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

START-UP NY Creating Jobs and Investment in Buffalo Niagara

Click to learn more about Buffalo Niagara's START-UP NY approved academic institutions

Click to learn more about Buffalo Niagara’s START-UP NY approved academic institutions

START-UP NY continues to thrive in the Buffalo Niagara region, as more colleges and universities formalize their campus plans and open doors to collaborating companies.  The brainchild of Governor Andrew Cuomo, START-UP NY was launched in January 2014 and has approved 83 companies statewide (as of March 17, 2015).

The clear leader across the state has been the University at Buffalo (UB), which can claim 37 of those 83 companies as its own, accounting for 1,452 jobs pledged and $45,122,422 in investment planned. But UB is not the only player in the region, as several more academic institutions are now participating. Nine additional institutions, both public and private schools, have had their plans approved and are ready to work with companies interested in partnering.  Buffalo’s Canisius College received its first company approval: Simply Natural Clothing.   This business, which makes clothing using organic materials, has located at the college’s Women’s Business Center, pledging to create 16 new jobs and invest more than $1 million.

Most recently, Niagara University and Villa Maria College had their respective plans approved.  Niagara offers a 22-acre plot of land that could be developed for the right collaborating company as well as flexible office space on campus. Villa Maria has designated over 2,300 square feet of space on its campus located on the border of Buffalo’s East Side and Cheektowaga.

“This is the beginning of a great opportunity not only for the college, but for our students and the surrounding community to receive additional investment from businesses,” said Dr. Ryan Hartnett,
Villa Maria’s assistant vice president of academic affairs.

BNE works with companies interested in expanding, relocating or starting up in the Buffalo Niagara region, offering expertise in programs like START-UP NY and all aspects of doing business in the western region of New York State.

Here is a list of all ten institutions that are approved in the eight-county region of Buffalo Niagara, with links to their respective campus plans, which include their designated space as well as their target industries:

by Alan Rosenhoch, Business Development Manager

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

 

It’s Happening Now! Check out the New Buffalo

This short video (Paget Films) shows some of Buffalo Niagara’s newest developments and captures the region’s momentum and energy. Nice job Western New York Regional Council and ESDC. Check it out!

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.

Yancey’s Fancy is ‘Hot Stuff’ in Western New York

Guest blog by Rachael Tabelski, Genesee County Economic Development Center

CSA-7775-DC-012-3

August 2014, Yancey Fancy 112,000 sq. ft. facility expansion in progress.

Yancey’s Fancy, an artisan cheese manufacturer, continues to be one of Western New York’s most prominent food manufacturing companies.  Yancey’s, formerly Kutters Cheese, has been operating as a premier cheese maker in Western New York since the post-World War I era.  Limburger was the first cheese offered from the company and today their award winning products spans over 50 varieties of flavored and natural cheeses.

In 2014 Yancey’s announced an expansion of their existing facility.  The company is building a new 112,000 sq. ft. building at the Buffalo East Technology Park in Pembroke, NY.  Currently the company employees over 100 workers and with this expansion they project 50 new jobs will be added.

To learn more about Buffalo East Technology Park visit the real estate listing on BuffaloNiagaraCLS.com. To learn more about the dairy industry in Buffalo Niagara visit BuffaloNiagara.org and view maps, brochures and more.

 

Marketing Tool Provides In-depth Intelligence on Potential Investors

Buffalo Niagara Enterprise recently secured access to fDi Markets, which is a service of the Financial Times. It is a comprehensive online database of cross-border greenfield investments, covering the last decade in all countries and sectors worldwide. This service provides access to real-time monitoring of investment projects, capital investment and job creation. It also tracks and profiles companies investing overseas, and conducts in-depth analysis to uncover trends.

fDi Markets will enable us to:

  • Improve lead generation/identify target companies by allowing BNE to develop a robust pipeline of potential investors within our target sectors and receive instant alerts on companies that are planning to invest abroad.
  • Profile active investors through its profiles of over 60,000 active investors. This will allow BNE to better understand a company’s cross-border investment strategy: where they have invested to date; the types of projects they have invested in; key contact people within the organization and future expansion plans.
  • Develop our investment promotion strategy using trends analysis to understand the size, potential and composition of source markets and sectors.  This will enable BNE to develop strategies on the actual size and growth of the greenfield market.
  • Produce in-depth analysis of key markets and sectors through fDi’s comprehensive trend analysis of each location and sector that BNE targets – including who the key investors are, motives driving investment, key competitors, and more.
  • Evaluate our performance against competitors and “best in class” locations using the number and size of projects secured. We will use this information to benchmark our performance against both competing and “best in class” locations within key sectors and source markets.
  • Enhance our marketing and public relations efforts by using fDi Markets’ data in our press releases and marketing materials.
  • Prepare for overseas investment missions by generating a list of target companies to meet with while on overseas investment missions via fDi’s extensive database.

