Top 3 Reasons Sentient Science Found Success in Buffalo

30 sec. video: Ed Wagner, Sentient’s Chief Digital Officer talks about their success in Buffalo, NY

30 sec. video: Ed Wagner, Sentient’s Chief Digital Officer talks about success in Buffalo, NY

In early 2013, Sentient Science, on the cusp of commercializing their technology that had been over 10 years in the making, decided to open its commercial headquarters in Buffalo. Since that time, the company has experienced remarkable growth and success.

Sentient’s core technology, called DigitalClone, is a material science-based computational testing software as a service (SaaS) that allows companies to dramatically increase product testing, leading to increased product life, reduced failures and information leading to superior mechanical components. The company has grown to approximately 60 employees today and are projecting to grow to over 90 in the near future, fueled not only by increased revenue (the company now has over 18,000 wind turbines under contract around the world), but a recent infusion of capital.

In early 2016, Sentient announced that it had raised $17 million in venture funding from California-based Toba Capital. “This investment will support accelerated growth through added sales, marketing and product investments, along with international expansion,” Sentient stated in a press release.

So what are the top three reasons Sentient has found such success in Buffalo? We recently chatted with Ed Wagner, Sentient’s Chief Digital Officer to find out:

  1. Partnership with UB: when Sentient began scouting possible locations for its HQ, the first criterion was finding a top tier university partner. What they found in their partnership with the University at Buffalo (UB) was even more. “UB allows us to run high performance computing applications on their servers; that means I don’t have to pay to have my own computing facility,” Wagner said. “It’s symbiotic: as we gain more money, we make investments in the university to have more computing infrastructure and resources.” But that’s not all. By collaborating with UB’s high caliber faculty on governmental contracts, Sentient’s bids are that much stronger and are facilitating even greater growth for the company.
  2. Highly talented workforce: in an industry where quality people means everything, Sentient has found the workforce in Buffalo to be top notch. “The quality of people that we have met here by tapping into the universities, not just the University at Buffalo, but the other universities, has been very advantageous for us.”
  3. Affordability: more and more companies are realizing the benefits provided by locating in an affordable region. Buffalo, which boasts a cost of living approximately 4.7% below the national average[1], is a leading example of how that can positively affect a company’s bottom line. “It’s very expensive to start a new company; we could have been in a garage in San Francisco, but instead we’re in an amazing facility here in Buffalo. And more importantly, we’re in a place where the employees that we’re hiring can buy a home. That’s very important to us because we want these people to be successful in starting their careers and in growing as individuals and families. So being here in Buffalo, we’ve been able to not only attract some very high quality talent, but we’ve been able to make sure they’re housed well and they have the things that they want, which are affordable here and not affordable in places like San Francisco or Boston.”

[1] Source: Council for Community & Economic Research; Cost of Living Index (Annual 2015)

by Alan Rosenhoch, Business Development Manager

The Truth About Taxing Manufacturers in New York State

BlogGraphic-04_06_16

If you have overlooked manufacturing in New York State (NYS) due to perceptions about the tax rate, it’s time to take another look – what you find may surprise you.

NYS is in fact one of the least expensive tax states in the country for manufacturers.

In 2014, Governor Cuomo and the State legislature reformed the State’s tax code, bringing the corporate income tax rate for qualified manufacturers to 0%. You read that right. Zip. Zero. Zilch.

But then you ask yourself: if this is really the case, why aren’t third-party thought leaders taking note of this and changing their tune when it comes to NYS as a ‘high-tax state’? In fact, they most certainly are.

The Tax Foundation and KPMG recently released their annual study titled Location Matters: The State Tax Costs of Doing Business[i]. This study, unlike many others, claims to provide a true “apples-to-apples comparison of corporate tax costs in the 50 states,” accounting for all business taxes (e.g. corporate income, property, sales, etc.) and offering a more accurate effective tax rate. The study went a step further, factoring governmental incentives that each state offers for new firms, while also determining the effective tax rates for mature firms that are not eligible for extra incentives.

How does New York State compare?

The results paint a very clear picture: from a tax perspective, New York is one of the most affordable states to do business for manufacturing companies:

  • For a capital-intensive manufacturer, New York has the 5th lowest effective tax rate (2.3%) for a new company to the state.
  • This ranking drops just one place to 6th for a mature firm in the state (4.5%).
  • For labor-intensive manufacturers the Empire State ranks 8th for new companies (3.8%), but does drop to 18th for a mature firm (7.2%). Still, even 18th is a lot higher than many of us have been led to believe!

