As Sumitomo Rubber USA prepares for the first phase of a major expansion of its Tonawanda tire plant, company officials are asking for sales and property tax breaks to assist the costly project.
A subsidiary of the Japanese company has applied to the Erie County Industrial Development Agency for an incentive package that includes $245,000 in sales tax breaks on materials purchase and a payment-in-lieu-of-taxes plan for the property, located on a vacant courtyard at 3333 River Rd. and 10 Sheridan Drive.
Sumitomo in October 2015 took full control of the former Goodyear Dunlop Tires North America plant, after buying out its longtime partner.
Now the tiremaker plans to double its consumer production capacity in Tonawanda from 5,000 per day to 10,000 by 2019, and eventually to 17,000. It wants to invest $87 million over the next three years, so it can make more of its tires locally for the North American market rather than importing them from its production facility in Thailand.
To do so, though, it needs additional facilities to increase its manufacturing footprint and add equipment for mixing, bead building, tire building, curing, finishing and extrusion. Plans call initially for the construction and equipping of a 35,000-square-foot building to meet that demand, since the current facilities are full.
"This project is the plan for future growth in North America Tire Business," the company wrote in its ECIDA application. "For our facility to improve our competitiveness, we need to upgrade our machinery and expand our manufacturing footprint."
Because of its "fight for competitiveness" in the market, the company said it needs to pursue "each and every avenue of support" to obtain "all benefits available" for the project. "The ECIDA is an important piece of our strategy to expand our presence in Erie County," the company wrote.
The $9.71 million project includes $3.61 million for the new building, $500,000 for infrastructure work and $5 million for equipment. It will be fully funded by the company.
A public hearing will be held March 29 at 9:30 a.m. at Tonawanda Town Hall at 2919 Delaware Ave. Public comments will be accepted through April 25.
The project has already been approved by the town. Officials hope to start work by May 1 and finish by September 30, with operations starting in the new building by yearend.
The planned project also comes after Sumitomo paid $192,900 to acquire the 6.4-acre former Polymer Applications property at 3445 River Rd., where a fire destroyed a chemical plant nearly 30 years ago. The property, which Sumitomo bought from an ECIDA affiliate, is adjacent to the tiremaker's enormous existing manufacturing complex, but officials said earlier this month that they don't have specific plans for it yet.