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FAST LANE - February
2004
Kentucky had high hopes that USEC Inc., the world’s leading supplier of enriched uranium fuel for commercial nuclear power plants, would choose to build the facility in Paducah, where the company currently operates a uranium enrichment plant. However, USEC officials said that “the Ohio proposal offered the right mix of economic benefits, existing infrastructure, assurances concerning seismic conditions and schedule advantages,” drawing the decision in favor of the Piketon facility. Kentucky Economic Development Secretary Gene Strong noted that although the Commonwealth put forth a “very strong, competitive” package, Ohio already had an existing building that would cost $300 million to duplicate in Paducah. (Paducah’s location near an earthquake fault results in higher-than-average construction costs.) “We were fortunate to have had the option of two first-class sites and workforces in Piketon and Paducah,” said USEC President and CEO William H. Timbers. “While the Piketon site provides us with the best opportunity to bring the American Centrifuge plant online quickly and efficiently, we will continue to rely on the Paducah plant as a vital production source.” The Paducah plant, which employs 1,350 workers, will continue to operate until 2010. The news was not all bad for Kentucky, however. With Piketon being located in Southeastern Ohio, many Kentuckians already work for USEC. With the need for more workers in Piketon – the new facility is expected to employ up to 500 people – it’s likely that Kentuckians will be among those hired to fill the new jobs. NORTHERN KENTUCKY
In fact, economic experts are predicting that the pace of Northern Kentucky’s economic growth to be greater than the national rate as well as the fastest the region has experienced since 1999. The growth rate expected for Northern Kentucky in 2004 is around 6.8 percent, compared to a 4.4 percent rate expected for the nation. Non-farm employment is projected to rise two percent, with personal income growth predicted to be around six percent. The anticipated recovery of the air transportation industry is expected to play a major role in the economic growth of the area. The Cincinnati/ Northern Kentucky International Airport has developed into a major hub in terms of both passengers and cargo. LEXINGTON ACS, a provider of business process outsourcing (BPO) and information technology solutions, has announced an expansion plan that will add 500 new jobs in Lexington. ACS is a Fortune 500 company with more than 40,000 employees in 100 countries. The company currently employs approximately 1,750 employees in Kentucky. In addition to its four sites in Lexington – which include areas such as data entry, scanning, business development and information technology – ACS also has operations in Beattyville, Liberty, London, Louisville, Monticello, and Richmond. Approximately half of the new Lexington positions will support a new customer care call center that will provide a range of inbound customer care services.The remaining 250 positions will provide various BPO services at ACS facilities in Lexington. As of mid-January, the company had already hired 100 people for the new positions and plans to fill the remaining 400 jobs by mid-year. WEST LIBERTY
The building also houses the Morgan County Public Library – which offers high-speed access to the University of Kentucky Library database – and the West Liberty Innovation Commercialization Center. The Innovation Commercialization Center – a partnership between UK, the Kentucky Office of the New Economy, Eastern Kentucky University and Morehead State University – is one of 16 rural innovation centers planned throughout the state. In addition to classrooms designed for education and training, the facility features a Small Business and Enterprise Pavilion wing that provide office-pod areas to house and provide support services to new small-business development. Another attractive feature of the complex is an adjacent 30,000-square-foot light industrial complex. The complex is currently vacant and could be immediately operational for a light industrial function or retrofitted to meet the specific requirements of a new tenant. (Specifications can be viewed at www.thinkkentucky.com/edis/ bldg/bldgsindex.htm.) VANCEBURG
The Minnesota-based company, a leading manufacturer of wood, veneer and thermofoil components, first established operations in Vanceburg in 2001 and now employs a staff of 60 workers. The company also operates a plant in Corbin. The new operation will use the veneered panels produced by the original Vanceburg plant along with other materials to manufacture components for the housing industry. The addition of a new facility will create up to 40 new jobs, according to Northern Contours President Mike Rone. Future expansion is also a possibility and could increase the workforce to as many as 60. That news comes as music to the ears of the Vanceburg community, which lost 250 jobs with the shutdown of the Nine West factory in 1999. LEXINGTON
