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FAST LANE - August
2006
Over the past two years, members from the state’s Cabinet for Economic Development have been meeting with representatives from Kentucky companies already doing business in China to determine the needs and expectations for the new trade office. “China is currently Kentucky’s 10th-largest trading partner, receiving more than $400 million in exports during 2005,” said Gov. Ernie Fletcher. “Kentucky’s new trade office in Beijing will serve as a tremendous resource for Kentucky businesses wanting to tap into this country’s exploding marketplace.” Kentucky’s trade with China has grown significantly in recent years, increasing 528 percent from 2000 to 2005, compared to 55 percent overall growth in Kentucky exports for the same period. Major exports from Kentucky to China include chemicals, primary metal, machinery, waste and scrap, transportation equipment and electronic products. Kentucky’s overall export growth set a record in 2005 with $14.9 billion in exports. The United States Census Bureau recently released the April 2006 year-to-date export data by state, which ranked Kentucky ninth highest on a per capita basis with $1,291 of exports per person for the first four months of 2006. Kentucky had the highest exports per capita in its competitor state region for the first four months of 2006. The Cabinet has contracted with Larkin International Trade Associates of Arlington, Va., to operate the new center, which will be located in the Chaoyang District of Beijing, close to the new U. S. Embassy Complex. RICHMOND
EKU will begin offering the program this fall and anticipates enrolling some 200 students within the next seven years. Kim Kincer, a member of the Ladies Professional Golfers Association who guided Eastern through the PGA accreditation process, will direct the program. STATE In a move that made national news headlines, Gov. Ernie Fletcher signed an executive order last month prohibiting smoking in state government offices and commons areas, effective Aug. 1. The executive order affects all buildings solely occupied by executive branch cabinets of the state government, as well as the state lab, state parks and local offices such as Social Services, Workforce Development and Revenue. The ban also applies to all state correctional facilities, with the exception of Eddyville, Kentucky’s only maximum-security prison. Offices occupied by the legislative and judicial branches of the state government are exempt from the ban. Prior to the order, the state was required to provide access to indoor smoking facilities in office buildings occupied by executive branch employees. Those spaces are now being converted to offices or storage space and state employees will be required to smoke only in designated outdoor smoking areas. STATE
The new plans will be called Anthem Individual Dental Blue and Blue Preferred Term Life. The introduction of both options represents the first time the companies have offered dental and life insurance options to individuals. Anthem officials said the growing evidence of a strong correlation between oral health and overall health led to their decision to begin offering individual dental coverage. The monthly premium for Dental Blue is $21 for adults and $14 for children in Kentucky. The program provides 100 percent coverage for diagnostic and preventive care such as teeth cleanings, x-rays and oral exams and a set amount for basic and major dental services for providers within the company’s network. Anthem’s Blue Preferred Term Life will offer term life policies of $15,000, $25,000 and $50,000, with monthly premiums beginning at $3 per month. STATE
The Leadership Initiatives program will concentrate in three areas: student assessments, workforce competitiveness and KCTCS 2.0, an effort to create a comprehensive virtual learning initiative. McCall said KCTCS will create a workforce competitiveness initiative by engaging in a dialogue with CEOs and business leaders throughout the state to connect the KCTCS mission with Kentucky’s economic future. “We will be identifying business leaders throughout the state who can champion the role of KCTCS in making Kentucky competitive in the global economy,” McCall said. “We will strive to identify more ways that KCTCS can serve the education and training needs of Kentucky’s leading business, while building a coalition of top business leaders who can serve as advocates for our needs with local, state and federal policymakers.” LEXINGTON
Exstream is a Lexington-based company that develops, sells and supports enterprise document creation software for companies such as Merrill Lynch, AT&T, Fidelity Investments, Aflac, FedEx, Allstate, Humana, and Carnival Cruise Lines. The privately held company expects to move 150 employees to the new three-story facility next year and hopes to add another 100 employees to its workforce within the next several years, according to Exstream President and CEO Davis Marksbury. “Not only will they add to the technology base that is growing at our research campus,” said Coldstream Director and UK Associate Vice President for Research and Economic Development John Parks, “[but] companies like Exstream will help attract other high-tech partners.” “This is another of those fascinating success stories of a ‘home-grown’ entrepreneurial company that’s having