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FAST LANE - October
2006
“It’s not every day that you get to celebrate the grand opening of a nationally-known company like T. Marzetti and at the same time announce the location of a sister company to the same community,” Hart County Judge-Executive Terry Martin said. “Thanks to the tremendous teamwork of both local and state officials and the fine people from T. Marzetti and Sister Schubert, this has become a reality for Hart County.” T. Marzetti is an Ohio-based manufacturer of salad dressings, dips and other specialty food products for the retail and food service markets. The company’s new Hart County facility represents an investment of some $41 million and brings nearly 260 new jobs to the area. Sister Schubert’s is a subsidiary of T. Marzetti that manufactures yeast rolls, frozen dinner rolls and other bread products for the retail and food service industries. The new 105,000-square-foot Sister Schubert plant will be built on property adjacent to the T. Marzetti operation. The new plant is expected to be operational by Summer 2007 and will employ nearly 300 people. “The grand opening of T. Marzetti Company and the new location of Sister Schubert’s Homemade Rolls will create more than 550 jobs for the people of Kentucky,” said Gov. Ernie Fletcher, who attended the ribbon-cutting ceremony. “This is a remarkable day for Hart County. The location of both projects speaks volumes about the workers and business climate in the community and state.” NEWPORT I pisco Inc., a Canadian steel manufacturer, is acquiring Newport-based NS Group, Inc. in a transaction valued at $1.46 billion. NS Group manufactures and markets seamless and welded tubular steel products used in the drilling, exploration and transmission of oil and natural gas. The company has approximately 260 employees in Northern Kentucky and some 1,100 more at its four facilities in Pennsylvania, Oklahoma and Texas. IPSCO Inc. is a low-cost steel producer that operates steel mills and pipe mills and has approximately 2,800 employees in the United States and Canada. The company also produces a wide range of tubular products, including oil and gas well casing and tubing, line pipe, standard pipe and hollow structurals. The transaction joins complementary product lines and broadens IPSCO’s energy product offering by adding NS Group’s businesses, which include seamless pipe and premium oilfield services provided by Ultra, NS Group’s recent acquisition. “This transaction represents a compelling strategic opportunity for IPSCO to become the leading North American supplier to the robust oil and natural gas sector by significantly expanding our pipe product offering and production capacity, as well as our geographic footprint,” IPSCO President and CEO David Sutherland said. Following the transaction, the company is expected to have combined annual revenues exceeding $4 billion. ELIZABETHTOWN
Sales of Ford’s large pick-ups and SUVs have declined in recent months as fuel prices soared across the nation. In an effort to stem its losses, Ford announced earlier in the year that it would close 14 plants. More recently, the company said it would temporarily close some of its plants in order to reduce production of its slower-selling models. As a result of those changes at Ford, Dana has released 123 workers at its plant in Elizabethtown and laid off another 100 employees at its facility in St. Mary’s, Ontario. The September layoff represents the second time this year that the Elizabethtown plant has experienced a staff reduction: Forty-seven employees were laid off in February, shortly after Ford announced its plans to close plants. In early March, Dana filed for Chapter 11 bankruptcy protection. The most recent layoff leaves the Elizabethtown plant with around 750 employees. BOWLING GREEN Pan-Oston will be adding 200 full-time jobs as part of the company’s expansion of its corporate office space and manufacturing facility in Bowling Green. The company is adding 105,000 square feet to its existing 180,000-square-foot manufacturing facility, where it produces custom metal and wood store fixtures and check-out counters for the retail industry. The expansion represents an investment of some $8 million, which also includes the purchase of automated fabrication equipment, according to Pan-Oston President Jim Vance. The company presently employs 340 people. The additional staff will give the company the extra manpower needed to help launch Pan-Oston’s new Utopia Self-Scan convertible checkout unit that is being marketed to national retailers. Pan-Oston Co. is a majority-owned subsidiary of Houchens Industries, a Bowling Green-based company that has interests in a wide range of industries, including manufacturing, construction, insurance, grocery and tobacco. The company has $3 billion in annual sales and with 10,000 employees, is recognized as the largest employee-owned company in the United States. WESTERN KENTUCKY
