Fichman Furniture Living the American Dream in WNY

Fichman

Sometimes a simple email can make your day.  This happened to me recently when I checked in with a business owner who BNE helped in establishing their first US manufacturing facility.  While I knew the company was doing well, the owner was so exuberant that it really brought a smile to my face and also demonstrated so clearly why the work we do is so important.

Toronto-based Fichman Furniture began working with BNE in 2009, seeking to bring their business to the US.  After assisting with site selection, cross-border due diligence and workforce development, in 2012 the company purchased an 8,000 square foot facility in Holland, New York.

The company designs and manufactures radiator covers, and 95% of its sales are in the US.  The new facility was selected to reduce shipping costs for both raw materials as well as finished goods, without the delays associated with cross-border logistics. And three years later, Erran Fichman, the company’s owner, reports that sales have DOUBLED since the move while shipping costs have been cut in HALF!

While labor costs are about the same, Fichman says in Western New York “you get far higher quality and value.”  He has six full-time employees and hopes to add additional workers in the future and says now he “can really focus on projects that will continue to grow the business.”  Thanks to improvements in technology and machinery, the facility is more productive while maintaining the highest safety standards.  “We never achieved this level of quality and we produce our covers in less than half the time it would take in Toronto,” he added.

Fichman has nothing but good things to say about his experience dealing with WNY officials and businesses, from the local Post Office to his M&T Bank branch in East Aurora, Holland’s town hall to local law enforcement.  The adjectives used were “straightforward, professional and reliable.”  What a testimonial!

BNE is privileged to promote Western New York’s business-friendly attributes on a daily basis. Fichman Furniture’s success story beautifully illustrates that our region has all the right stuff for businesses that are seeking to expand in the US.

by Carolyn Powell, Business Development Manager

New York State Tax Reform Benefits Manufacturers

International companies that expand into the U.S. often apply for and receive major tax incentives.  But what if the tax law were amended to create a significant incentive across the board, without companies even having to apply?  Well, that is exactly what New York State has done.

On March 31, 2014 New York State enacted significant changes to reform its corporation tax laws, most of which took effect January 1, 2015.   Many of the changes are aimed at simplifying an overly complex system of taxation and include the elimination of some taxes and revisions to the tax bases.    Included in the corporate tax reform are changes that will greatly benefit qualifying New York State manufacturers by reducing the income tax rate to 0% and creating a 20% real property tax credit.

To qualify, a manufacturer must have property in New York that is principally used by the taxpayer in the production of goods by manufacturing, processing, assembling, refining, mining, extracting, farming, agriculture, horticulture, floriculture, viticulture or commercial fishing and during the tax year more than 50% of its gross receipts are derived from the sales of goods produced by these activities.

To be eligible for the zero percent tax rate the manufacturer must have either:

1) property located in New York with an adjusted basis for federal income tax purposes at the close of the taxable year of at least $1 million; or

2) all of its real and personal property is located in New York.

The zero percent tax rate applies to the business income tax base and is only available for qualified manufacturing corporations taxed under Article 9-A, franchise tax on business corporations.

The real property tax credit for qualified manufacturers is a credit equal to 20% of real property taxes paid during a tax year for real property located in New York and principally used in manufacturing.  The property can be owned or leased by the taxpayer.  Leased property must be leased from an unrelated third party.  The lease must be in writing and require the lessee to pay the real property taxes. The lessee must make the real property tax payment directly to the taxing authority.

For those that are not qualified manufacturers, the tax rate on business income will be reduced from 7.1% to 6.5% beginning January 1, 2016.

The legislation is a huge step forward for encouraging businesses to expand and grow in New York and it doesn’t stop there.  New York offers a number of attractive incentive programs available at the state and local levels to help businesses locate and grow here.  Additionally, there is no sales tax on machinery, equipment, tools or supplies used in manufacturing and New York State does not have a personal property tax on inventories, machinery and equipment either.  