We believe that the intelligence and research provided by fDi will be a great enhancement to our marketing efforts.  For more information on their comprehensive services, visit www.fdimarkets.com.

By Graham Smith, BNE Research Director

Six Life Sciences Companies will call Buffalo Home

By Alan Rosenhoch, Buffalo Niagara Enterprise

November 12, 2014

43 north winners

The inaugural edition of the world’s largest business idea competition, 43North, has come to a resounding close and 11 winners will now call Buffalo their home. It should come as no surprise that the life sciences industry is very well represented among the winning companies, with more than half operating in this burgeoning sector. With our wealth of industry assets and the growth of the Buffalo Niagara Medical Campus, it’s clear why so many biotech and medical device companies are looking to Buffalo Niagara as a great region in which to grow their business. The region’s rich history of innovation was also showcased during 43North, with the premier of this fantastic new video: Next Things Now.

To earn their capital, each of these companies must establish a major operation in the Buffalo area for at least 12 months. They will all receive free incubator space, guidance from mentors related to their field and access to other exciting incentive programs (such as START-UP NY).

Let’s take a look at how the newest members of Buffalo’s life sciences community fared.

Three of the six life sciences companies impressed the panel of esteemed judges enough to earn them $500,000 each! They are: Eulysis UK, Medical Conservation Devices and Raland Therapeutics. Three more finalists took home a cool $250,000: Asana Medical, Genetisis and HemoGenyx. Additionally, Genetisis was selected as the People’s Choice Award winner, earning an additional $10,000, selected via interaction on Twitter.

Additional information on each of the winners:

eulysis

Eulysis UK
Prize: $500,000
Hometown:
Edinburgh, Scotland

Eulysis UK is a groundbreaking development company focused and committed to optimizing pharmaceutical access globally. In collaboration with the World Health Organization, Gates Foundation and other major institutions, Eulysis UK intends to commercialize the SVS technology on a global scale to provide expanded access to life-saving medicines.

medical conservation

Medical Conservation Devices
Prize: $500,000
Hometown:
Batavia, NY

Based on an exclusively licensed patent portfolio from the University of Buffalo, Medical Conservation Deviceshas developed a low-cost anesthesia machine to expand the use of anesthesia globally, including in later approvals to sedate critically ill patients and provide anesthesia to up to 8 patients at one time.

Rand pic

Raland Therapeutics
Prize: $500,000
Hometown:
Fairport, NY

Raland Therapeutics is a development-stage bio-device company focused on implantable biosensors. The company’s CytoComm™ Biosensor is a real-time monitoring system, which uses living cells to “read” a patient’s physiologic response to chemotherapy. The system also allows the personalization of dosing strategies to reduce the toxicity that so often impacts one’s quality of life.

asanaAsana Medical
Prize: $250,000
Hometown: Miami Lakes, FL 

Asana Medical seeks to improve the quality of one’s health and therefore quality of life by providing a novel treatment for debilitating digestive diseases with a patent-pending medical device that stimulates the body to heal itself. Asana Medical offers a drug-free, surgery-free twist on a proven therapy and targets the $9 billion ulcerative colitis market.

genetesisGenetesis
Prizes: $250,000, People’s Choice Award
Hometown: Mason, OH

Genetesis is a biotechnology company oriented towards optimizing drug design for treatment of heart rhythm disorders by applying novel algorithms that analyze real-time functional heart electrophysiology. Using a patent-pending system, including a non-invasive sensor array and powerful software, Genetesis is able to quantify responsiveness to drugs before they are administered.

HemoGenyxHemoGenyx
Prize: $250,000
Hometown: New York, NY

HemoGenyx is a biotechnology company developing a revolutionary new treatment for blood diseases, such as leukemia and lymphoma. The company leverages a special class of cells, which can generate cancer-free blood stem cells. HemoGenyx’s therapy can dramatically increase the efficacy of bone marrow transplants and eliminate the need for donors.