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FAST LANE - September
2006
Pennsylvania-based AmerisourceBergen is one of the world’s largest pharmaceutical services companies serving the United States and Canada. The company employs more than 13,000 people and offers services ranging from pharmacy automation and pharmaceutical packaging to pharmacy services for skilled nursing and assisted living facilities, reimbursement and pharmaceutical consulting services, and physician education. Kindred employs 56,000 people and operates long-term acute care hospitals, skilled nursing centers, institutional pharmacies and a contract rehabilitation services business. Combining Kindred Pharmacy Services and PharMerica Long-Term Care will create a company that will be the second largest in the institutional pharmacy services market. (Covington-based Omnicare is the current leader in the industry, controlling approximately half of the market.) Based on the six months ending June 30, 2006, the annualized revenues for the new company would be approximately $1.9 billion and would encompass 33,000 licensed beds in 41 states. Kindred President and CEO Paul J. Diaz said the move to combine the two companies will create a company that is able to compete more effectively in the marketplace, while enabling Kindred to focus its resources and capital on its hospital, nursing center and contract rehabilitation businesses. The city of Louisville is already assembling an incentive package in hopes of securing the new company’s headquarters facility – and the hundreds of well-paid corporate jobs that will be part of that package. Spokespeople with both Kindred and PharMerica said the new headquarters will most likely be in either Louisville or Tampa (headquarters for PharMerica) but didn’t rule out the possibility of another city. LOUISVILLE Marathon Oil Corporation has announced plans to add storage and distribution of biodiesel fuel at the company’s Louisville fuel terminal facility. The 30,000-gallon storage facility will be the first of its kind in Kentucky and Marathon’s second biodiesel fuel location, according to Marathon executive vice president Gary Heminger. “Infrastructure development is a top priority for the biodiesel industry,” said Tom Verry, director of outreach and development for the National Biodiesel Board. “When terminals like this one offer biodiesel to distributors, it helps biodiesel become part of the mainstream.” The Kentucky Soybean Board, the Kentucky Transportation Cabinet, and National Clean Cities, Inc. all provided funding toward the project, which will cost approximately $500,000. Biodiesel storage and distribution at the terminal is expected to be operational in the first quarter of 2007. Marathon is the fifth-largest refiner in the U.S. with 974,000 barrels-per-day of crude processing capacity in its seven-refinery system. The company’s retail marketing system comprises approximately 5,600 locations in 17 states. LOUISVILLE Ford Motor Company’s two Kentucky plants are among 10 facilities that will be idled later this year as the company struggles to bring its vehicle production in line with declining sales. According to Ford, the Louisville Assembly Plant, which produces the Ford Explorer and Mercury Mountaineer SUVs, will close for six weeks. The Kentucky Truck Plant, which produces the company’s F-Series pickup trucks, will close for five weeks. The revised production plan is expected to sharply reduce the supply of several models and reduce pressure on sales incentives and dealer inventory carrying costs. The plan also reflects expectations for lower industry sales of light trucks and truck-based sport utility vehicles, as high gasoline prices are expected to continue to encourage demand for more fuel-efficient passenger cars and crossovers. Ford’s plan will reduce its North American fourth-quarter production by 21 percent – or 168,000 units – compared to the same quarter last year. “We are basing our business plans on the customer, and we are determined to match production and inventories with consumer demand,” said Mark Fields, executive vice president and Ford’s president of The Americas. “In doing so, we’ll reduce incentive spending and inventory carrying costs for our dealers – with the intent to improve residual values for our customers and stabilize operating patterns for our plants and our suppliers.” MAYFIELD Citing declining business conditions and escalating costs for energy and raw materials, Continental Tire North America (CTNA) has announced plans to close its facility in Mayfield. “Although we have seen recent improvements in our manufacturing costs and replacement business, we must continue to implement measures to reduce our costs and return CTNA to profitability,” said CTNA President Alan Hippe. The closing is the final nail in the coffin for the Mayfield plant, which lost 760 jobs in 2004 when the company eliminated tire production at the facility. At that time, officials with North Carolina-based CTNA noted that the Mayfield plant was the company’s most expensive to operate. Since eliminating tire production in Mayfield, the plant has served as a mixing facility and warehouse for CTNA. The shutdown is expected to be complete by the end of January. STATE Fourteen Kentucky colleges have been recognized as being among the best postsecondary institutions in the country, according to the “America’s Best Colleges 2007” listing compiled by U.S. News & World Report. For the 12th year, Berea College was named as the No. 1 comprehensive college in the South. (Comprehensive colleges are defined as those that primarily focus on undergraduate education – as do liberal arts colleges – but grant fewer than 50 percent of their degrees in liberal arts disciplines.) The school received a perfect 100 based on academic reputation, retention, faculty resources, student selectivity, financial resources and alumni giving rate. Asbury College in Wilmore ranked third in the same category, followed by Thomas More and Kentucky Wesleyan College at No. 25 (a tie), Brescia University (34), Pikeville College (46) and Kentucky Christian University. In the national universities category, the University of Kentucky was listed at No. 112. National universities are defined as those that offer a full range of undergraduate majors, as well as master’s and doctoral degrees. Of the 248 national universities in the nation, 162 are public and 86 are private. Of the nation’s liberal arts colleges – those that emphasize undergraduate education and award at least 50 percent of their degrees in the liberal arts – Centre and Transylvania were recognized, ranking No. 44 and No. 95, respectively. In the rankings for the best universities-masters category, Murray State University was the highest-ranking Kentucky school in the South region, coming in at No. 15. Also included in that category were Bellarmine (18), Western Kentucky University (41) and Morehead State University (63). The universities-masters category includes schools that provide a full range of undergraduate programs and some master’s level programs, but few, if any, doctoral programs. SIMPSON COUNTY A start-up company that produces modular building panels is moving into the former Tyco Electronics facility in Franklin and expects to begin operations in the 180,000-square-foot building this month. Nu-Tech Building Systems will produce Structuralcomb modular building panels that are put together in such a way as to produce a low-cost, high-strength rigid building panels. According to Nu-Tech Chairman and CEO Victor W. Allison, the insulated panels offer triple insulation against heat, cold and sound and reduce building costs by some 70 percent, compared to standard construction methods. Allison said the company selected Franklin over Baton Rouge, La. and Panama City, Fla. Despite the fact that labor costs were somewhat higher in Kentucky, said Allison, Franklin’s rail and interstate access were important factors in the selection process. The project represents an investment of some $3 million. Allison anticipates hiring up to 500 employees within the next 18 months. COVINGTON
With approximately 9,700 employees, APAC operates in 14 Southern and Midwestern states and has 93 aggregate production facilities, including 36 permanent operating quarry locations. APAC also has 31 ready-mix concrete plants, 226 hot-mix asphalt plants and more than 13,000 pieces of mobile equipment. When the transaction is completed, Ashland will consist of its four chemical divisions: Ashland Performance Materials, Ashland Distribution, Valvoline and Ashland Water Technologies. PULASKI COUNTY
A consortium that includes the state governments of Kentucky and Tennessee, the University of Kentucky, the University of Louisville, the University of Tennessee and the Oak Ridge National Laboratory submitted its expression of interest to the Department of Homeland Security on March 31. In all, 29 organizations nationwide submitted letters of interest seeking consideration from the site. That list has now been narrowed down to 14. The Kentucky/Tennessee consortium’s proposal, if successful, could mean the creation of hundreds of jobs both during construction and in staffing the facility following completion. The Department of Homeland Security estimates that the facility, which will contain approximately 500,000 square feet of lab space, will cost upwards of $450 million. An economic study indicates the facility would support more than 400 jobs with an annual local payroll of more than $30.5 million. Construction of the lab itself would create $262 million in new payrolls. The National Bio and Agro-Defense Facility would provide the nation with its first integrated agricultural, zoonotic diseases and public health research, development and testing facility. Over the next few months, the Department of Homeland Security will be conducting site visits and gathering more information. Based upon those results, the department will continue the process of narrowing down the field of possible sites, with the next down-select decision possibly determined by early next year. CHRISTIAN COUNTY Riken Elastomers Corporation has announced plans to build a 57,802-square-foot manufacturing facility on 24 acres in Hopkinsville’s Commerce Industrial Park. The new facility will be used to manufacture thermoplastic elastomer compounds for the automotive industry. The project represents a joint venture between Riken Technos Corporation and Mitsubishi Corporation. Established in 1951, Riken Technos began with a PVC compounding plant in Tokyo. The company has grown by adding manufacturing capabilities and sales offices in Japan, Thailand, Indonesia, China and the United States. The company currently has 1,476 employees worldwide with $608 million in sales. Riken officials said they selected the Hopkinsville site based on the area’s location in relation to Japanese-owned