My team and I at Invest Buffalo Niagara know that when you combine this extremely attractive tax structure with the region’s highly productive workforce, our unparalleled quality of life, and great resources like Buffalo Manufacturing Works, it’s a winning combination for manufacturers.

So come join us and bring your advanced manufacturing facility for the ride!

Resources:

Read our Advanced Manufacturing Guide

 

By Alan Rosenhoch, business development manager, Invest Buffalo Niagara

[i] http://taxfoundation.org/article/location-matters-2015

Koike Aronson Defines Success in Wyoming County, New York

This short video illustrates why companies like Koike Aronson are building big and finding success in Wyoming County.

by Jenna Kavanaugh, Director of Marketing & Communications

Allegany County: Connecting Agriculture and Industry

Land for future development along the I-86

Land for future development along the I-86

In November, members of BNE’s team had the opportunity to tour the many aspects of Allegany County to visit firsthand the resources and assets it has to offer.  Hosted by Allegany County’s Department of Planning and Development, we met with leaders from the county’s Chamber of Commerce, real estate owners and brokers and college officials.

A stop during our tour was Alfred University, home to the Center for Advanced Ceramic Technology, a leader in ceramics engineering and R&D.  The BNE team toured Incubator Works, a resource for business start-ups that need manufacturing and lab space while their product goes through the commercialization process.

The county also has the advantage of being home to Alfred State College, one of the most advanced technical colleges in the nation.  A drive through its Wellsville Campus highlighted the academic programs in the trades that the school has to offer and the hands-on work experienced by the students.

Other visits during our tour were a number of available real estate options, with some properties in proximity to the Wellsville Airport.  Other notable stops on our tour include the Beef Haus Restaurant, a Wellsville landmark and Northern Lights Candle, an employer of more than 200 people and a supplier of candles to major retailers nationwide.

In the end, BNE left the visit with a better understanding of the real estate options, academic resources and infrastructure assets that are available in the county.  Most importantly, it gave us a renewed connection with our partners and the knowledge to help businesses grow and expand there.

Constuction of the Sustainable Advanced Manufacturing Center at Alfred State College

Constuction of the Sustainable Advanced Manufacturing Center at Alfred State College

Lufkin manufacturing facility located in Wellsville, NY

Lufkin manufacturing facility located in Wellsville, NY

by Lorrie Abounader, Business Development Manager

What Holds Back a Canadian Company from U.S. Expansion?

Alan Rosenhoch, BNE Business Development Manager with Jim Anastasiadis, John Petri and Bill McCormick of Magic White.

Alan Rosenhoch, BNE Business Development Manager with Jim Anastasiadis, John Petri and Bill McCormick of Magic White.

Sometimes it’s as simple as finding the right place to start or someone to show you where that starting line even is located. That was the case with Magic White Inc., a company I met last spring at the Restaurants Canada trade show in Toronto. In just a couple short months, a brief conversation with company president Jim Anastasiadis on the trade show floor culminated with the establishment of Magic White USA, Magic White’s first formal U.S. presence here in the Buffalo Niagara region.

Magic White Inc. is a provider of commercial dish washing chemicals and equipment, primarily to the restaurant industry. The company has developed a strong business model in which it provides its customers full service offerings including leasing dish washing equipment, supplying chemicals and servicing equipment in a very timely manner. The company has had a strong track record of success in Canada operating out of the Greater Toronto Area for over 40 years.

The company’s leadership had long recognized the U.S. as a prime market for opportunity, but with no clear path and a business to run Jim and his team had not undertaken the first steps toward this expansion. That’s where BNE came in. In a short period of time, we set up a slew of cross-border due diligence meetings and walked the company through the process. The company utilized its own connections to identify suitable warehouse/office space and moved to lease it, taking occupancy on May 1. With BNE’s assistance, the company was able to successfully establish its first U.S. location in less than two months. Magic White plans to create 11 jobs and invest approximately $120,000 over its first three years.

magic white van

by Alan Rosenhoch, Business Development Manager

AMDOR Opens Doors to Buffalo Niagara

Amdor

After a company expands to Buffalo Niagara we like to visit and see how their operations are progressing . Recently we stopped by AMDOR, a division of Whiting Group, which is a Canadian headquartered manufacturer. Whiting Group selected Buffalo Niagara for their AMDOR location.  After renovating its facility, AMDOR is now fully operational and has been running seamlessly in its first six weeks.