Neogen’s Lexington division is responsible for a line of immunoassay diagnostic kits for detection of drug residues, toxins, bacteria and biologically-active substances for the animal sport and pharmacologic markets. The Lexington division is also home to Neogen’s extensive line of over-the-counter products for the equine health market. In October, Forbes Magazine named Neogen to its annual list of the “200 Best Small Companies in America” for the third time. For Fiscal Year 2003, the company posted record numbers in terms of both revenues and earnings. Revenues increased 13 percent to $46.5 million while net income was up 21 percent over the previous year. The company purchased Hess & Clark in November, paying $12 million for that business as well as Hacco, Inc., another ConAgra subsidiary. LEXINGTON Bluegrass Family Health has announced a new strategic relationship with Wells Fargo Institutional Trust Services to provide a new cost-effective consumer choice health plan to employer groups. The Bluegrass Consumer Choice product, which will be available April 1, has a higher-deductible Preferred Provider Organization plan covering major medical expenses with an employer-funded Health Reimbursement Arrangement (HRA) fund. Benefits in the HRA are tax-free and cumulative and can be set up to allow unused funds to roll forward into subsequent years. Wells Fargo has been contracted to administer the employer-funded HRA used by employees to pay eligible medical expenses. “It’s a win-win product that gives consumers more discretion over their healthcare expenses while at the same time lowering costs for employers and employees,” noted Garry Ramsey, Bluegrass Family Health’s chief marketing officer. “Cost savings is just one positive aspect of consumer-driven health plans,” said Lynden Kendrick, vice president of Wells Fargo Institutional Trust Services. “Because Bluegrass Consumer Choice participants will make decisions with their HRA funds, employees have an incentive to be conservative with their healthcare spending.” STATE
“We believe this new option will help address growing concerns about the affordability and accessibility of coverage in this difficult line of insurance,” said Glenn Jennings, Kentucky’s acting insurance commissioner. “We are optimistic that this addition to the market will provide some needed relief to physicians.” HUGKY’s licensure comes at a time when many Kentucky doctors are struggling to find stable and affordable medical liability insurance. “HUGKY was modeled after the nation’s most successful doctor-owned companies,” explained Dr. Art McLaughlin, a Louisville radiologist who is chairman of the board for HUGKY. “We made sure the company’s sole product line was medical professional liability insurance, and that our risk pool includes only Kentucky doctors.” McLaughlin is one of five initial physician board members. Other board members are Dr. Greg D’Angelo (Lexington), Dr. James Evans (Ft. Thomas), Dr. Robert Knight (Owensboro), and Dr. Linda Lear (Nicholasville). Additional physician board members are expected to be added during 2004. SHEPHERDSVILLE SnowBear Limited, a Canadian company that manufactures snowplows and utility trailers, has selected a site in Shepherdsville for its first U.S. facility. The company is purchasing a 103,000-square-foot building on Ky. 44 – formerly occupied by Zinic, Inc., a local company that builds conveyor systems – for approximately $3.5 million and plans to hire around 200 employees, with an average wage of $12.30 per hour. The new facility is expected to be operational by spring. Contrary to the dismal economic news elsewhere in the past year, Bullitt County’s economic development efforts have been met with resounding success. In the last six months, the county has landed three new distribution centers in addition to the SnowBear plant, creating a total of 625 new jobs. CENTRAL KENTUCKY
