their neck out with a new company and say, ‘We’re going to buy $20 million of aluminum’ without a proven concept,” McCabe said Friday.

McCabe said he would think Braidy Industries has at least started talking to potential customers, such as Ford’s plants in Louisville and Toyota’s factory in Georgetown, Ky., and may even have “strong verbal” commitments from them if Braidy Industries can deliver the high-quality, low-cost aluminum it promises.

A Toyota spokesman said the company doesn’t comment on supplier relationships, and a Ford spokeswoman was not immediately able to provide a comment.

Company needs financing to build mill

Braidy Industries is trying to raise $400 million through a new round of stock sales to investors over the next six weeks so that it can borrow $1 billion or more needed to complete the mill.

Despite not having the construction financing in place, Braidy Industries broke ground on the mill in June, satisfying a requirement of Kentucky taxpayers’ $15 million investment in the company.

Gov. Matt Bevin’s administration made the state an early investor in Braidy Industries last year as part of an effort to land the plant, which is expected to bring 600 high-paying manufacturing jobs.

Bouchard has said Braidy Industries will be ideally positioned to snap up market-share as a low-cost provider of aluminum sheet used to make cars and trucks, airplanes and spaceships.

He has said the company will capitalize on the growing trend of automakers swapping aluminum for steel to make cars and trucks lighter and more fuel efficient.