Incentives won't guarantee Niacet expansion in Niagara Falls, company exec says - The Buffalo News

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Incentives won't guarantee Niacet expansion in Niagara Falls, company exec says

Even if Niacet Corp. receives all the incentives it seeks, the company can't guarantee its planned $40 million expansion would be built in Niagara Falls.

But without a tax break, low-cost power and a cash grant from New York State, it's "highly unlikely" the project will happen in the city, said Salvatore J. D'Angelo, Niacet's manager of quality assurance and regulatory affairs.

The 15-year tax break the company wants from the Niagara County Industrial Development Agency would save it an estimated $1.87 million.

In addition to low-cost electricity from the New York Power Authority, the company wants a $1.2 million grant from Empire State Development.

An IDA board member on Wednesday asked if the incentives would make Niagara Falls competitive with locations in the South.

"I think we would be with the opportunity for some incentives," D'Angelo replied during the NCIDA board meeting.

"This is not a done deal," said Susan C. Langdon, director of projects and finance for the NCIDA.

Niacet manufactures a variety of food and feed additives at its plant on 47th Street in the Falls. The company wants to double its production capacity for calcium propionate, a key additive that inhibits mold and bacteria and bread and other baked goods. D'Angelo called Niacet the world's largest producer of calcium propionate, but it faces potential competition from China and Southeast Asia.

The expansion would add an estimated 14 jobs to Niacet's current workforce of 87.

The company also is considering sites in Alabama and Louisiana.

"The big advantage is shipping logistics. A lot of raw materials are made in the Southern states – Texas, Louisiana, Alabama," D'Angelo told the NCIDA board. "Labor is a big differential as well."

A Texas chemical company ships the main ingredient for calcium propionate by rail to Niagara Falls. Shipping costs would be less to a Southern plant.

D'Angelo told the NCIDA board the chemical operator jobs to be created at the enlarged plant would pay about $31 an hour under terms of the company's contract with the United Steel Workers.

Salaries would be less at a presumably nonunion plant in the South, he said.

Langdon said there has been no threat of closing the existing plant if the incentives are not offered.

Niacet is controlled by SK Capital, a New York City investment firm, which has a 75 percent stake in the company. CEO Kelly A. Brannen, whose family bought the 47th Street plant from Union Carbide Corp. in 1978, owns the remainder of the business.

"They've been a family business here for a long time. We would be eager to keep their expansion here," NCIDA Chairman Stephen F. Brady said.

The NCIDA will hold a public hearing in Niagara Falls at some point before it votes on the tax break package Dec. 13.

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