Here is a behind the scenes look at AMDOR’s expansion and the work that went into setting up shop in Buffalo Niagara:

Headquartered in Burlington, Ontario, Whiting Group is an advanced manufacturer with multiple divisions and facilities including a location in Lancaster, NY. The company needed to expand its AMDOR division, which manufacturers roll up doors for fire apparatus, ambulances and other specialty vehicle applications. AMDOR considered expanding at its existing facility in Burlington, or establishing their first U.S. site in Buffalo Niagara, Wisconsin or Florida.

AMDOR weighed several critical priorities in their relocation decision, including:

  • Cost effective location, including infrastructure, workforce and facility
  • Existing building or build-to-suite options that could meet budget and timeline expectations
  • Available and talented workforce
  • Close proximity to Canadian headquarters

Buffalo Niagara Enterprise (BNE) helped AMDOR complete a real estate search for their new facility and provided employee wage data, worker availability and potential benefits costs based on the specific job positions and descriptions. Through the assistance of BNE and other regional agencies, the company gained a better understanding of Buffalo Niagara’s incentive process and completed various incentive applications, meeting required deadlines. AMDOR applied for and received benefits from Lancaster Industrial Development Agency (Lancaster IDA), Empire State Development (ESD), New York Power Authority (NYPA), and New York State Energy Research and Development Authority (NYSERDA). To ensure the company had the needed utilities and supply, BNE connected AMDOR with New York State Electric and Gas Corporation and National Fuel.

AMDOR purchased a 21,000 sq. ft. existing facility on eight acres in Lancaster, NY and completed a 10,000 sq. ft. addition. AMDOR is on its way to hiring 17 people this year, with plans to have at least 28 full time employees by year five.

by Carolyn Powell, Business Development Manager

From Egypt to Eden, NY – TexWeb’s  “Made in USA” Label is a Win

Hany Tadrous, business development director and Ehab Tadrous, Owner at their new TexWeb facility in Eden, NY

Hany Tadrous, business development director and Ehab Tadrous, owner at their new TexWeb facility in Eden, NY

When Buffalo Niagara Enterprise declares a project a regional “win,” our relationship with the company does not end there.  The BNE team continues to be a partner and resource to that new operation as it grows from the “big idea” phase to reality.  A good example is the Egyptian-based company, Petrolift, which came to BNE in 2013 with an interest in establishing a location that would enable them to produce “Made in USA” products.  Petrolift is a successful manufacturer of web slings and lifts for industrial applications in the oil & gas industry.  They are ISO 9001 certified and are a member of the Lifting Equipment Engineers Association (LEEA), the Webbing Sling & Tie Down Association (WSTDA); among other accreditations.  In considering potential U.S. locations, the company began exploring Buffalo Niagara due to our geographic proximity to Canada.

In 2014, after a successfully identifying the ideal WNY real estate and an incentive offer from Empire State Development, Petrolift began working on its U.S. operation, which they named TexWeb.  Work soon began on renovating an old furniture factory in Eden, NY and specialized weaving equipment from Germany was ordered.  To date, TexWeb has invested well over one million dollars to set up the facility and start production.

BNE was pleased to have the opportunity to tour the entirely renovated facility and watch the new weaving and finishing machines in action.  Each machine can continuously weave many strands of nylon and polyester to produce various widths of narrow fabric.  These tightly woven fabric straps are then heat-treated to add additional strength, and dyed in order to color-code and identify the maximum tonnage it can lift.  By completing this process, the narrow fabric is converted into lifting material (webbing) used in the production of various products.   TexWeb produces a web sling that can carry up to six tons, with higher strengths to be accommodated within 3 months’ time.  All of their products are tested and certified using their in-house testing machine in accordance with the WSTDA accreditation.

And they are growing jobs.  TexWeb has hired six employees in the short time they have been in operation, and will be adding another six people to their workforce before the end of the year.

by Lorrie Abounader, Business Development Manager

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