According to information released by the state, new area codes can be established in one of two ways. An existing area code can be split geographically, a course that Kentucky has taken in years past. Area code 270, which covers the western half of Kentucky, was created from a portion of area code 502 in April 1999, with area code 859 carved out of area code 606 a year later. A new area code also can be created as an “overlay” on an existing area code. This option, which has been used mostly in major metropolitan areas, requires 10-digit dialing for local calls. Although an area code can, in theory, include as many as 10 million potential phone numbers, there actually are far fewer numbers available for use since certain sequences of numbers are not used. PSC Chairman Mark David Goss said the commission is committed to an open process as it considers the creation of Kentucky’s fifth area code. “We want to hear from the telecommunication industry, from businesses that might be affected by the change, and from area code 270 residents,” Goss said. “We fully recognize that the decision we make will have a significant impact on the economy and on people’s daily lives.” MADISONVILLE Summitt Molding and Engineering is expanding its operation in Madisonville, where it produces injection molding, component sub-assembly and plastic part fabrication for a wide variety of industries. The expansion, which will double the company’s space and create 106 new jobs, represents an investment of some $5.2 million. Phase I of the two-phase expansion is already under way with the addition of 24 employees. Phase II is scheduled to be completed by year’s end. Summitt has purchased a 20,000-square-foot warehouse located on property adjacent to the company’s existing 20,000-square-foot facility, where it employs 24 people. BULLITT COUNTY JOM Pharmaceutical Services Inc., a subsidiary of health care giant Johnson & Johnson, has selected a site in Shepherdville’s Settlers Point Business Park on which to build a 325,000-square-foot distribution center. The project will create approximately 100 full-time jobs with wages ranging from $15 to $31.25 per hour, excluding benefits. The project represents an initial investment of nearly $15.5 million in machinery and equipment in the facility. The Shepherdsville site was selected because of the centralized location it offered the company, said Courtney Billington, vice president of Johnson & Johnson’s Global Pharmaceutical Supply Group in North America. The distribution center will serve 11 Johnson & Johnson operating companies. STATE
CandyRific, a Louisville company that produces and sells novelty candy, was the highest-ranking Kentucky company on the list, coming in at No. 181. The company experienced a 644 percent growth rate between 2002 and 2005. ZirMed, a Louisville software company that handles patient billing for clinics and physicians’ offices, was ranked No. 337. ZirMed’s three-year growth rate was 402.1 percent. Lexington-based Precision Staffing earned the No. 407 spot on the list, with a three-year revenue growth rate of 355.2 percent. The company, which also has offices in Louisville and Shelbyville, provides temporary workers to large companies. J.Y. Legner is a Louisville-based company that provides staffing, human resources management and engineering support to companies in and around Kentucky. The company’s three-year revenue growth of 346.3 percent put it at No. 423 on the list. Contours Express, headquartered in Nicholasville, was listed at No. 430, with a three-year growth rate of 341 percent. This is the third consecutive year that Contours Express, which franchises a chain of women-only fitness facilities, has earned a spot on the Inc. 500 list. SILVER GROVE Lafarge North America, Inc. has broken ground on a $120 million expansion of its existing plant in Silver Grove, where it produces gypsum drywall products. The new 435,000-square-foot development will include construction of a new gypsum processing mill and a second board line at the site. The expansion is expected to add 100 full-time jobs, nearly doubling the current number of employees, and will increase the annual capacity of the plant from 900 million square feet to 1,600 million square feet. An economic impact study by the University of Cincinnati last December found that in addition to the new jobs at Lafarge itself, the expansion will create nearly 1,500 new jobs related to facility construction, operations that supply and support the facility, and retail spending in Northern Kentucky. Construction is expected to be complete by the second quarter of 2007. HARLAN COUNTY