 

Guest blog: Andrew J. Toth, CPA, Partner at Tronconi Segarra & Associates, LLP, atoth@tsacpa.com ,(716) 633-1373

Canadian Company’s American Plant Awarded for Sustainability Success in Buffalo

Avanti

In 2011, Avanti Advanced Manufacturing opened its first US location in Buffalo, specializing in custom fabrication and plastic injection molding.  They currently have seven full-time employees and plan to double their employment in the next year. This year, Avanti was named a winner in Business First’s Manufacturing Awards in the Sustainability Category.  These prestigious awards are presented to companies in the manufacturing industry that are a major economic force in the region.

Avanti has found US success in a variety of ways and by growing their business slowly.  The company purchased a reasonably priced building and made the needed improvements to it, all while developing and strengthening relationships with neighboring residents and working with local organizations such as churches to recruit employees.  Avanti’s owner and president, Jim Wei, has found that the local residents and members of these congregations have a willingness to learn and a great work ethic, and he provides training on his specialized equipment.

Wei has developed a system to use the outside air to cool Avanti’s machines and save on power costs.  He continually looks for ways to improve efficiency within his operations so that he can then increase manpower and quantity of products manufactured.

One of the products Avanti designs and manufactures is a tile for the building construction industry that is made from recycled materials, allowing the building to claim LEED credits during the construction process.  The tiles are sourced approximately 30 miles from the facility, which qualifies them as a local supplier and meets the requirements for LEED credits.  Another sustainable Avanti product is Ecoglo, which is a no-slip and natural glow-in-the-dark strip for stairs and sidewalks.  These strips have been installed locally at the front entrance of The Mansion on Delaware as well as many high-profile buildings across the country.

The BNE team offers our congratulations to Jim Wei and the employees of Avanti Advanced Manufacturing Corp on your success in Buffalo, NY and your well-deserved award.

by Carolyn Powell, Business Development Manager

Powerful Utility Savings a Plus for Canadian Companies

Many Canadian companies considering US expansion are heavy power users and electricity costs can easily eat away at profits.  As Canadian companies seek US expansion for many reasons (made in USA requirements, supply chain, bridge issues/delays, etc.), being able to manage operating costs is yet another major consideration.

When BNE is working through the due diligence process with a prospective company, energy needs and consumption are discussed.  With a large power user, we typically run a comparison between Canadian costs for monthly usage and what the same usage would cost in Buffalo Niagara.  The company shares its current electric bill and our local utility runs the numbers.  Most times there are significant savings.

Many of the larger power users are companies in plastic injection molding or extruding, food processing, or steel processing and fabrication.  A recent example is a plastics company that currently pays $0.13 per kWh for power in Canada. By comparison, they would pay an estimated cost of $0.082 per kWh for that same operation in Buffalo Niagara and realize a savings of over $18,000 each month. A different plastics company could save more than $20,000 per month by reducing their electric costs from $0.14 per kWh to $0.098 per kWh. We were able to identify over $50,000 in monthly savings for a food processing company currently paying $0.19 per kWh for electric.  Their pricing in Buffalo Niagara is estimated at $0.083 per kWh.

Steel processing in Buffalo Niagara.

Steel processing in Buffalo Niagara.

In addition to standard utility savings, companies may also qualify for special incentive programs that further reduce power costs. New York State offers some programs and others are administered by the local utility.  Many are contingent upon the number of new jobs that the company will be creating and the total investment into the new facility.  Prospective companies should consider these programs once they have identified a potential building or land site.   Thanks to our ability to offer low-cost power, selecting Buffalo Niagara for US expansion can make great economic sense for our Canadian neighbors.

by Carolyn Powell, Business Development Manager

Canadian Expansion Makes Sense in Buffalo Niagara

I’ve been working with Canadian companies for several years and I love learning about their businesses and also why they are looking to expand. There are the typical reasons – the desire for a “Made in USA” label or contract requirement, currency rates, and the ability to gain access to a market ten times larger than their own. But have you ever though about border crossing costs?

Some companies are starting to look at their U.S.-based suppliers and what percentage of sales is going back into the U.S. market. Once companies start to analyze these percentages, they then start to look at border crossing costs. For example, I am currently working with a Southern Ontario company that purchases most of its raw materials from our west coast and thirty percent of its sales go back to the U.S. Another company is sourcing ninety-eight percent of its raw materials from the U.S. and has sixty percent U.S. sales.

