Categories: Schenectady County
Scott Smith said he was overcome with emotion on Wednesday while speaking in Washington about the difficult task of getting back to business after his company’s factory in St. Johnsville was inundated with floodwaters in 2006.
Smith, president and CEO of the foam maker Cellect LLC, was in the nation’s capital to receive the Phoenix Award for Small Business Disaster Recovery from the U.S. Small Business Administration.
Smith joined business owners from Louisiana who lost establishments in Hurricane Katrina, and others who dealt with tornadoes that devastated Alabama.
The company’s plant on New Street in the village was inundated and shut down for about four months.
Not long after surveying the damage, Smith made the decision to lay off about 100 people, realizing a lot of work had to be done to get equipment — which was standing in six feet of sewage-tainted water — back into operation.
Officials estimated the company sustained about $12 million in damage to equipment and product.
One of his first phone calls was to the Workforce Solutions Center to ensure employees got needed benefits, training and access to other employment opportunities.
Cellect LLC announced plans for a $2.6 million expansion just two days before the Mohawk River flooded communities along its banks.
An initial request for help from the U.S. Small Business Administration was denied because the company didn’t meet the 150-employee threshold to be considered a significant employer.
Smith on Wednesday lauded U.S. Sen. Charles E. Schumer for stepping in and impressing on administrators the importance of the local company.
The SBA ultimately provided a $1.5 million disaster assistance loan to Cellect, which added to $1 million from the state and another $300,000 in assistance from the Montgomery County Industrial Development Agency’s revolving loan program.
One part of the company’s recovery went unnoticed: Smith leveraged his own assets and “personally funded a portion of Cellect’s recovery,” according to the SBA.
The company, which produces plastic foam products for the sports, medical and automotive industries, holds at least 18 patents and makes foam insulation found in Nissan vehicles.
Montgomery County Economic Development Director Ken Rose said Wednesday that Smith could just have easily walked away after the flood.
Rose said Smith didn’t “cut his losses” but instead did what it took to get the operation back on track, including remortgaging his own property.
“That’s a tough thing to do. You really have to believe in your company and your product,” Rose said.
Speaking from his cellphone outside the Mandarin Oriental hotel, Smith said the event provided some important publicity for Cellect.
“It was really great exposure,” Smith said.
Smith often credits his employees for the success of the company, and said he was proud to highlight the strength of “employees in upstate New York” during his remarks at the event.
“It actually was pretty emotional,” Smith said.
In an award winner profile on the SBA’s Web site commemorating National Small Business Week, Smith said the excitement of competing with major companies is one of the most satisfying parts of owning the business.
Another satisfying part of owning Cellect?
“Knowing the driving force behind our success is the fact that we have the most dedicated, upstanding, hardworking and driven employees in the foam industry, all from a small community in St. Johnsville,” Smith said.
Since 1998, the SBA has presented Phoenix Awards to business owners and people who “displayed courage, resourcefulness and tenacity in the aftermath of disasters, while contributing to the rebuilding of their communities,” according to the SBA.
Earlier this year, Cellect was awarded $2.08 million toward a renovation project from the state’s Restore NY program. The company was back near full staff at 90 employees in January with plans to begin supplying products in the medical field.