If We Develop It

The latest report from the CBRE Buffalo office sets industrial vacancy rates at a record-low, 4.5%. On the plus side, we can celebrate the fact that there is growing interest in relocating or expanding a business in Buffalo Niagara.  On the minus side, our inventory of existing commercial real estate, especially in the industrial market, is shrinking.  Large, modern, open facilities with high ceilings and other industrial amenities are difficult to identify in any western New York market. Now is the time for local developers to turn their attention to this pressing lack of industrial inventory.

Spec space can be challenging and partially leased space has been difficult to impossible to finance since the recession. While spec space can be a risky and costly endeavor, properly done, it could benefit both the developer and the Buffalo-Niagara region.

Preparing an industrial site for development can take months, maybe years. This means looking both within, and beyond, the city limits, identifying potential parcels that will suit a manufacturing business’s substantial needs — like access to transportation, low cost power, water, parking and more.

The recent spotlight on Buffalo Niagara has led to even more attention from site selectors. Thanks to our industrial past, there is an available and affordable workforce, attractive to out-of-market manufacturers. But without the real estate, our region is going to miss out on golden opportunities that translate to jobs lost for both younger and older workers.

by Steve Blake, CCIM  Partner, CBRE|Buffalo

 

UB CMI – Connecting Advanced Manufacturers to Solutions

Manufacturing remains the third largest employment sector in Buffalo Niagara, representing 50,000 employees and $6.3 billion in gross regional product. To grow and remain competitive, companies require assistance and assets to innovate, update their business models, develop new products to enter emerging markets, and enhance manufacturing capabilities.

Established in 2012, UB’s NYS Center of Excellence in Materials Informatics (CMI) is a community-based resource to help manufacturing firms grow. With a designated business development executive and more than 50 affiliated faculty members, CMI has assisted more than 100 companies in Buffalo Niagara. Across the industry sectors of advanced manufacturing, clean energy, and life sciences, CMI facilitates access to shared equipment, high-performance computing, funding sources and exceptional research and development capabilities.

CMI works with companies of all sizes, from start-ups to Fortune 500 – they understand the processes, products, and programs that drive success. As business development executive, Chris Janson explains,

“Each company and opportunity is unique. When they explain their situation we listen and then customize a solution that best fits their needs. Every day I connect companies with UB’s vast R&D assets and cultivate relationships between industry and the material scientists who are making the next great breakthroughs in technology. And, if we don’t have the right capabilities in-house, we will connect them with valuable members of the ecosystem and collaborative resources.”

Buffalo Niagara offers many benefits to advanced manufacturers such as skilled workforce and low-cost power, but tools like CMI elevate the strength of our region.  CMI, along with Insyte Consulting, World Trade Center Buffalo Niagara, and EWI is a leading partner in Buffalo Manufacturing Works, one of Governor Cuomo’s Buffalo Billion initiatives. Together, they will help companies with applied R&D, market expansion, and process improvement. BNE proudly promotes these resources to companies looking to expand here; demonstrating our region’s commitment and expertise in this industry.

If you are ready to develop or improve your products and services and bring your industry-changing ideas to market contact:

Christopher Janson

Business Development Executive

716.888.4795

crjanson@buffalo.edu

Watch this video to discover what the CMI can do for you:

by Jenna Kavanaugh, BNE Marketing Director

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

BAK to the Future

Bak USA is a company with a conscience.  A manufacturer of low-cost PC tablet devices and mobile smartphones, its philanthropically minded Danish founders, Ulla and J.P. Folsgaard Bak, formed the company to manufacture affordable devices for underserved countries and also to create jobs and a better life for their employees.  Admirable goals on both sides of the equation.

photo credit: KC Kratt Photography

Ulla and J.P. Folsgaard Bak at Bak USA headquarters in Buffalo, NY.

Based on their track record of success at their first factory in Haiti, the Bak’s sought to set-up a U.S. facility in order to expand and extend their reach.  The operation required a clean room environment where operators could assemble devices in a non-assembly line process from components sourced from China.  Integral to the project’s success was keeping overhead costs to a minimum, ensuring that the end products would be affordable and of very high quality. Access to financial incentives was critical in this aspect.  The Baks came to Buffalo in March 2014, meeting with BNE and the University at Buffalo. In typical BNE style, we rolled out the red carpet, grabbed them by the hand and launched the project into hyper speed. We toured potential sites, familiarizing them with service providers and community leaders as well as the region’s diverse workforce.