car parts manufacturers in the United States. The Kentucky Economic Development Finance Authority has granted preliminary approval for the company to receive tax benefits up to $900,000 under the Kentucky Rural Economic Development Act, an incentive program designed to increase employment in the state. The plant is expected to be operational by July 2007 and will initially create 24 new jobs. LOUISVILLE BAE Systems, a trans-Atlantic defense and aerospace company, has announced plans to expand its business operations in Louisville. The expansion will result in the addition of more than 90 jobs, many in engineering and management. “With the Navy’s decision to go forward with the new destroyer, the company has the opportunity to grow elements of its business at its existing Louisville plant,” said Keith Howe, BAE Systems’ vice president and general manager for Armament Systems Division in Minneapolis. Howe added that this is the third new Navy gun program to be introduced at the Louisville facility in recent years. In addition to the growth in gun work, the company announced plans to centralize its Navy logistics, training and support in a new Engineering and Fleet Support Center at the Louisville Industrial Park to provide service for current and future fleet products in a location closer to the customer. BAE currently employs approximately 300 people in Louisville and has a worldwide workforce of more than 100,000. EARLINGTON Jennmar, a Pittsburgh-based producer of steel roof bolt products, has announced plans to build a new manufacturing plant on 24 acres in Earlington. Though the company originally planned to build a 25,000-square-foot facility, Jennmar President and CEO Frank Calandra surprised area officials at a community welcoming ceremony by announcing that the company would instead build a plant nearly twice that size. “I decided instead of building a 25,000-square-foot (plant) in the beginning and at stage two add another 15,000 or 20,000 — we’re going to start off at 45,000 square feet,” Calandra said. The plant is expected to begin operations during the second quarter of 2007, making roof support systems for underground mines. The facility will employ approximately 40 people, with wages ranging from $9.50 to $25 per hour. Jennmar currently has seven U.S. plants, including a 70,000-square-foot plant in Winchester that produces roof support systems for mining. The company also has a plant in China and two in Australia. Kentucky has authorized a $1.2 million tax incentive for the project through the Kentucky Rural Economic Development Act. STATE
“Kentucky now has to compete not only with neighboring states, but also with India, China and other countries that are making tremendous investments in education, technology and research,” said Tom Layzell, president of the Council on Postsecondary Education. “This joint initiative steps up Kentucky’s efforts to get more of our population educated in the math and science disciplines, which is so essential in today’s economy.” The 13 school districts that have selected for the awards are: Corbin Independent, Fayette County, Glasgow Independent, Graves County, Jefferson County, Jessamine County, Kenton County, Lawrence County, Marshall County, Morgan County. Pulaski County, Scott County, and Trigg County. The school districts also will create partnerships with industry and other schools to prepare students to be successful in engineering and engineering technology programs at the postsecondary level. BOWLING GREEN
The western Kentucky community, which has a population of 110,500, ranked 14th in the nation on Forbes’ “Best Small Places for Business” list, which was compiled based on office space and energy costs, taxes, living expenses (housing, transportation, food, and general household expenditures), job and income growth, crime, and the availability of labor and the educational attainment of the area workforce. The ranking also factored in access to museums, theaters, golf courses and sports teams. LEXINGTON Keeneland Association has created a Keeneland Scholars Program to provide internships abroad for young professionals in the Thoroughbred industry. The program, which is being done in conjunction with Communicating for Agriculture’s International Exchange Program, will fund visa and travel expenses, allowing scholars to spend up to 12 months living and working in the Thoroughbred industry abroad. Each participant will receive practical training in a variety of areas, including farm management, general horsemanship, veterinary techniques, racehorse management and training, sales preparation and organization, bloodstock transactions and marketing. “Our goal with the Scholars Program is to foster relationships with young people who have been selected as future Thoroughbred industry leaders in their home countries,” said Chauncey Morris, Keeneland sales marketing associate. “We anticipate that in future years the program will expand worldwide to include greater numbers of scholars and encompass emerging breeding and racing markets as well as established ones.” In 2006 the program will award two scholarships – one enabling a South American intern to train in the United States, and another allowing an American to gain experience abroad. Foreign scholars will work exclusively within the Kentucky Thoroughbred industry. LEXINGTON