worldwide impact,” said Commerce Lexington Inc. President and CEO Bob Quick. “Businesses like Exstream Software energize the local knowledge-based economy by offering exciting, high-paying jobs and often fostering other high-tech spin-offs.” Coldstream is currently home to 35 tenants with 815 employees. Corporate tenants include IBM, IDEXX Veterinary Services and Lexel Imaging Systems. UK research centers at Coldstream include the Livestock Disease Diagnostic Center, the Center for Aluminum Technology, the Interdisciplinary Human Development Institute, and the College of Pharmacy’s Center for Pharmaceutical Science and Technology. LOUISVILLE Lighting manufacturer Genlyte Group has reached an agreement to acquire the U.S. and Hong Kong-based operations of Strand Lighting, a manufacturer of entertainment lighting and lighting systems. The acquisition will also include certain assets of Strand Lighting Ltd. of UK. The transaction purchase price includes a cash price of $8.5 million plus the assumption of approximately $5 million in debt. The Strand business segments included in the transaction reported 2005 sales of approximately $31 million. According to Genlyte President and CEO Larry Powers, the acquisition of Strand will complement the company’s current product offers and will also broaden Genlyte’s presence in the Asian theatrical and entertainment lighting markets. Genlyte plans to operate Strand as a stand-alone business. Approximately 80 Strand U.S. employees located in Los Angeles and 22 employees in Hong Kong will join the Genlyte organization but will not be relocated. JESSAMINE COUNTY The Kentucky Cabinet for Health and Family Services has approved certificate of need (CON) applications for two ambulatory care centers in Jessamine County. Saint Joseph HealthCare’s proposed facility will provide 24-hour emergency services, diagnostic imaging, lab services, non-invasive testing services, a pharmacy, health education, and physician offices. The new facility is expected to open by 2008. Associated Healthcare Systems, the parent company of Samaritan Hospital in Lexington, plans to build a 16,100-square-foot facility that will include medical and diagnostic services, emergency services, preventive and educational services, a laboratory and chronic illness management services. Associated hopes to have its facility open by mid-2007. While civic leaders were pleased with the news, some said that the demands of a rapidly growing community such as Jessamine call for a full-service hospital. Jessamine currently has a population of more than 39,000. Based on growth projections, Jessamine’s population is expected to hit 70,000 by 2030. Jessamine is the only county bordering Lexington-Fayette County that does not have it’s own full-service hospital. State officials say they aren’t oblivious to the need, it’s just that there are separate deadlines for ambulatory care facilities and hospitals: The decision for hospital CONs will be made next February. Associated has already submitted its CON application for a hospital in Jessamine and Saint Joseph plans to do so as well. Officials with Saint Joseph said their 98,590-square-foot ambulatory facility will be built to hospital standards and code so that in-patient hospital beds can be added in the future if the hospital CON application is approved. LOUISVILLE
Humana Medicare members will soon be able to purchase a brain fitness program that focuses on sharpening memories, improving attention spans and enhancing communication processes. The program will be marketed under both the Humana and Posit Science name and will consist of a series of computer exercises. Posit Science bases its programs on the principles of “neuroplasticity” – a growing body of knowledge that demonstrates the human brain’s ability to adapt and physically change. “In a series of controlled, blinded studies, involving hundreds of participants aged 60-97, we have consistently seen strong results,” said Dr. Henry Mahncke, vice president of research at Posit Science. STATE The commonwealth ended its fiscal year 2006 with a general fund surplus of $136.5 million. Of that, $112.5 million has been directed to the Budget Reserve Trust Fund, generally known as the “rainy day fund.” The remaining $24 million has been divided into equal shares and transferred to the Kentucky Employees Retirement System and the Kentucky Teachers’ Retirement System Medical Insurance Fund. “This surplus – our third consecutive surplus – is the result of deliberate, tough fiscal management and of a strong economy,” Gov. Ernie Fletcher said. “Maintaining a strong budget reserve allows us to continue improving our bond rating while at the same time putting money aside for possible emergencies. Adding funds to our retirement systems will help our state fulfill long-standing commitments to public employees and give comfort, stability and assurance to retired teachers and public servants. Strong fiscal responsibility is crucial in our efforts to move Kentucky forward, and today’s announcement is another indication of how we are doing just that.” The transfer of $112.5 million to the rainy day fund brings the amount to $231.5 million or 2.8 percent of projected FY07 General Fund revenue. The commonwealth’s target for the fund is 5 percent of general fund revenue. STATE
