X

St. Lawrence County businesses reliant on sales to struggling Alcoa receiving help from economic developers

Posted 3/13/16

By JIMMY LAWTON MASSENA -- At least three St. Lawrence County businesses will benefit from an economic development package aimed at reducing reliance on sales to Alcoa. Fockler Industries with …

This item is available in full to subscribers.

Please log in to continue

Log in

St. Lawrence County businesses reliant on sales to struggling Alcoa receiving help from economic developers

Posted

By JIMMY LAWTON

MASSENA -- At least three St. Lawrence County businesses will benefit from an economic development package aimed at reducing reliance on sales to Alcoa.

Fockler Industries with locations in Massena and Norfolk, Structural Wood Corporation, Waddington and Northern Machining, Norfolk, will receive help from Potsdam-based CITEC Business Solutions, to reduce reliance on business generated by Alcoa.

All three businesses count Alcoa as a major customer for their products, and with uncertainty surrounding Alcoa’s Massena presence, economic developers are hoping for the best, but preparing for the worst.

The plan is funded with up to $36,000 from the St. Lawrence River Valley Redevelopment Agency, up to $30,000 from the Development Authority of the North Country. Businesses receiving the pack will chip in 10 percent of the cost.

The plan funds up to eight “engagements” with CITEC, meaning five are still potentially available for businesses that could be affected by Alcoa’s shaky future in Massena.

“If there is a significant negative event we want to limit collateral damage as much as possible. That’s the basic idea,” St. Lawrence Industrial Development Agency Director Patrick Kelly said.

Under the plan, CITEC will work with the companies expand their customer base and identify additional products they may be able to market.

“These companies in particular do a significant amount of business with Alcoa. The idea is to get them into a position where if something were to happen with Alcoa, there won’t be a domino effect,” he said.

Each of the companies will receive two-phase help from CITEC. The first phase involves planning and the second phase is for executing the plan. Each phase is valued at roughly $5,000.

The initiative originated in the wake of Alcoa’s plan to idle the smelter at Massena’s Alcoa West plant and new it would not be modernizing the east plant, despite promises made to the state in return for public subsidies. Alcoa’s plan would have cost the county nearly 500 jobs.

“When Alcoa announced they were not going to modernize, vendors who rely on Alcoa’s business were concerned about the impact that would have on their companies,” St. Lawrence Industrial Development Agency Director Patrick Kelly said.

Alcoa later agreed to retain 600 jobs through March 20, 2019, in exchange for a $68.8 million corporate welfare package. Under the agreement Alcoa will receive $30 million from the New York Power Authority in power discounts and $38.8 million from the state.

Despite that deal, Kelly said the ball was already ready rolling on a plan, and with uncertainty after the March 2019 date, developers believed there was still benefits to helping the companies diversify.

“Being overly reliant on one customer is never a good thing. If Alcoa remains here and is strong, this is still good for the businesses. It’s being proactive and helping them diversify,” he said.

Kelly said the program is quite a bit different from a typical package offered though the IDA, but said that River Agency has a broader guidelines on how it can spend funding.

“The idea is not traditional, but that’s one of the strengths of the RVRDA,” he said.

Kelly said work is already underway with the three companies and potential for additional businesses to take advantage of the program are available.