All Pro has more than 25 years of merchandising experience managing similar programs for the Kentucky Derby, Preakness, Belmont and Breeders’ Cup and was chosen after a nationwide search of firms conducted by the World Games 2010 Foundation, Inc. The company has also been a key merchandiser for the NFL, NBA, MLB, Summer Olympic Games, Davis Cup and America’s Cup events. Regionally, All Pro has been a merchandiser for the Kentucky Wildcats and Louisville Cardinals and the state’s Unbridled Spirit program. “We needed to select a firm capable of managing this massive merchandising effort that extends for such a long time,” World Games 2010 Foundation CEO Jack Kelly said. All Pro will be responsible for all aspects of both the licensing and merchandising programs for the Alltech FEI World Equestrian Games. As well as producing many of their own products, All Pro will be licensing a number of local and national firms to produce additional goods. When completed, the line of merchandise will include souvenir staples such as caps, t-shirts and lapel pins as well as a special selection of upscale gifts and art products. The Alltech FEI World Equestrian Games in Kentucky is expected to sell more than 500,000 tickets and have an economic impact of more than $200 million. STATE More than $40 million has been distributed to former agents and other creditors by the Kentucky Central Life Insurance Company estate. The company’s financial problems led the Kentucky Office of Insurance to assume control of Kentucky Central Life in early 1993; the company entered liquidation the next year. Last month’s distribution of funds included $9 million in deferred compensation to about 650 former Kentucky Central agents. “Under statute, these payments could not be made until other issues had been resolved, so we are very happy to have reached this point in the liquidation,” said Julie Mix McPeak, Kentucky Office of Insurance executive director and Kentucky Central liquidator. McPeak said the estate is taking the necessary steps to prepare and finalize the reimbursement to Jefferson-Pilot Life Insurance Company for amounts owed to former policyholders of Kentucky Central for items such as additional expense charges and lower crediting rates on their account balances. BOWLING GREEN Bowling Green-based Houchens Industries Inc. has expanded the insurance arm of its business with the acquisition of Synaxis Van Meter Insurance Agency Inc. and Employers Risk Services Inc. Financial details were not disclosed. Synaxis Van Meter is located in Bowling Green, while Employers Risk Services is headquartered in Franklin, Tenn. The acquisitions make Houchens Insurance Group one of the nation’s largest employee stock ownership plan-owned insurance agencies, with more than 130 employees and six offices in Kentucky and Tennessee. The combined annual gross sales figures exceed $250 million. Houchens already boasts the distinction of being the largest 100 percent employee-owned company in the nation, with more than 10,000 employee/owners and a presence in all 50 states. The company’s diverse holdings include more than 300 retail grocery stores (which operate under the Houchens IGA Food Land, Food Giant, Piggly Wiggly, and Save-a-Lot names, among others), Scotty’s Construction, Steward and Ritchey Construction, Retail Logic/Pan Oston, Southern Recycling, Secondary Fibers, Commonwealth Brands, Hitcents.com and Four Seasons Development Corp. Over the course of the last decade, Houchens’ annual revenue has grown from $280 million to more than $2.3 billion. STATE
Research has shown that women and men respond differently to some medical treatments, present with different symptoms for the same diseases and generally experience health issues in different ways. Clinical trials offered through the registry program offer women access to new drugs and alternative therapies, specialty physicians, support systems and, in some cases, monetary compensation.
TENNESSEE
The transaction is valued at approximately $33 billion, making it one of the largest leveraged buyouts in U.S. history. Nashville-based HCA, founded in 1968, is one of the country’s largest owners and operators of hospitals and health care facilities, with 182 hospitals and 94 outpatient surgery centers in 22 states, England and Switzerland. HCA and its affiliates employ approximately 190,000 workers. The transaction is expected to close during the fourth quarter. INDIANA
The new facility is part of a joint venture between Aventine Renewable Energy Holdings Inc. of Illinois and Louisiana-based Consolidated Grain and Barge Co. The $400 million plant will eventually produce 220 million gallons of ethanol annually and will use 80 million bushels of corn from area farmers. The new facility, which will employ about 70 people, is expected to begin production by April and be at full production by the beginning of 2010. Aventine will run the processing facility and market the ethanol to many of the leading energy companies in North America, including BP Products North America, ConocoPhillips Co., Chevron Texaco Products Co., Shell Oil Products U.S., and Marathon Ashland Petroleum LLC. CGB’s role will be to purchase corn from local farmers and market the dried distillers grain produced in ethanol-making to companies in Europe, Japan, Asia and the U.S. for use in animal feeds. In the past 18 months, Indiana has announced 12 new ethanol plants and three new biodiesel plants. The plants are expected to create nearly 675 new jobs for Indiana and bring about nearly $1.77 billion in capital investment.
