A new $430 million paper mill in Niagara Falls got the formal go-ahead from its owners Monday, clearing the way for creation of 108 new local jobs.
Paper producer Cascades Inc. said it will begin construction next month on a new mill that will make lightweight linerboard, a type of packaging in high demand from retailers.
The plant, located next to an existing 138-employee plant on Packard Road in Niagara Falls run by Cascades' Norampac division, will produce its linerboard entirely with recycled paper fiber.
"It's the biggest investment ever made in our history," said Alain Lemaire, Cascades' president, during a conference call.
The Greenpac Mill project, which will increase Norampac's employment in Niagara Falls by almost 80 percent, has been in the works for four years and will receive extensive government incentives, which Cascades executives valued at more than $100 million over a 10-year period.
More than half of the incentives will come from $60 million in brownfield tax credits over a 10-year period. The project also will receive $5 million in Empire Zone tax credits. The Niagara County Industrial Development Agency in December approved property tax breaks for up to 20 years that will kick in when the brownfield tax credits expire, or sooner if the state were to cancel the brownfield tax credit program.
"I think it took effort from all levels of government to pull this off," said Niagara Falls Mayor Paul A. Dyster. "These are the industries that are going to be the growth industries of the future, so I think it [speaks] very well for the future of job creation in Niagara Falls."
The project also will receive extensive energy subsidies. A 10-megawatt grant of low-cost hydropower from the New York Power Authority will cover about half of the mill's electricity needs, said Marc-Andre Depin, president and chief executive officer of Norampac's containerboard and boxboard group.
The project also will receive $3.5 million from the New York State Energy and Research Development Authority to purchase and install energy efficient systems that will conserve 31 million kilowatt-hours of electricity annually.
Dyster said the 108 jobs will range from high-paying engineering jobs to entry level or security-related jobs. He said construction of the facility could result in the employment of an additional 500 people.
Cascades executives said they expect demand for lightweight linerboard to increase over the next 10 to 15 years, which will help the market absorb the approximately 1 percent increase in North American capacity that will occur when the new Niagara Falls mill starts up during the summer of 2013.
Cascades executives also said the new plant will benefit from cost savings from its location next to an existing Norampac plant. Both plants will get steam from the Covanta Energy plant a little more than a mile away and can share water treatment facilities.
The mill will be able to produce more than 500,000 tons of linerboard a year. Cascades said it already has lined up buyers for 80 percent of that capacity, with Norampac taking 39 percent of its total output.
Cascades will own a nearly 60 percent stake in Greenpac, while Jamestown Container Corp. and a Montreal bank, Caisse de depot et placement du Quebec, each will own 20 percent. Jamestown Container is investing $28.1 million in the project, while the Quebec bank is investing $28.3 million.
Norampac's decision to open the new plant "secures its presence in New York State and reinforces Governor Cuomo's message that New York is open for business," said Kenneth Adams, the chief executive officer of Empire State Development.
Dyster pointed to the plastic-into-fuel JBI plant in the Falls and other recycling ventures as opportunities for future job growth.
"I think as we're successful with a project like this, each time we add one to the economy here," he said, "the likelihood of the next one increases."
News Staff Reporter Charlie Specht contributed to this report.