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PEMCO to close Niagara Falls plant

Abdul S. Labi launched Precision Electro Minerals in Niagara Falls in 1987, in a city where he had once worked as a Carborundum manager.

Now Labi is preparing to close the Portage Road business in April, citing higher energy and worker's compensation costs as key reasons. The company, also known as PEMCO, employs 15 full-time workers, plus some part time employees.

PEMCO makes fused silica, which the company describes as melted sand that takes on glass-like consistency. The product is used in precision casting applications.

Labi, a native of Sierra Leone, built his career in metallurgical engineering, with roles at Carborundum, General Abrasives and Combustion Engineering. When he decided in the mid-1980s to launch his own company, Niagara Falls was where he wanted to establish it.

"I knew the people here," Labi said. "I knew the resources here."

In July 2015, the New York Power Authority's board of trustees reduced PEMCO's allocation of 800 kilowatts of low-cost hydropower. According to minutes of the meeting, the Power Authority determined the company had achieved only 16 percent of its capital spending commitment. At the time, the company had 20 jobs, below its commitment of 24 jobs. Its low-cost power allocation was reduced to 350 kilowatts.

Labi said the company's capital spending figures were actually higher, but said incorrectly low figures were submitted to the Power Authority.

"It was an honest mistake," he said.

Labi said the higher power bill that resulted was a burden, as was a sharp increase in his company's Worker's Compensation rates that took effect a couple of years ago.

Another maker of fused silica, based in Tennessee, has offered to hire some of the Niagara Falls workers who lose their jobs, he said.

Anthony Vilardo, director of business development for the City of Niagara Falls, said PEMCO in late 2011 was approved for a $30,000 loan and $30,000 grant to support upgrades to the plant's facilities and equipment. The company repaid the loan, Vilardo said.

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