To qualify for the incentive grant, Kentucky had to exceed its agreed-upon performance levels of the Adult Education and Family Literacy Act, WIA Title I, and the Carl D. Perkins Vocational and Technical Education Act. “Adult education plays a critical role in our collective efforts to raise educational attainment to the national average and increase Kentucky’s economic competitiveness,” said Tom Layzell, president of the Council on Postsecondary Education. “Due to the work of many agencies, more Kentuckians than ever before are participating in programs that will improve their quality of life and energize Kentucky’s economy.” The number of adults participating in adult education in Kentucky increased from 109,880 in 2003 to 120,051 in 2004, far exceeding the 2004 goal of 100,000. In 2005, participation increased again to 124,801. Kentucky is also making strides in increasing the number of adults who earn a GED. In 2003, Kentucky ranked 24th in the United States in the percentage of non-high school completers earning a GED. The number of GED graduates has continued to increase since 2003, totaling 9,740 in 2004 and 9,757 in 2005. STATE Across-the-board growth of Goodwill Industries of Kentucky has resulted in President and CEO Roland Blahnik being selected by Goodwill Industries International to receive the organization’s 2006 Kenneth K. King Management Award. At the time Blahnik assumed leadership of Goodwill Industries of Kentucky 20 years ago, the organization had only two retail stores and 23 employees. Today, Goodwill has 800 employees and 48 retail centers in Kentucky. Goodwill’s focus is on providing jobs, training and counseling for people with disabilities or other disadvantages, including welfare recipients and low-wage workers. The organization’s retail centers serve to provide employment and training for such individuals. Other programs operated by Goodwill include job placement services, skills evaluations, an adult education center, and employment for people with disabilities or disadvantages. Since 2001 alone, Goodwill of Kentucky has experienced a 58 percent growth in job placements and, in 2005, it placed more than 650 people in competitive jobs within the community. STATE
The ESPN Citgo Bassmaster Elite Series Tournament, hosted on Lake Barkley and Kentucky Lake, brought some $600,000 to the Western Kentucky region, while the Dew Action Sports Tour’s Panasonic Open generated $2.8 million in economic impact in the Louisville area. The event drew 41,000 fans and was broadcast live on both NBC and the USA network. “This is exactly the kind of impact that Gov. Fletcher envisioned when he created the Sports Authority last year,” Tourism Commissioner Randy Fiveash said. “Millions of people watched these events take place in Kentucky, with many hearing about what our state has to offer for the first time ever.”
INDIANA Honda Motor Co. has selected a 1,700-acre site near Greensburg, Ind., for its newest North American plant. Greensburg is located approximately 50 miles southeast of Indianapolis. The new Indiana plant – Honda’s sixth auto plant and 14th major plant overall in North America – will help boost the company’s total North American auto production capacity from 1.4 million units to more than 1.6 million units. Like Honda’s other U.S. and Canadian facilities, the Indiana plant will utilize the company’s New Manufacturing System, which features advanced technologies that allow for the flexibility to product different models of automobiles more quickly and efficiently. Koichi Kondo, president of American Honda Motor Co., said Indiana’s central location was a significant factor in the company’s decision to locate its new plant there. Honda first announced its plan to build a new auto plant in May as part of its announcement for the advancement of the company’s “2010 Vision” for North American automobile operations. In addition to the new auto plant in Indiana, Honda’s North American plan also includes the construction of a new engine plant in Canada that will product four-cylinder engines; expansion of its U.S. engine, transmission and power train component production in Ohio and Georgia; and introduction of a new, more affordable, dedicated hybrid car in 2009. OHIO E.W. Scripps Company has sold the majority of the assets of its Shop At Home television network to Jewelry Television for $17 million. The purchase price includes Shop At Home’s building and real estate, satellite uplink facilities, information technology systems, the network’s call center, Web site and production studios. Jewelry Television intends to assume a number of agreements that Shop At Home has with broadcast television stations and operators of cable and satellite television systems to carry the network’s programming. Jewelry Television plans to continue scaled down operations of Shop At Home and will retain a number of network employees. Cincinnati-based Scripps owns a diverse range of media enterprises, including national cable networks such as HGTV, Food Network and Great American Country; daily and community newspapers in 18 markets; 10 broadcast TV stations; United Media, a worldwide licensing and syndication company that handles some 150 features and comics; and online search and comparison shopping services, Shopzilla and uSwitch. Jewelry Television, headquartered in Knoxville, Tenn., reaches some 80 million households via its broadcast, cable and satellite programming.
