Townsend Leather has been approved for Foreign Trade Zone status, a move business and area leaders say will make the leather-goods manufacturer more competitive in the global marketplace.
The application was approved by the U.S. Commerce Department late last week, according to a news release from the office of U.S. Sen. Kirsten Gillibrand.
A Foreign Trade Zone designation allows a business to cut import and export costs through reduced duty payments and other incentives.
Tim Beckett, senior vice president of Townsend Leather, said the the company buys a lot of its leather and chemicals from overseas. Reducing the import costs, he said, will allow the business to offset the rising costs of health insurance, the minimum wage increase and state and local taxes.
“In this day and age with continual rising costs from a potential minimum wage increase and everything else, we’ve got to look everywhere we can for a little bit of savings,” he said on Tuesday.
The company produces high-end leather goods for aviation, hospitality, residential, yachting and other specialty uses that are sold all over the world, according to Gillbrand’s release. It employs more than 140 people.
Beckett said on Tuesday it was too early to know exactly what the savings will amount to. There are some initial costs, he said, in new software and reporting procedures to guarantee tight control over what comes in and goes out of the Foreign Trade Zone.
Townsend Leather has been working on the application for the past six to eight months in cooperation with the Fulton County Center for Regional Growth and the Capital District Regional Planning Commission.
Sean Maguire, director of Economic Development for the Capital District Regional Planning Commission, welcomed Townsend Leather to the Capital Region Foreign Trade Zone, saying in a statement that Townsend is “the type of business that we’re interested in having in the program.”
“We expect that this FTZ designation will open new opportunities for Townsend right here at home,” he said.
Ron Peters, executive director of the FCCRG, said this is the first Foreign Trade Zone designation in Fulton County since 1996. He called the news “good for the company, good for job creation.”
“A Foreign Trade Zone designation is a kept secret, I guess, because people don’t understand the process,” he said. “Once you get the Foreign Trade Zone status, it will allow you to be more competitive. I believe the businesses think it’s an overly complicated process, which I believe it was years ago. But it’s streamlined down now.”
The secret seems to be somewhat out in Fulton County. Peters said another business in the area is currently applying for Foreign Trade Zone status, though he said he could not name it yet.
Reach Gazette reporter Kyle Adams at 723-0811, email@example.com or @kyleradams on Twitter.