Business Briefs BARDSTOWN
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BOONE COUNTY
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ERLANGER
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HIGHLAND HEIGHTS
LEXINGTON
LOUISVILLE
MONTGOMERY COUNTY
NEWPORT
RICHMOND
SEBREE
SCOTT COUNTY
TAYLOR COUNTY
WALTON
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. |
Kindred Healthcare, Inc., a Louisville-based health care services company, has signed a letter of intent with AmerisourceBergen Corporation to combine the two companies’ institutional pharmacy businesses.
Currently, Kentucky produces some two million gallons of biodiesel; new plants under construction will result in nearly 70 million gallons being produced by mid-2007. Marathon’s new facility will help distribute that fuel to retailers throughout the state. 
The shutdown will result in job losses for some 150 workers. 
Ashland Inc. has sold the stock of its wholly owned subsidiary, Ashland Paving And Construction, Inc. (APAC), to Oldcastle Materials, Inc., for $1.3 billion. 
In announcing the sale to Oldcastle, Ashland President James J. O’Brien said the decision was part of the company’s concentrated effort to focus on its future as a diversified chemical company. 
A Pulaski County site is one of 14 in the nation being considered by the U.S. Department of Homeland Security for a new national bio and agro-defense facility. 
The plans call for expansion of work on the company’s major naval programs, specifically supporting the U.S. Navy’s newest destroyer, the DDG 1000. The company intends to significantly increase engineering, management and production work on the Advanced Gun System, the Navy’s new 155mm gun, along with its magazine and subassemblies.
The Kentucky Department of Education and the Council on Postsecondary Education have awarded grants to 13 Kentucky school districts to help fund engineering initiatives to better prepare more students to enter engineering careers. The grants will also be used to help enhance the quality of math and science instruction. The awards provide $650,000 over two years to be shared among the 13 recipients.
Bowling Green has been named as one of the nation’s best small communities in which to do business, according to a recent report by Forbes Magazine.
All Pro Championships, a Kentucky-based sports merchandising firm, has been selected as the exclusive licensing organization and merchandiser for the Alltech FEI World Equestrian Games, scheduled to be held at the Kentucky Horse Park in 2010.
Kentucky’s state government is working with the University of Kentucky to promote a new statewide registry to track women’s health trends in the commonwealth. According to Joyce Jennings, director of the Cabinet for Health and Family Services’ women’s health division, the registry “will help us better understand the impact of geographic, cultural, socioeconomic and other factors on the health of women in the commonwealth.”
The board of directors of Hospital Corporation of America (HCA) has given its unanimous approval for the company to be acquired by company founder Dr. Thomas F. Frist, Jr. and a group of private equity sponsors that includes Bain Capital, Kohlberg Kravis Roberts and Merrill Lynch Global Private Equity.
Plans have been announced for the construction of a new ethanol plant at the Port of Indiana in Mount Vernon, Ind. 
Monessen Hearth Systems Co. has received approval for $700,000 in state tax credits as part of the company’s plan to expand its Bourbon County manufacturing plant, where it produces gas logs, fireplaces, and gas and woodburning stoves. The expansion is expected to create 70 new jobs with an average hourly wage of $11.82. 
Restructuring plans at Lexmark International will result in a total of 925 job cuts, 100 more than the Lexington-based printer manufacturer had announced earlier in the year. Most of the additional cuts will affect jobs in Europe.
Cummins Inc. has signed an agreement with a major automotive manufacturer to produce and market a light-duty, diesel-powered engine for use in variety of applications, including standard pickup trucks and sport utility vehicles. Officials with Cummins, a Columbus, Ind.-based engine company, said the identity of their partner in the venture is not being disclosed at the request of the automotive company, due to “competitive reasons.” Cummins said the diesel engine will provide a 30 percent fuel savings over gasoline-powered engines for comparable vehicles. Cummins is still in the process of considering sites for the new manufacturing plant, which is expected to employ some 600 workers within two years of the product launch. The first vehicles utilizing the new engine are expected to be ready for market by the end of the decade.