There are several layers of border crossing costs to consider. There is the cost of physically moving the goods over the border twice. Then there is the cost of customs paperwork and fees associated with shipping and potential time delays. This becomes critical when it is a food product or other perishable items.bridge

So what is the total cost of moving these raw materials across the border to be manufactured in Canada to then be sold and shipped into the U.S.? Can these costs be reduced by opening a small manufacturing facility in the U.S.? Can the shelf life of a perishable product be maximized by making it in the U.S.? If the answer is yes, it makes sense for Canadian manufacturers to consider a facility in Buffalo Niagara where they can easily manage their U.S. facility and share key resources. All while saving time and money.

Learn more about Canadian Business expansion and view available resources on our website

By Carolyn Powell, BNE Business Development Manager

We All Scream For Ice Cream!

by Carolyn Powell, Business Development Manager

Cornell University’s College of Agriculture & Life Sciences’ Department of Food Science has undergone a major two-phase renovation project. Its Stocking Hall now houses an impressive dairy processing plant, teaching winery, product development kitchen, conference center, two floors of research facilities and a brand new dairy bar. The Buffalo Niagara Enterprise (BNE) staff recently traveled to Ithaca and toured the 10,000 sq. ft. facility that contains impressive pilot-scale equipment for use in research, teaching and extension. Cornell produces milk, yogurt, pudding, cheese and its popular ice cream. In fact, the university worked closely with Perry’s Ice Cream in Akron on the design and layout of the new ice cream facility.

During the tour, we learned that Cornell has 160 cows on site that are utilized for various processes. They are also researching and testing to increase the shelf life of milk from 7 to 21 days. Who knew that milk is 85% water?

Cornell’s Dairy Processing Plant

Cornell’s Dairy Processing Plant

Cornell’s fully automated plant is a resource to New York State businesses for research and product development. They offer incubator space and programs, a state-of-the-art lab for product testing and development, and a wine lab. Their Extension Programs also assist business owners in producing safe, healthy and wholesome foods. They offer a variety of programs from wine and beer to milk and dairy; fruits and vegetables; entrepreneurship and small scale processing; food safety, sensory analysis and many others. For further information visit: http://foodscience.cals.cornell.edu/extension

Top 10 Reasons Canadian Businesses Expand to Buffalo Niagara

Since 2000, BNE has helped more than 60 Canadian companies expand their business to Buffalo Niagara. Each of these companies was unique and had their own reasons why they wanted to enter the U.S. market however there were certainly some common themes. See the following infographic for the top ten reasons Canadian companies expanded here:
Buffalo Niagara Can Jan2014

Around the Region: Wyoming County, NY

Carolyn Powell, Business Development Manager

BNE’s offices are located in downtown, Buffalo, NY – for those of you who are familiar with the city – we are practically right across the street from Shea’s Theatre on Main Street.

It’s great to be located in the region’s core. However, BNE represents the entire region which is a powerful message when working with site selectors. Companies like to consider a variety of options and have different criteria and needs for their business expansions. Our team constantly visits the communities that make up our eight county region of western NY to stay in tune with available assets, sites, and partners.

Recently, the BNE staff took a drive out to Wyoming County and got an update on the great things that are happening out there. We started our day by visiting the Perry Commerce Center.  This is home to Athletica, Once Again Nut Butter, and American Classic Outfitters.

American Classic Outfitters

American Classic Outfitters

The main tenant in the commerce center is American Classic Outfitters. They manufacture sports apparel for high school, college, and professional sports teams. All jerseys are made to order and are crafted by skilled sewers and embroidery experts. It was amazing to see the amount of work that goes into making the jerseys you see athletes wearing on TV. American Classic Outfitters has over 40,000 sq ft and has over 65 employees. What an interesting operation and to see rows of sewing machines, thread and fabrics. Another company located in the center is Athletica. Athletica is a manufacturer of cheerleading and sports apparel for women. They have over 35,000 sq ft and 50 employees. Once Again Nut Butter is a warehouse and distribution company of nut products, such as organic Almond Butter, Cashew Butter, and Peanut Butters. They have over 30,000 sq ft and 12 employees within the building.

