A Michigan-based steel processing company plans to build an $18 million plant that will employ about 100 workers beginning early next year in the Buffalo Lakeside Commerce Park.
Delaco Steel Corp. plans to build a factory and warehouse in the waterfront industrial park that will produce steel blanks that will be used primarily by auto makers. Blanking is a process to cut steel coils into shaped pieces before it is stamped into a part.
Local economic development officials said Delaco executives were drawn to the region because of the auto parts manufacturers in the area, as well as in southern Ontario, along with the access to railroad transportation within the industrial park.
"Direct rail and the proximity to (the auto plants) were really what drove this deal," said Thomas Kucharski, the president of the Buffalo Niagara Enterprise economic development and marketing group. "From all the auto industry that's here and up the road in southern Ontario, we were just ideally positioned."
Construction on the new plant and warehouse facility, to be built on a 9.6 acre parcel next to the new CertainTeed plastic fencing plant, is expected to begin shortly. Production could start early next year.
Delaco is expected to receive a wide range of economic development incentives for the project, including Empire Zone benefits, low-cost power and other aid. Delaco executives could not be reached to comment.
Delaco, a minority-owned company that won General Motors Corp.'s Supplier of the Year award from 1998 to 2001, is a division of The Diez Group, controlled by Dearborn businessman Gerald Diez.
Delaco has been focusing on the steel blanking business because of its potential to generate bigger profits than the more competitive business of cutting or slitting steel. Delaco last August bought a controlling interest in a Woodhaven, Mich., plant previously owned by Kasle Steel Corp. that makes steel blanks for car exteriors. That plant now is run through a joint venture in which Delaco owns a 51 percent interest and Kasle holds a 49 percent stake.
Kucharski said the new plant will bring jobs that are expected to pay more than the regional average of nearly $34,700. "It's a good win for us," he said.
Delaco will be the second company to move into the new lakeside commerce park, which opened last year on 200 acres at what used to be the old Hanna Furnace site in South Buffalo. Roads and utilities serving the first 75 acres of the park have been installed and efforts are under way to extend that infrastructure to the rest of the site.
"It's continued confirmation that creating a business park out of land that a few years ago would have been considered fallow was a good idea," said Charles Webb, the executive director of the Erie County Development Agency.
"We really believe there is a pent-up demand for sites that are ready to go," he said. "Unless a piece of land is zoned properly and the roads are in and the utilities are in, it's easy for a company to look elsewhere."