Dubai Pipe-Maker Planning Factory, 172 Jobs ; $102 Million Alita Site Here Will Serve Oil, Gas Industry
Dubai pipe-maker plans factory with 172 jobs in Buffalo
A Dubai-based startup company plans to build a $102 million factory in Buffalo that will make steel pipes for the oil and natural gas industry, and employ an estimated 172 workers.
The company, Alita USA Holdings, plans to build a sprawling factory on Rittling Boulevard, off Tifft Street, that would make as much as 150,000 tons annually of high-grade alloy pipes that are used for well casings in oil and natural gas wells, primarily in the United States.
Buffalo landed the project over a site in Houston the company also was considering.
While Alita officials said that locating the plant in Buffalo would add about $9 million a year to its shipping costs, compared with the Houston site, state and local development agencies countered by offering more than $10 million in direct incentives for the project, in addition to property tax breaks and low-cost electricity that will save the company millions of dollars more in the years to come.
"Our investment costs are less because of the help the state and local governments are providing," said Ali Hosseini, Alita USA's president and CEO.
Hosseini said the region's location, close
to the company's suppliers of raw materials, will help hold its costs down, while the region's workforce, with its historic ties to the steel industry, also played a big role in persuading the company to build the plant in Buffalo.
"From what I've seen, in Buffalo, there's no shortage of skilled labor," he said.
And with shale gas drilling booming in states from Pennsylvania to Ohio and West Virginia, Hosseini said Alita's customers in the energy industry also are moving closer to its planned Buffalo factory.
Alita is the second major manufacturer that gets the majority of its sales from the oil and natural gas drilling industry to pick the Buffalo Niagara region as a factory site. Welded Tube, which makes steel tubing that goes inside the well casings, is beginning production at a new $50 million factory on the former Bethlehem Steel site in Lackawanna that ultimately could employ as many as 120.
"Demand has gone up, and there has not been sufficient growth in the U.S. market," Hosseini said, noting that about half of all steel tubing used for well casings currently is imported.
Unlike traditional vertical wells, which tap into oil and natural gas deposits by drilling straight down, new drilling technology is allowing energy producers to tap into vast new deposits of oil and gas by drilling techniques that allow wells to gradually turn horizontally and extend for a mile or more through narrow bands of shale. …