The state has assumed the operations of The Benham School House Inn, the Kentucky Coal Mining Museum and the Train Depot in Lynch. “This is a fantastic opportunity to really showcase the tourism possibilities in Southeastern Kentucky,” Commerce Cabinet Secretary George Ward said. “The region has a very unique story to tell about the history of the company towns and the coal mining industry. People are very interested in hearing about how this all evolved.” The state funding will primarily address infrastructure improvements at the School House Inn, which has 30 guest rooms and a banquet hall – once a gymnasium - that can seat up to 350 guests. The inn was built in 1926 by Wisconsin Steel Corporation (later known as International Harvester) as a high school and elementary school for coal camp children. The inn has stayed true to its schoolhouse roots: Dark green lockers still exist and rooms are numbered after graduating classes. The Kentucky Coal Mining Museum is housed in the old commissary built by International Harvester in the 1920s. The museum features four stories of exhibits on the history of mining and the life of the coal miner. LOUISVILLE
“While Brown-Forman has had a variety of interests in Mexico for many years, the acquisition of Casa Herradura is our most significant investment in the country and will enable us to continue our company’s international expansion,” Brown-Forman Chief Executive Officer Paul C. Varga said. “These brands will also help us advance our business within the growing Hispanic population of the U.S.” CLARK COUNTY
EKPC says it needs the additional generating capacity to meet rising demand from its 16-member electric cooperatives and the additional load that will be created when it begins supplying power in 2008 to the Warren Rural Electric Cooperative Corp. (RECC). The coal-fired unit, with a capacity of 278 megawatts, will be the first at Smith. It will use a technology known as circulating fluidized bed (CFB), which burns coal more cleanly than conventional boilers without the need for extensive pollution-control equipment. EKPC last year began operating a nearly identical CFB unit at its Spurlock Generating Station in Mason County, and is building a second CFB unit at Spurlock. EKPC currently operates seven gas-fired turbine generators of varying capacities at the Smith facility. The five additional gas-fired turbines will have a capacity of 90 megawatts each and will be used to supply power at times of peak demand. Warren RECC currently buys its electricity from the Tennessee Valley Authority, but will end that relationship in 2008. The additional generation will reduce EKPC’s need to purchase power from outside sources. CLAY Gamma Services International (GSI), a safety and production assistance company headquartered in Webster County, has developed the first government-approved proximity protection system for miners. The TramGuard system, the result of a joint venture between GSI and Geosteering Mining Services, provides remote control continuous mining machines with automatic proximity detection and shutdown to guard against mine personnel being run over, crushed or pinned when they are positioned in a hazardous area. Since 1984, there have been 29 fatal accidents related to the use of remote-control continuous mining machines. The TramGuard system consists of a personal alarm device worn by the continuous miner operator or others needing protection. The system elicits both audible and visible warnings to prevent contact with the turning radius of the continuous miner. If the continuous mining machine is closer to a miner than a specified distance, the system will shut down the tram motors and hydraulic booms. “These systems can be a significant tool to reduce fatalities and serious injuries at mining operations,” said David G. Dye, acting administrator for the U.S. Department of Labor’s Mine Safety and Health Administration. “They provide consistent warning and shutdown commands and effectively keep continuous miner operators from entering the hazardous area around the machine.” STATE Kentucky’s workforce training programs have once again received high marks in Expansion Management magazine’s annual survey of industrial site selection consultants. In the annual survey, consultants were asked to identify states where they found the best workforce training programs while investigating potential sites for their clients. Programs were judged in terms of financial value, ease of usage and applicability. This year’s ranking, in which Kentucky was eighth in the nation, represents the fourth consecutive year in which the commonwealth has been included in the listing’s top 10. The magazine’s July-August issue also highlighted the Bluegrass State Skills Corporation (BSSC), a state agency that works to stimulate economic development through skills training programs designed to meet the myriad needs of businesses and industries. “Kentucky’s top 10 ranking is a testament to its ability to provide companies with a well-trained, highly skilled workforce,” said Ken Krizner, managing editor of Expansion Management. “On-the-job training is no longer an option. Companies that are expanding and relocating want a workforce