A final part of the financing package for the continued operation of the AL Tech Specialty Steel Corp. was put in place Monday by the board of directors of the Chautauqua County Industrial Development Agency.
The Board approved a $1 million loan, with a recommendation to the Job Development Authority that the funds be made available to the company. The JDA does all financing above $300,000, Board chairman Frank Pagano explained.
Kevin Sanvidge, AL Tech director of administration, said Monday that the Bankruptcy Court has confirmed the plan for the formation of a new company. He hopes the closing will be held by Oct. 8, but that is subject to change. The new company will be owned 44 percent by the United Steelworkers of America, 44 percent by Atlas Steel of Welland, Ont., and 12 percent by the unsecured creditors.
The company plans to spend $25 million in capital improvements over five years. These will allow the company to be competitive in the international market, Sanvidge said. The state has committed to $15 million through the Empire State Development Corp. and the JDA.
Also, the company hopes to add 80 jobs in the next five years for a total of 380 people.
The company has core business in stainless steel rod, bar and wire. Sanvidge said the company is looking at expanding the product line to include stainless steel reinforcing bars for highway construction and for bridges.
"Canada is leading the way," he said. "Stainless is 10 times as expensive as carbon steel, but lasts forever," he explained.
Most of the market for the company's steel is domestic, he added. The chief competitors are in Asia and Italy.
The new equipment will take from nine months to a year to deliver, Pagano said.
Also, the company has negotiated an assessment reduction with the city that cut the property taxes in half to offset environmental cleanup costs.
In other action, the Board approved a $1 million loan from the AL Tech Revolving Loan Fund for a $4.9 million expansion of Cliffstar Co. Inc., a food processor. Again the recommendation must go to the JDA, which will write the check.
The 123,000-square-foot warehouse will permit the expansion and add 27 to 35 jobs, according to Pagano. The building is almost half completed, he said.