Business Briefs BOWLING GREEN
HENDERSON
HIGHLAND HEIGHTS
LEXINGTON
LOUISVILLE
MIDWAY
NEWPORT
STANFORD
STATE
INDIANA
OHIO
TENNESSEE
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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. |
Kentucky has opened its newest trade office in Beijing, China to help businesses market Kentucky products and services in the growing Chinese marketplace. The center will also promote investment in Kentucky by Chinese businesses. 
Eastern Kentucky University has established the state’s first PGA/Professional Golf Management Program. The program becomes one of only 18 such PGA-accredited programs in the nation designed to prepare graduates for a variety of administrative careers within the golf industry.
Students will graduate with a major in marketing with a professional golf management option. Along with all university requirements, students in the program must also complete all PGA education curriculum requirements, including the PGA playing ability test and 16 months of cooperative education experience. Students having satisfied all requirements upon graduation may apply for PGA membership.
Anthem Blue Cross and Blue Shield is now offering individual dental plans and individual term life insurance in Kentucky, Ohio and Indiana. 
Kentucky Community and Technical College System President Michael McCall has presented a plan to the KCTCS board of regents for a new initiative to better ensure that students are prepared to compete in the workforce. 
Exstream Software Inc. has announced plans to build a new facility for its world headquarter operations at the University of Kentucky’s Coldstream Research Campus.
Humana Inc. has partnered with San Francisco-based Posit Science Corporation on a new brain fitness program designed to keep people mentally sharp and alert as they age. 
Kentucky is one of 23 states to receive a grant from the U.S. Department of Education and Labor for surpassing adult education and workforce performance levels in FY2004. Kentucky will receive a $716,581 incentive grant as a part of the Workforce Investment Act. 
A recent economic impact study reveals that efforts to bring national sporting events to Kentucky is paying off: In June alone, sports events generated more than $3.4 million in economic impact for the state.
The company is investing $550 million in the plant, which is expected to begin mass production of the company’s four-cylinder vehicles in the fall of 2008. Honda expects to begin operations with 2,000 employees.
Nearly a third of the workers at the General Motors plant in Bowling Green have decided to accept the company’s employee buyout/early retirement offer. The plan, put forward by the financially-beleaguered company in an effort to cut costs, has resulted in some 35,000 hourly GM employees participating in what the company is calling its “accelerated attrition program.” In Bowling Green, 304 of the plant’s 1,075 employees will accept buyouts. As a result of the higher-than-expected numbers, GM expects to reach its target of reducing 30,000 manufacturing jobs by Jan. 1, 2007, about two years ahead of the previously announced schedule. 
UPS has been awarded a three-year contract with the United States Postal Service to provide domestic air transportation of U.S. mail to and from 98 cities. The contract, which includes an option for a two-year extension, primarily involves first class and priority mail and extends an existing contract between UPS and the USPS under which the company provides airlift for mail transportation between 16 cities. UPS Airlines is based at the Louisville International Airport. 
International Paper, which last month moved its headquarters from Stamford, Conn., to Memphis, has signed a definitive agreement to sell its kraft papers business to Stone Arcade Acquisition Corp. for $155 million in cash. The sale is part of IP’s previously announced plan to focus on uncoated papers and packaging. IP’s Kraft Papers unit is headquartered in Memphis and has manufacturing facilities in Arkansas and North Carolina. The facilities employ a total of 700 people – most of whom will be absorbed by the new company - and generated some $220 million in sales in 2005. After the closing, which is expected in the third quarter, the business will be called KapStone Kraft Paper Corporation.