Feb. 8—The Niacet Corporation is looking at expanding its Niagara Falls facility to improve its manufacturing capabilities for chemicals needed in semiconductors.

It's asking the Niagara County Industrial Development Agency for a 15-year PILOT agreement and sales tax abatement worth a total of $5.5 million, along with applying for federal funds.

The company has had a presence in the city since 1924, with Niagara Falls remaining one of its two primary chemical manufacturing sites, the other in Tiel, the Netherlands. In 2021, Niacet was acquired by the Kerry Group, an Ireland-based company with more than 35 U.S. manufacturing locations.

In documents submitted to the IDA, Niacet says that rapid expansion is necessary to fill a new demand in the semiconductor supply chain, for defense and commercial purposes. This is due in part to the passage of the CHIPS and Science Act last year, which provides $280 billion in funding for domestic research and manufacturing of semiconductors.

If that demand cannot be met, it will encourage foreign investment and force activity outside of the United States.

"In deciding whether to pursue this expansion, Niacet will consider the total costs of capital expenditures, the possibility for future semiconductor market growth, and the availability of federal, state and local incentives," Niacin's documentation said.

Niacet's Niagara Falls facility, located on 47th Street, produces ultra-high purity Anhydrous Hydrogen Chloride, a colorless, corrosive, toxic, nonflammable gas that is necessary to create epitaxial semiconductor wafers. Those are used to etch semiconductor crystals.

Tim Kolb, the facilities manager for Niacet, said it would potentially be a good opportunity for the area, since it would add employment and provide economic stability. An estimated 37 new jobs would be created from the move over the next three years, which would have an average salary of $90,000 per year.

"We want to work with the local leaders to start building out a sustainable workforce in the area," Kolb said.

Of the $5.5 million in tax benefits asked for, $5 million comes from sales tax exemptions, split evenly between local and state taxes, and the remaining $530,893 is from property tax exemptions. It estimates to provide $197 million in economic benefits due to this project.

The expansion calls for a new 25,000 square foot building and renovations to two existing buildings. The estimated cost of the expansion is $121 million, of which $53 million is in construction and improvements, $36 million in equipment, and $32 million in other soft costs.

Listed funding sources for the expansion are $61 million in grants and tax credits, either through the CHIPS Act or state/local support and $60 million in equity.

IDA board member William Ross noted that Niagara Falls has lost so many jobs in the chemical industry over the years and that it's nice that Niacet has remained, is viable, and is a good neighbor.

Agency Counsel Mark Gabriele said the agency's goal is to offer these packages to induce businesses to build these facilities in Niagara County, but there is an outside change they do not come.

Aside from these Niagara County tax breaks, Niacet is also pursuing further funding for this expansion from the federal government through the CHIPS Act. It is waiting to hear back about that before providing a project timeline.

The IDA gave their preliminary approval for the tax incentives, with a public hearing on the project scheduled to take place at 2 p.m. on Feb. 27 at Niagara Falls City Hall.