The Buffalo Niagara Enterprise business development and marketing group is looking to capitalize on the region’s strengths.
With a sluggish economy still making companies hesitant to invest in major expansion projects or commit to big investments, the group is keeping its focus squarely on industries in which it believes the Buffalo Niagara region has compelling advantages.
Over the past two years, a hefty portion of the group’s success has come from projects involving Canadian companies, such as Welded Tube, which opened a steel tube manufacturing plant in Lackawanna last summer. The focus on advanced manufacturing helped the region land projects from Welded Tube to Sentient Science Corp., a software development company that moved from Idaho to Buffalo.
“We’ve been smart, nimble and focused with our resources,” said Thomas A. Kucharski, Buffalo Niagara Enterprise president. “This is our time to take our best shot.”
Still, the economic development environment is challenging. With the economy still recovering from the recession, companies are reluctant to commit to major projects, while the competition from other states and countries for those investments is intensifying.
“It’s an incredibly competitive marketplace right now, with a growing number of communities around the globe fighting for a shrinking number of expansion and investment opportunities,” Kucharski said.
For economic development groups like Buffalo Niagara Enterprise, that makes it especially important to target marketing efforts in a way that is tailored to a particular industry.
“It’s how you get that overall message out, industry by industry,” said George Tobjy, a KPMG managing partner and a site selection expert.
While Tobjy said the flurry of development projects in the Buffalo Niagara region is being noticed elsewhere, the competition for investment is getting more intense. Other states are offering more lucrative incentives and launching more elaborate marketing campaigns to land development projects.
“The rest of the country is ramping up, and they are competing,” Tobjy said. “You have to be out there in front of where the investors are.”
That means targeting manufacturers with significant energy costs, because they could be swayed by the low-cost hydropower that is available here, Tobjy said. For life sciences companies, it means seeking out companies that would benefit from working with Roswell Park Cancer Institute, the University at Buffalo or other entities on the Buffalo Niagara Medical Campus.
With that in mind, Buffalo Niagara Enterprise has been targeting potential projects from Canada, which in recent years have made up a big share of the projects that the group lists as ventures that it played a significant role in landing. More than half of the 22 project “wins” claimed by Buffalo Niagara Enterprise from July 2011 to June 2013 involved Canadian companies. Since the group was founded more than a decade ago, Canada has accounted for 61 projects that Buffalo Niagara Enterprise claims as “wins,” funneling $560 million in investment and 1,500 jobs to the region.
To build on that, the group last year launched a direct mail campaign touting the region’s advantages in advanced manufacturing that was targeted at Canadian manufacturers.
Robert Pike, a Welded Tube vice president, said a variety of factors convinced the company to open a factory in Lackawanna, from the lucrative tax breaks the company received and a strong local labor market to the proximity of its local plant to its heat-treating facility in Welland, Ont., and its U.S. customer base, especially in the growing shale gas development sectors in Pennsylvania and West Virginia.
“We worked together as a team to bring new manufacturing to a region that has not seen much growth,” Pike said.
Buffalo Niagara Enterprise’s 10 project “wins” last year was its second-weakest total over the past decade, though it still met the business development and marketing group’s goals and is expected to bring more than 500 jobs to the region.
Despite the decline in the number of new projects, those projects are expected to bring 522 jobs to the region – the biggest annual total in the past three years – and pump $253.2 million in new investment into the area, the most since its 2010-11 fiscal year. The new jobs are expected to pay an average of $44,819, which is about 10 percent more than the slightly more than $40,000 a year that the average job in the Buffalo Niagara region pays.
Buffalo Niagara Enterprise’s project wins are down from their pre-recession level. Part of that stems from the group’s more focused approach on targeted industries, from life sciences and logistics to advanced manufacturing and back office work.
The group is hoping to land 12 project “wins” during the current fiscal year, bringing $100 million in investment and 800 jobs to the region.