that is trained from the day operations begin.” MERCER COUNTY A 50-acre site just north of Harrodsburg has been selected for the newly announced Kentucky Agriculture Heritage Center, a multimillion-dollar museum that will chronicle Kentucky’s role in agriculture. The museum will feature a walking tour of historical agriculture, interactive exhibits, a meeting complex that will accommodate up to 800 people, programs targeted for schools, and a retail outlet that will sell Kentucky products. Based on figures from similar facilities in Indiana and Mississippi, the new center is expected to draw upwards of 200,000 visitors each year. The new center is being built on land donated by Mercer County native Ralph Anderson, owner and founder Belcan Corporation, a Cincinnati-based engineering company. According to local reports, Belcan employees have already started design work on the project, which is expected to cost between $24 and $30 million. The center brings to fruition an idea that has been in the works since 2002, when the Kentucky General Assembly approved a resolution to study the feasibility of a museum of Kentucky agriculture. Concern had been voiced that as the number of farms in the state declined, the commonwealth was losing the traditions and culture associated with Kentucky agriculture. The new center is expected to open by 2010. LEXINGTON Intranasal Therapeutics, Inc., a specialty pharmaceutical company, has received a $39.1 million financing commitment from a group of venture investors that will be used to advance the company’s clinical programs and manufacturing capabilities. SV Life Sciences, headquartered in Boston, led the Series A financing, which included the participation of Burrill & Company (San Francisco), Tullis-Dickerson (Greenwich, Conn.), Fidelity Biosciences (Cambridge, Mass.), ApjohnVentures (Kalamazoo, Mich.), Fort Washington Capital (Cincinnati, Ohio), Commonwealth Seed Capital (Lexington, Ky.), and Kentucky Co-Investment Partners, LP, a Fort Washington Capital-managed fund for the University of Kentucky. Lexington-based ITI plans to use the new funds to launch a nasal spray for acute pain and to advance trials of an intranasal version of lorazepam, a medication used for treating seizures and anxiety that is currently in Phase 1 trials. ITI currently has a total of four products in clinical development, with several others in earlier stages of development. Funding will also be used to expand ITI’s proprietary manufacturing facility at the UK’s Coldstream Research Campus in Lexington and the company’s corporate offices in New Jersey.
TENNESSEE
During the ceremony, Nissan executives also announced a $34.7 million capital investment to further expand the plant in order to accommodate the addition of cylinder block casting production. The new 63,000-square-foot forging facility provides the capacity to produce 1.1 million crankshaft forgings – the main rotating shaft at the bottom of an engine – each year for Nissan and Infiniti vehicles built at the company’s plants in Smyrna, Tenn., and Canton, Miss. Forgings will also be exported to Nissan’s vehicle assembly plant in Aguascalientes, Mexico. The $48 million facility employs approximately 60 employees and is expected to reach full production by March. The addition of cylinder block casting represents the fourth expansion of the Decherd facility since it started production in May 1997. The $34.7 million casting project will add another 51,000 square feet to the existing one million-square-foot facility. At full capacity, the facility will require 50 employees. Groundbreaking for the new plant is scheduled for late fall 2006, with operations beginning in the spring of 2008. The Decherd plant builds all engines for the complete line of Nissan and Infiniti vehicles manufactured in the United States. The plant currently employs approximately 1,400 workers. INDIANA Computer software developer Interactions Corp. has moved its corporate headquarters from New Jersey to Carmel, Ind., a fast-growing community just north of Indianapolis. Interactions develops call center technology that enables customers to talk to and receive service from an automated system just as if they were actually talking to a person. The move is expected to create 240 new jobs over the next three years. Interactions Founder and CEO Michael Cloran said he was drawn to Indiana’s business-friendly environment, a reasonable cost-of-living index and the proximity of universities. “Interactions Corporation is high-tech and fast-growing, exactly the kind of company we need to balance and diversify the Indiana economy,” Indiana Gov. Mitch Daniels said. “Here come some terrific jobs to keep more of our brightest young graduates at home.” The Indiana Economic Development Corporation offered incentives that included up to $215,000 in training grants and approximately $5.5 million in tax credits based on job creation and capital investment.