The good news is that Delta is increasing its service between Lexington’s Blue Grass Airport and its Dallas and Atlanta hubs. Unfortunately, however, the increase comes at the expense of Delta’s Louisville market, which is losing nonstop flight service between Louisville and Dallas altogether. Passengers flying out of Louisville to Dallas will now be required to connect in either Cincinnati or Atlanta. The additional nonstop flight between Lexington and Dallas – which gives the market three daily roundtrip flights – has already begun. The additional service between Lexington and Atlanta, which begins March 1, brings Delta’s total number of daily roundtrip flights in the market to eight. The additional flights represent an eight percent increase in the total number of daily seats offered by Delta from Lexington, the latest in a string of impressive statistics racked up by Blue Grass Airport. The airport has experienced unprecedented growth in recent years, resulting in the addition of six new destinations by four different airlines, a 30 percent increase in daily flights and an overall decrease in average fares of 22 percent since 2000. The airport served more than 1.1 million passengers in 2003, making it one of the fastest-growing airports in the nation. “In 2003, passenger activity at Lexington’s Blue Grass Airport has increased by over 20 percent. We are thrilled Delta has responded to these favorable numbers by adding new flights to Atlanta and Dallas ,” said Michael Gobb, executive director of Blue Grass Airport. LOUISVILLE Providian Financial Corp. has closed its Louisville collection center as part of the company’s decision to consolidate its operations with that of its other collection facilities in Austin and El Paso, Texas. The closing eliminates the company’s last presence in Louisville, which served as Providian’s headquarters until 1997, when it became a publicly held company. The company is now headquartered in San Francisco and has become one of the nation’s leading providers of credit cards. Closing the Louisville collection center will leave 315 workers without jobs. At its peak in Louisville, the company employed as many as 900 people. LOUISVILLE
With approximately 190,000 members, Ochsner is one of the largest health benefits plans in the New Orleans market and is the third largest in the state of Louisiana. The acquisition – for which terms were not disclosed – will significantly enhance Humana’s presence in the South, an area that is growing both in population and commercial activity. In addition to creating a new Humana market in New Orleans, the Ochsner acquisition is expected to facilitate sales opportunities in Humana’s existing Houston market. The acquisition is also expected to make Humana more attractive to national accounts. The transaction, which is subject to regulatory approval, is expected to close in the second quarter of the year. SCOTTSVILLE Sumitomo Electric Wiring Systems has announced that it is closing its cable reel plant in Scottsville. The company plans to convert the Scottsville facility into a warehouse, but the shutdown of the manufacturing operations will result in the loss of 160 jobs. Sumitomo officials say the cable reel business has simply not been profitable for company for the past several years. However, the company will continue to operate its stamping and injection molding plant in Scottsville, which employs a staff of 280. Sumitomo also operates an electronic control component plant in Edmonton as well as two facilities in Bowling Green, the company’s headquarters. In 2001, Sumitomo moved its Kentucky wiring harness operations to Mexico in order to reduce labor costs, resulting in the loss of 900 jobs. MT. STERLING
The expansion will result in the addition of 300 new jobs to the existing 950-member staff. The plant, which formerly operated under the Chef America name, produces Hot Pockets, Pizza Minis and other microwavable convenience food items. LOUISVILLE Louisville-based Sypris Solutions, Inc., a diversified provider of technology-based outsourced services and specialty products, has signed a letter of intent with ArvinMeritor, Inc. to serve as a key supplier for the manufacture of trailer axle beams and a variety of drive train components for ArvinMeritor. Under the proposed agreement, Sypris will acquire ArvinMeritor’s Kenton, Ohio plant, which specializes in the manufacture of trailer axle beams. The operation currently employs approximately 190 people. PADUCAH Coca-Cola Bottling Co. has announced plans to merge its Hopkinsville shipping operations and its Paducah bottling plant into one facility in a Paducah industrial park. The combined operations will serve as a regional distribution center. Plans to merge the two entities have been in the works for some time; in fact, a site in Calvert City had already been decided upon. However, determined to keep the soft drink giant in Paducah, city and county officials put together a $280,000 incentive package to entice Coca-Cola to stay. And it worked. The company will occupy a 56,000-square-foot spec building set on 10 acres in the Industrial West Park, a 200-acre industrial park being developed by the Paducah-McCracken County Industrial Development Authority. Coca-Cola will be the first tenant in the park. Coca-Cola currently employs around 80 workers at its downtown Paducah facility and about 40 at its Hopkinsville plant. Hopkinsville workers will be given the opportunity to transfer to Paducah. OHIO