Along with our proximity to Canada, New York State Governor Andrew M. Cuomo’s START UP NY program, which offers a ten-year period free of state taxes, as well as personal income tax exemptions for employees, was a major factor in Bak USA’s decision to establish its business in Buffalo.  After touring multiple sites, they selected the Compass East building, located on Michigan Avenue in the former Sheehan Memorial Hospital.  This will become Bak USA’s global headquarters as well as the first PC tablet and smartphone manufacturing facility in the country.  Bak USA will invest $840,000 in this location and expects to create 267 new jobs in total.

New York State Governor Andrew M. Cuomo's START UP NY program, which offers personal income tax exemptions for employees, was a major factor in Bak USA’s decision to establish its business in Buffalo.

New York State Governor Andrew M. Cuomo’s START UP NY program was a major factor in Bak USA’s decision to establish its business in Buffalo.

Currently there are employees from 13 different countries working at the plant, which plays into the company’s dedication to nurturing refugees from other nations, paying workers a living wage, and embracing racial and gender equality.  Students using Bak’s affordable PC tablets across the world benefit from the company’s social responsibility.  And its Buffalo employees are assembling more than affordable high-tech devices – they are building a better future for themselves and their families.

BNE Gives a Lift to Petrolift’s U.S. Expansion

Located in the northeast corner of the continent of Africa, Egypt bridges the worlds of the Sahara and the Middle East.  Its long and storied history is centered on the Nile River, whose fertile banks and logistical value have helped establish the prosperous Egyptian economy.  Evidence of Egypt’s economic strength is in its Gross Domestic Product of $272 billion, ranking the country 40th globally, according to the World Bank.

It’s not surprising that Egyptian companies are seeking opportunities for growth and expansion in the U.S.  Recently, Buffalo Niagara Enterprise was instrumental is assisting an Egyptian manufacturer to locate in Western New York.

Petrolift is a Cairo-based manufacturer of web slings and lifts for industrial applications in the oil and gas industry. From manufacturing to inspection and safety training, Petrolift is a one-stop for specialized lifting equipment.  The lifting industry is growing in North America due to the increase in demand of domestic oil and natural gas production.  After 15 years of successful business in Cairo, Petrolift recognized the opportunity to expand its manufacturing operation into the U.S. to capture this growth.

A key driver for U.S. expansion is the acquisition of a coveted “Made in USA” label for its products.  In its consideration of possible American locations, the company began exploring Buffalo Niagara because of its proximity to Canada. The company saw great benefit in locating to a region that allowed easy access to two international markets.

Petrolift appreciated BNE’s experience in assisting Canadian and International companies in making direct foreign investments into the Buffalo Niagara region.  Through our connections with a host of professionals experienced in international business — including attorneys, bankers, and human resources — BNE was able to aid Petrolift in establishing a $1.7 million operation in Eden with ten employees.

View this and other success stories on our website

By Lorrie Abounader, BNE 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

Next Generation Manufacturing & Workforce Development

Several innovative programs have been or will be launched in Western New York designed to enhance and improve the talent pool for regional employers, especially manufacturers, for years to come. These new workforce development programs bolster training efforts available at community colleges as well as the vocational programs offered through Buffalo Public Schools and Erie 1 BOCES.

Here are the workforce development programs that will be game-changers for manufacturers relocating to Buffalo Niagara.

Dream It, Do It WNY’s (http://www.didiwny.com/) mission is to introduce middle and high school students to careers in manufacturing and they’ve been successfully doing so for several years. Its goal is for more young students to choose education paths that will guide them into skilled trades and other critical support roles necessary for advanced manufacturers. Ideally, it will result in a deeper talent pool as these students graduate through the system. Dream it, Do it WNY encompasses school districts, colleges and manufacturers in Erie, Niagara, Allegany, Chautauqua and Cattaraugus counties.

Already underway, and projected to increase in size and scope over the next five years, is the Buffalo Manufacturing Works. The facility will “provide technology solutions to companies across the manufacturing industry through world-class engineering support, research and design, training and strategic services” (http://buffalomanufacturingworks.com/). The Manufacturing Works is partially funded by a $45 million investment by New York State as part of the “Buffalo Billion” pledge from Governor Andrew Cuomo and will help manufacturers to research and innovate new products, improve productivity through “process excellence,” develop new export markets for their products and cultivate a highly skilled workforce.

Currently in the planning phase, the Regional Workforce Advancement Center (http://www.bizjournals.com/buffalo/news/2013/05/02/manufacturing-training-center.html) will open in Buffalo thanks to additional investment from New York State. This facility will be exclusively focused on workforce development, especially the replacement of thousands of baby boomer employees who will retire over the next several years.

These are exciting times for the next generation of skilled workers as well as adults looking for new opportunities in tomorrow’s manufacturing jobs.

