CANAJOHARIE - Unless it receives some financial aid, Richardson Brands may follow Beech-Nut out of Canajoharie.
Last month, the candy maker said it will need about $14 million in state grants and loans over the next three years. The company said it will need about $6 million soon to be able to stay at its site in the village. The company needs to hear by April 1 that a financial commitment is expected or it will begin planning to move out of the village. Company officials have suggested moving to Connecticut, among other places.
The tough times caused by the recession do not seem to be a factor in this situation.
The Leader-Herald/Bill Trojan
Rich Wilmot, an employee of Richardson Brands in Canajoharie, pours yellow-coated chocolate mints into bins in the coating and panning area at the plant Tuesday.
Richardson Chief Executive Officer Don Butte, speaking from his home office in Maryland, said sales of Richardson's candy increased in 2007 and 2008. Sales are still climbing, Butte said.
"In difficult economic times, people don't give up their sweets," Butte said. "As the economy goes down, sales go up."
He said unlike the banking and auto industry, there would be no bailouts for the food industry because it tends to be stable.
For Richardson, Butte said, the financial aid would be more about profitability.
The $6 million would be split among three areas - a $2 million heating system, about $2.5 million for equipment to replace items damaged in the June 2006 flood in the village, and about $1.5 million in flood-damage repairs.
Richardson also has considered doing other work at its facility in the village. The company says that work will be needed in order for it to expand its operations and bring in more jobs.
"We came here because we liked the buildings and the area," Butte said. "We want to stay here. The flood didn't scare us."
Part of the reason for the financial aid request is Beech-Nut Nutrition Corp. will be leaving for its new town of Florida location in 2010. The new Beech-Nut is under construction.
"We started [planning] a $100 million building project in Canajoharie," Butte said. "That was before we knew Beech-Nut was moving."
Richardson uses heat from boilers at Beech-Nut, which will no longer be available once the baby food manufacturer closes its current location.
"Once we get funding for a new boiler, it will be possible to go on to the next step," Butte said.
The company announced in August its plans to expand and increase the size of its workforce.
The company said it plans to acquire other candy and condiment makers and bring about 250 more workers to the village.
Approximately 120 people are employed at the 180,000-square-foot facility at 101 Erie Blvd. The location has served as the company's headquarters.
Butte said he wants to bring Gravy Master, which Richardson bought in 2006, into the downtown facility. The gravy additive operation is now in Branford, Conn. Moving it to Canajoharie would add 44 jobs initially, with the potential for up to 100 more.
Butte said there is plenty of room in the existing buildings for projected expansion, both in offices and plant production.
However, before that can happen, repairs need to be made to some of the waste treatment areas, and the parking area will need to be expanded before more workers can use the building.
Butte said Beech-Nut leaving the village for the new town of Florida location in 2010 will cause a vacuum in taxes and water usage that Richardson cannot fill.
"We aren't big enough to pick up the whole burden," he said.
Canajoharie Mayor Leigh Fuller said he's hopeful Richardson can stay in the village.
"They are a young, energetic company looking for new business purchases," Fuller said. "They want to expand and are happy with the old Life Saver building."
Butte said he received a letter of commitment of help from state Sen. Hugh T. Farley, R-Niskayuna. The New York State Energy Research and Development Authority also may help with the new boiler, he said.
Cooperstown-based consultant Dave Carlson told the village Board of Trustees on Feb. 3 he's helping Richardson Brands secure a $750,000 grant that would go toward a new boiler or heating system.
Fuller said he'd like to think Richardson Brands is part of a new direction for the village.
"This is a nice village," Fuller said. "We've developed the downtown, we've got a great history and a magnificent museum and library. We need to find a new direction, but we're going to need help."
Once Beech-Nut is gone, Fuller said, if Richardson leaves, the village would be in a "zero-jobs position."
"What I'm feeling is, there's nothing to keep young people in the village," Fuller said.
According to the company Web site, Richardson Mints was established in 1893 by Thomas D. Richardson. The Beechies brand was established in 1936 and joined the company through acquisition in 1988.
In addition to Richardson Mints and Beechies Gum, the company markets Pop Shots candy-filled sports balls and acts as a contract manufacturer for consumer-packaged goods companies.
Richard Nilsen is a general assignment reporter and can be reached at email@example.com