Business Briefs ASHLAND
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Copyright 1996-2006, by Kentucky Business Online. All rights reserved. Editorial content
is copyright 2006, Lane Communications Group The Lane Report is a trademark of Lane Communications Group. All other trademarks are the property of their respective owners. |
It was a double celebration in Hart County last month as T. Marzetti Company held a grand opening ceremony for its new 220,000-square-foot facility and also announced plans to build a new plant that will house one of the company’s subsidiaries, Sister Schubert’s Homemade Rolls, Inc.
Financial problems at Ford Motor Company have led to layoffs at Dana Corporation’s Elizabethtown plant, which produces frames for Ford’s F-150 pick-up truck, the Expedition SUV and the Lincoln Navigator SUV. 
With area code 270 projected to run out of available phone numbers in late 2007, the Kentucky Public Service Commission (PSC) has opened a proceeding to determine how to create a new area code in the western half of the state.
Five Kentucky companies are featured in the 2006 500 list of the nation’s fastest-growing private companies. Inc. magazine’s annual list is based on revenue growth over the previous three years. To be considered for the listing, companies must be privately held and have a least $600,000 in annual revenue. 
The Kentucky Department of Parks is investing some $1 million to promote Kentucky’s coal mining and heritage experiences in Harlan County. 
Brown-Forman Corporation has announced plans to buy Mexican tequila producer Grupo Industrial Herradura (also known as Casa Herradura) for $876 million. Under the terms of the agreement, Brown-Forman will acquire Herradura and El Jimador tequilas and the New Mix tequila-based ready-to-drink brand, as well as tequila production facilities and a sales and distribution organization in Mexico. Casa Herradura has approximately 1,100 employees and reported net sales of approximately $200 million for 2005. 
The Kentucky Public Service Commission (PSC) has granted East Kentucky Power Cooperative, Inc. (EKPC) permission to construct a coal-fired unit and five gas-fired units at its J.K. Smith Power Station in Clark County. 
Nissan’s operations in Decherd, Tenn., continue to grow, with the company officially launching its crankshaft forging production at the Decherd Powertrain Assembly Plant last month. 
The National Corvette Museum has unveiled its plans for a 50,000-square-foot expansion that will include a library and archives, a permanent Corvette Hall of Fame, a 75-seat Corvette Café, a 400-seat conference center, and a 5,000-square-foot education display/exhibit area. The Lexington firm of Sherman-Carter-Barnhart has been selected to design the $8 million project. 
Ashland Inc. has acquired full ownership of Hodogaya Ashland Co., Ltd. (HAC), a Japanese sales and marketing company in which it has had 50 percent ownership for more than 20 years. The remaining 50 percent was owned by Japan-based Hodogaya Chemical Company Ltd. Employees with HAC, which serves the metal castings industry, will be headquartered in Ashland’s new offices in Yokohama, Japan. 
UPS is constructing a new building south of Louisville as part of the company’s previously announced plans to expand its Worldport facility. The company plans to move approximately 940 employees from the existing Louisville ground hub to the new building, which will be located on 54 acres in Louisville’s Renaissance Zone, a 3,000-acre business park located south of the Louisville International Airport. The state, the city and the Louisville Regional Airport Authority created the Renaissance Zone in 2003 as a tax-increment financing district to fund infrastructure improvements to help spur the area’s industrial redevelopment. The Worldport expansion project is expected to be complete by November 2010 and will create nearly 1,300 full-time jobs and some 3,800 part-time positions. Details about the new Renaissance Zone facility have not yet been released. 
DuPont is investing $10 million at one of its Louisville plants as part of the company’s plan to increase production of a chemical used for solar panels. Company officials say that demand for its Tedlar brand of solar film – utilized in the construction and aerospace markets, among others – is increasing by more than 30 percent each year. Company officials said the increase in production is not expected to result in the addition of more jobs. The investment will have no effect on the company’s decision to shutter its Performance Elastamers plant in Louisville, which is scheduled to close in March 2007.
Cardinal Health Inc. has announced plans to close its distribution facility in Simpsonville by the end of the year. The Ohio-based company, which serves the health care industry with a broad range of products and services, recently acquired the pharmaceutical wholesale distribution business of The F. Dohmen Co. and is now in the process of consolidating its distribution facilities as a result of that acquisition. The shutdown of the Simpsonville center will result in the loss of 63 jobs.