 

When it Comes to High Tech, Buffalo Manufacturing Works

While not the flashiest of Governor Cuomo’s Buffalo Billion initiatives, Buffalo Manufacturing Works has the potential to be one of the most effectual of them all. Originally dubbed the Buffalo Niagara Advanced Manufacturing Institute, Buffalo Manufacturing Works will soon become a pillar of the region’s manufacturing sector, providing technology solutions to companies across the industry through world-class engineering support, research and design, training and strategic services. Over the next five years, $45 million will be invested in facilities, equipment and engineering staff creating a state-of-the-art institution for the benefit of WNY manufacturers.

Perhaps my favorite aspect of Buffalo Manufacturing Works is that it creates a major new asset for existing WNY manufacturers while simultaneously creating an incentive for BNE to market to potential attraction targets. In an era where companies across the board are cutting back on research and development budget lines, the opportunity to leverage this great asset will be a significant draw for growing manufacturing firms. Few other locations provide companies with such an advantage.

Resulting from several in-depth focus groups and research, three primary technology areas will dominate Buffalo Manufacturing Works: flexible automation, materials and testing, and processing and fabrication. Columbus, Ohio-based EWI, North America’s leading engineering and technology organization, will operate the institute. The member-driven not-for-profit was selected to operate the Buffalo initiative based on its 30 years of success in central Ohio. Three additional key local partners are involved: the University at Buffalo providing access to early-stage fundamental research and academic facilities; Insyte Consulting assisting with improvements to process and operational productivity; and the World Trade Center Buffalo Niagara helping companies identify new markets and export opportunities.

As manufacturing shifts ever more towards highly technical and advanced practices, this investment will prove integral in continuing the Buffalo Niagara region’s great legacy as a nucleus of manufacturing innovation.

Click here to read more Buffalo Manufacturing Works from the Buffalo News.

by Alan Rosenhoch, Business Development Manager

Low-Cost Hydropower Grants

[Unifrax and others get Low-Cost Hydropower Grant]

Living next door to one of the world’s Natural Wonders as well as two Great Lakes, it’s easy for us to forget that water is a precious and often scarce commodity in other parts of the country as well as all over world.

Thanks to our renewable water resources, Buffalo Niagara is uniquely positioned to offer low-cost hydropower to companies that are seeking to locate or relocate in the United States. Electricity can be a large portion of production costs to manufacturers, and these energy costs are projected to rise in the coming years, particularly as the global economy rebounds from the Great Recession and competition for electric grid capacity rises.

In the past few years, BNE has seen an increase in companies exploring Western New York specifically because of hydropower. Because we can offer not only cheaper utility rates but also a great labor force and an abundance of colleges and universities, you can see why we are an intriguing place for a variety of high-tech manufacturers.

The New York Power Authority has been an excellent partner in our pursuit of securing new jobs for the region. They are receptive to our requests for assistance and provide a multitude of services to those companies we introduce to them. The BNE values that partnership as well as New York State’s hydro-related programs. They are indeed a point of pride and we promote them as one of the many reasons a company should choose to locate in Buffalo Niagara.

by Tony Kurdziel, Business Development Manager

Career Experience Programs Benefit Local Companies and Students

The University at Buffalo (UB) is doubling down for the second year of its highly successful Life Sciences Career Experience Program. Run through UB’s NYS Center of Excellence in Bioinformatics and Life Sciences (CBLS), this experiential learning program offers full-time UB graduate and undergraduate students the chance to work for Buffalo Niagara life sciences companies in a variety of positions, at no cost to the company. Due to the success in its inaugural year, UB has expanded the program beyond life sciences, creating the Advanced Manufacturing Career Experience Program in conjunction with UB’s Center of Excellence in Materials Informatics (CMI).

UB is currently accepting job postings from companies interested in participating; postings must be received by UB no later than September 26. Click the following links to submit postings for each program: Life Sciences and Advanced Manufacturing.

Last year, fourteen local life sciences companies submitted job postings, leading to the placement of 21 students, working 12 hours per week over a 12-week period. Ryan Downey, Director of Quality Assurance at QuaDPharma, was thrilled with his company’s participation in the program:

“Businesses have a difficult job these days finding candidates that can provide value while at the same time fitting well within an organization’s team dynamics. Internships have always been a great proving ground to satisfy this need, but newer, smaller organizations need to accomplish this and be very careful with working capital. The program through UB effectively removes the cost barrier.”

The leadership at QuaDPharma was so impressed with two of their interns that they have hired those individuals following the conclusion of the UB-sponsored program. Downey said these students “have proven to be conscientious, motivated and focused,” just the qualities they were seeking in employees.

The program is open to full-time UB students of any major, so companies may submit postings for positions in any role: business, marketing, manufacturing, information technology, support, quality control, engineering, or lab sciences.

by Alan Rosenhoch, Business Development Manager