Niacet seeks tax breaks for $40 million expansion - The Buffalo News

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Niacet seeks tax breaks for $40 million expansion

Niacet Corp. is planning to build a $40 million expansion to its food additive business, and it's seeking tax breaks in exchange for building that new production facility in Niagara Falls.

The company also is considering sites in Alabama and Louisiana, according to its application to the Niagara County Industrial Development Agency.

But a 15-year property tax break in the Falls, along with exemptions from sales tax and mortgage recording taxes, would make the company's current 47th Street site more competitive with the lower-cost Southern states, the application says.

The IDA staff calculated that the package sought would save Niacet $1.87 million over 15 years. Besides the reduced property taxes on the new building, Niacet would not have to pay sales tax on building materials or equipment for the expansion.

The company, which employs 87 people, would add 14 jobs over the next three years, according to the application.

In addition to the NCIDA incentives, Niacet applied Tuesday for an allocation of low-cost hydropower from the Niagara Power Project, New York Power Authority spokesman Paul DeMichele said.

Niacet already holds a 2.4-megawatt NYPA power allocation for its current operations in the Falls.

The new production facility would operate around the clock, seven days a week, to produce propionic acid. That's a major ingredient in calcium propionate, which the Niacet application calls the company's "largest volume product."

It's a preservative that extends the shelf life of food, especially baked goods, and inhibits the growth of mold and bacteria. It's the most-used bread preservative in the world, according to Niacet's website. It also can be used to prevent mold in grains used for animal feed.

Niacet, which also has a plant in the Netherlands in addition to the Niagara Falls location, sells its products to the food, feed, pharmaceutical and technical industries. The NCIDA board will consider the matter at its Wednesday meeting and may schedule the mandatory public hearing, leading up to a vote at its December session.

Gregg K. Eagan, Niacet's vice president for integrated supply chain and business excellence, signed the application but did not return a call seeking comment Tuesday.

Niacet is controlled by SK Capital, a New York City investment firm that bought 75 percent of the company this year. CEO Kelly A. Brannen, whose family bought the Niagara Falls plant from Union Carbide in 1978, owns the other 25 percent.

 

 

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