The NARCh event, which is the largest tournament of its kind, is expected to bring in some 300 teams from across the U.S. and North America. Teams range from Atom and Mite divisions (ages 4 and up) to 35 and older, and include women’s, junior and college divisions and an open pro division. Last year’s NARCh tournament, held in Lee County, Florida, had a total economic impact of nearly $10 million with more than 9,500 total room nights generated. The NARCh announcement comes on the heels of the Sports Corporation’s successful bid for the 2006 United States Specialty Sports Association Festival of Sports (USSSA). The USSSA event is a combination of World Series, National Championships and National Qualifying events. Competing sports include baseball, basketball, fast-pitch softball, slow-pitch softball, basketball, soccer and volleyball. That event is expected to bring up to 8,000 athletes to the Greater Cincinnati and Warren County area, with an estimated $10 million in economic impact. TENNESSEE Kentucky businesses located near the Kentucky-Tennessee state line have long benefited from sales to Tennesseans who made regular trips to buy lottery tickets. Since last year, however, when Tennessee voters approved a measure to do away with the state’s ban on lotteries, those businesses have been bracing for the loss of income that was sure to result once those customers could get their lottery fix closer to home. And as of January 20, Tennesseans embraced their new lottery wholeheartedly: Tennessee Lottery President and CEO Rebecca Paul reported that Tennessee’s first-day sales were $10.8 million – an industry record of roughly $1.87 per capita. Those results make Tennessee’s startup one of the strongest in U.S. lottery history. Like many states, Tennessee’s lottery profits are slated to go to education programs. The lottery program has been charged with raising at least $88 million by July 1 in order to fund scholarships for an estimated 65,000 students expected to attend Tennessee colleges and universities in the fall.
Business Briefs BARBOURVILLE
BOWLING GREEN
DANVILLE
EASTERN KENTUCKY
ELIZABETHTOWN
FORT MITCHELL
FRANKFORT
FRANKLIN
GREENSBURG
HEBRON
HIGHLAND HEIGHTS
JACKSON
LEXINGTON
LOUISVILLE
MADISONVILLE
NORTHERN KENTUCKY
OWENSBORO
PIKE COUNTY
PRESTONSBURG
SOMERSET
WILDER
STATE
INDIANA
OHIO
TENNESSEE
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Copyright 1996-2004, by Kentucky Business Online. All rights reserved. Editorial content
is copyright 2004, Lane Communications Group The Lane Report is a trademark of Lane Communications Group. All other trademarks are the property of their respective owners. |
Despite offering one of the strongest economic incentives packages in the state’s history, Kentucky has lost its bid for a $1.5 billion uranium enrichment plant with the announcement by USEC Inc. that it will build its state-of-the-art American Centrifuge facility in Piketon, Ohio.
All signs are pointing toward a strong year of economic growth for the Northern Kentucky region, according to the 2004 forecast from the Northern Kentucky Chamber of Commerce.
The University of Kentucky has opened a new $6.6 million facility in West Liberty that will serve as a catalyst and hub for technology instruction, training and skill-building for individuals in and around the Morgan County area. Equipped with state-of-the-art computers and technology, the 46,000-square-foot Morgan County Regional Technology Center will provide the technology necessary to help develop and nurture high-tech businesses in the region.
Northern Contours has signed a lease agreement for the former Nine West factory with plans to expand its Vanceburg operations.
Neogen Corp. is expanding its Lexington operations and adding approximately 70 new jobs as a result of its recent acquisition of Hess & Clark, a subsidiary of ConAgra that produces disintectants for farms and food-processing facilities. Michigan-based Neogen develops and markets products dedicated to food and animal safety.
Healthcare Underwriters Group of Kentucky (HUGKY), a medical professional liability insurance company owned by Kentucky doctors, has received authorization from the Kentucky Department of Insurance to begin operations.
“We’ve been working toward this day for over a year,” said Steven L. Salman, HUGKY’s CEO. “It’s very exciting to see doctors seize control of their future and work toward a permanent stabilization of Kentucky’s medical liability insurance market.”
Delta Air Lines’ recent announcement regarding changes in its flight service is the proverbial good news/bad news scenario for Kentucky markets.
Humana Insurance Company, a subsidiary of Humana Inc., has reached a definitive agreement to acquire all outstanding common stock shares of Ochsner Health Plan.