Synergy Dairy 1.4 MW digester

Synergy Dairy 1.4 MW digester

Wyoming County is also known for its large dairy farms, livestock and renewable energy.  There are 323 farms in the county, producing over 1 Billion pounds of milk a year, making Wyoming County the largest milk producing county in New York State.  Due to the large number of farms and agribusiness in the county and surrounding counties, Wyoming County now has a 1.4 MW digester located at the Synergy Dairy.  The digester processes both farm waste and food waste from local food companies.  The idea is to mix manure and food waste to create methane gas. The gas would then burn in a generator to create electricity, enough electricity, in fact, to power more than 1,000 homes.  25% of the electricity generated will be used on the farm, and a byproduct of the process will be used for bedding for the animals.  This is the largest co-digester in New York State.

Wyoming also boasts 237 wind turbines in the county with 58 more currently being installed.  For example, the Bliss Wind Farm has 67 turbines that generate 100.5 megawatts of power, and opened May 18, 2008.

With its mix of quaint villages, unique shops, and excellent restaurants and natural retreats there is so much to see and do in Wyoming County.  With top employers like Pioneer Credit Recovery, Morton Salt, API Heat Transfer, Koike Aronson, Prestolite Electric and Markin Tubing, there’s a great quality of life to be had.

Check out more data about Wyoming County here, or if you are interested in learning more about what to see and do in Wyoming, visit www.gowyomingcountyny.com

Access U.S. – A Great Resource for Canadian Business Expansion

By Carolyn Powell, Business Development Manager, Buffalo Niagara Enterprise

Every month, BNE releases an e- newsletter, Access U.S., which provides information for Canadian businesses considering a U.S. business expansion. Below are the top three most popular articles published in Access U.S. since June 2012.

1. Collecting Receivables in the U.S. – July 2012

2. Part 2 – The Dos and Don’ts of Crossing the U.S. Border – September 2012

3. “Snowbird” Tax Info: Canadians Filing U.S. Tax Residency – April 2013

If you are interested in receiving our monthly e-newsletter, Access U.S., click here to sign up!

Click here to read more informational articles on cross border business.

Connecting Businesses with Skilled Trade Workers

by Carolyn Powell, Business Development Manager, Buffalo Niagara Enterprise

Canadian manufacturers that consider expanding their operations into the U.S. often inquire about 1) the availability of skilled trade workers, and 2) the affordability of those workers.

The Buffalo Niagara region maintains a strong infrastructure of workforce development initiatives to fill the needs for not only production line workers but also the skilled trades. Collaboration between the private-sector, educational institutions, non-profit initiatives and manufacturing associations are leading these efforts. Read more here about resources, funding and initiatives accelerating the workforce development delivery system in the region.

Workforce Development Highlight – connecting industry to skilled workers

While experienced workers are important, companies want assurance that local colleges and universities are continuing to educate students in the skilled trades to backfill the current aging workforce with new talent. Buffalo Niagara has several state and community colleges providing high quality and low-cost education, training and certificate programs.

For example, in a recent visit to Alfred State’s SUNY College of Technology I received a tour of the campus and the various degree programs offered.  During our tour, Craig Clark, P.E., Dean of the School of Applied Technologies explained that Alfred State provides a project-based learning experience that is the cornerstone of their culture.  Students work on real-world problems; thus they learn how to think, not simply what to think. As a result, Alfred State has a 99% employment and transfer rate.

Students can enroll in both Associate degree programs (2 years) and Bachelor degree programs (4 year) at the school.  Everything from Business Administration, Architecture to Applied Science and Occupational Studies (degree programs).

  • The Applied Sciences programs include: CAD/CAM, Electrical Engineering,  Electromechanical Engineering,  Mechanical Design Engineering, Mechanical Engineering
  • Their Occupational Studies program includes:, Air Conditioning and Heating, Drafting/CAD, Machine Tool, Masonry, Welding

Workforce Affordability – maintaining competitiveness in a global market

It is also important for Canadian companies to understand what they will be expected to pay potential employees in Buffalo Niagara.  According to the Economic Research Institute (ERI), employees with the same job titles in Alfred’s Applied Sciences and Occupations Studies program can be expected to be paid the following salaries:

AlfredChart-03_11_13 (2)

Canadian companies looking to expand to the U.S. can learn more on our website. To view of list of Canadian companies BNE has helped expand to the U.S., view our success stories.