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Steuben Foods seeks big expansion of Elma complex

Steuben Foods wants to dramatically expand its Southtowns operations with a new warehouse and drive-in racking system, if the Erie County Industrial Development Agency is willing to help out with $460,000 in tax breaks.

The food and beverage manufacturer, which focuses on dairy and plant-based products, is asking for tax breaks to support construction and equipping of a new 82,500-square-foot addition to its current 474,535-square-foot complex at 1150 Maple Road in Elma.

The $16.85 million project would include over 6,000 pallet rack spaces, as well as the purchase and installation of a robotic palletizing system. That would replace the use of third-party contractors that Steuben uses now to stage, wrap and secure its products on pallets. It would allow the company to do the job more efficiently and boost how much is stored that way, the company said its application to the ECIDA.

Steuben said it would hire full-time employees for 27 skilled positions that pay an average of $35,421, including machine and palletizer operators, maintenance workers and other warehouse staff.

The company says it needs to expand its northeast warehouse to support increased production volume and growth, so it can remain competitive in the industry against rivals located outside of the state.

"Currently, there are a number of existing and prospective customers that have requested additional production capacity at Steuben's facility, and completing the project in its entirety is necessary to ensure Steuben is able to take on the commitments each of these customers require," the firm said in its application.

But the company says it can't complete the full scope without ECIDA help, and would otherwise have to cut parts of the plan – including the number of new jobs it would create. It's asking for $460,756 in sales tax breaks.

"While some parts of the project might be completed without agency support, funding from the agency is crucial to allow Steuben to fully invest and pursue the project in its entirety as needed," the company wrote in its application. "The project represents a significant cost to Steuben, and without financial assistance from the agency, it will be forced to consider and implement cuts to its proposed project."

That would prevent it from fully meeting the demands of its customers, possibly turning some of them away or limiting production for others, the company said. In turn, officials added, that will drive those customers to Steuben's competitors outside Erie County or even outside the state.

Project expenses include $8 million for construction, $353,376 for infrastructure, $5.4 million for manufacturing equipment, $1 million for furniture and about $2.1 million for professional services and design costs. Financing will include $16.5 million in bank loans and $356,551 in company investment, but the company also plans to ask Empire State Development Corp. for state assistance.

Officials still have to obtain municipal site plan approval, but hope to start work by April and finish by the end of October.

Founded in 1981, Steuben processes and packages an array of products in extended shelf-life containers for a variety of customers, including some of the world's biggest food companies. The company employs 555 full-time workers, including scientists, laboratory technicians, mechanics and equipment operators and operates on 154 acres.

Products include almond, soy and coconut milk, flavored milk, sweetened condensed milk, evaporated milk, coffee creamers and drinkable yogurt.

Steuben officials also noted that they've received incentives from ECIDA in the past for expansion projects that enabled the company to stay competitive and grow locally, and always "complied with its obligations and promises made to ECIDA in connection with such funding."

The company completed an 80,000-square-foot expansion of its existing low-acid processing and packaging facility in December 2016, including 20,000 square feet to handle grains, nuts and seeds. Steuben has used that operation and plant-processing technology to turn almonds, hazelnuts, cashews and walnuts into various "Milked Nuts" beverages, and has also made drinks from brown rice and oats.

In addition, its five leading research scientists are now working with the state Department of Agriculture and Markets and Cornell University to study hemp processing and to develop products made with industrial hemp seeds, such as milks, creamers and fiber-based products. Empire State Development already offered a $500,000 matching grant to the company to purchase a specialized press and dryer.

"Steuben is optimistic that its new hemp-based milk products, the main ingredient of which can be grown in New York, will capture a large segment of market share for plant-based beverages," the company wrote.

 

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