Nestle has announced plans for a 43,000-square-foot addition to its existing facility in Mt. Sterling’s Woodlands Industrial Park.
The outsourcing arrangement is expected to begin in phases over the next several years and is forecast to cover an estimated $75 million of business per year when completed. The proposed deal includes the extension of an existing contract between the parties through 2009.
The Greater Cincinnati Sports Corporation and the Greater Cincinnati Convention and Visitors Bureau have landed the 2004 North American Roller Hockey Championship, to be held July 16-31 in Evendale. 
The Barbourville TruSeal Technologies plant will become part of Quanex Corporation as a result of Quanex’s purchase of TruSeal from Kirtland Capital Partners for $113 million in cash. TruSeal manufactures and markets flexible insulating glass spacer systems and sealants for vinyl, aluminum and wood windows. Company officials say there are no plans to move or close the Barbourville plant. The business will become part of Quanex’s building products segment. 
American Electric Power (AEP) is donating $150,000 to the Kentucky Community and Technical College System (KCTCS) and three of its colleges to support math and science education in Eastern Kentucky. The financial commitment, spread over three years, will establish the AEP Endowment for Math & Science Excellence, which will benefit middle school and high school students in the areas served by Ashland Community and Technical College, Big Sandy Community and Technical College, and Hazard Community and Technical College.
Dana Corp. has expanded its Elizabethtown workforce by nearly 300 over the past year in order to meet product demand. The plant is the sole producer of frames for the new model of Ford’s F-150 pick-up truck, which ranks as the best-selling vehicle in the world. The Elizabethtown plant also produces frames for the Ford Expedition and the Lincoln Navigator. The new jobs bring the Elizabethtown facility’s total employee count to 1,190. 
Toyo Automotive Parts (USA) has begun work on a 60,000-square-foot expansion of its Simpson County plant that is expected to add up to 30 new jobs. The expansion will provide more than 200,000 square feet of manufacturing and warehouse space for the company, which produces rubber anti-vibration parts for the automotive industry. 
Comair has announced plans to initiate nonstop jet service between the Cincinnati/Northern Kentucky International Airport and Springfield/Branson, Missouri. The service is slated to begin April 15 with three daily trips utilizing the Bombardier CRJ regional jet. 
In addition to enhancing Pomeroy’s portfolio of service offerings, the acquisition will provide the company with the opportunity to expand its geographic reach in the Midwest, noted Pomeroy President Steve Pomeroy. Pomeroy Companies currently employs approximately 1,500 people in 26 regional facilities and reported revenues of $703 million for the year ended January 5, 2003. 
National City Corp. is closing its Louisville Commercial Loan Operations division and will transfer its loan processing operation to National City facilities in Michigan, Pennsylvania and Indiana. The exact number of jobs affected has not been disclosed, although company officials say the number is small. 
ICI Paints has closed its Devoe Paint research and design facility in Louisville and is moving those operations to the company’s Cleveland R&D center. Company officials say the decision was made in an effort to streamline operations. The move brings an end to Devoe’s presence in Louisville, where it operated for 136 years. 
In addition to serving as home to General Electric’s Consumer Products division, Louisville will now become headquarters for portions of the company’s Industrial Systems division as well, creating the Consumer and Industrial Products division. The move is part of General Electric’s plans to restructure and consolidate some company operations. Although the overall employment numbers in Louisville are not expected to increase significantly, a small number of GE executives will be relocated to Louisville. 
Eli Lilly and Company, the Indianapolis-based pharmaceutical giant, has been granted approval by the U.S. Food and Drug Administration for a medication to treat the depressive episodes associated with bipolar disorder. Symbyax is the first FDA-approved medication for bipolar disorder, which is a notoriously difficult-to-treat condition that afflicts millions of Americans. 
The Sun Coke Company, a subsidiary of Sunoco, Inc., has begun construction of a new $140 million heat recovery coke manufacturing plant in Haverhill, Ohio. The project is expected to require hundreds of construction jobs and approximately 65 permanent jobs upon completion.