Home » Fast Lane — March 2013

Fast Lane — March 2013

By Karen Baird

STATE: $22B in 2012 exports sets sets new annual Ky. record; Canadian trade mission planned

Kentucky’s 2012 exports set a new all-time annual record, with $22 billion in sales of Kentucky-made products and services. With exports to 199 nations, the record represents a 10 percent growth from 2011, more than double the U.S. average growth rate of 4.5 percent.

FL_KyExports (credit Toyota)
Motor vehicles and parts topped Kentucky’s list of exported products, with $4.4 billion in export sales.

Gov. Steve Beshear applauded the record, saying it shows the efforts of the Kentucky Export Initiative (KEI) partners to encourage businesses to explore or expand their exporting opportunities have been paying off.

KEI was formed to bring together agencies and organizations to help facilitate international trade opportunities for Kentucky businesses and is comprised of government entities, business organizations and trade experts.

Motor vehicles and parts topped the chart with $4.4 billion in export sales. Aerospace products and parts were second, with $3.8 billion, while resin/synthetic rubber came in third, accounting for $1.4 billion in exports.

Kentucky’s top trading partner once again was Canada, with $7.3 billion in products and services, with Mexico ($1.7 billion), United Kingdom ($1.5 billion), Japan ($1.3 billion) and Brazil ($1.15 billion) rounding out the top five. To further expand trade opportunities with its leading trade partner, the KEI will lead a four-day international business trade mission to Toronto in June 2013.

Companies wishing to participate in the trade mission can apply for a grant to help cover their costs, with grant assistance for the trade mission available through the U.S. Small Business Administration State Trade and Export Promotion (STEP) program administered by the Cabinet for Economic Development. More information about the trade mission and STEP grant can be found at KYExports.com.

TOP KENTUCKY EXPORTS (2012)

Motor vehicles/parts ……………$4.4 billion

Aerospace products/parts……..$3.8 billion

Resin/synthetic rubber………….$1.4 billion

STATE: UK researchers predict Ky.’s economy will outpace nation’s; education, innovation are key

Researchers with the University of Kentucky Center for Business and Economic Research (CBER) predict that the Kentucky economy will outpace the national economy, with Central Kentucky experiencing faster growth and lower unemployment than the rest of the state.

The forecast, part of CBER’s 41st annual economic report, notes that Kentucky fared somewhat better through the recent recession than many parts of the nation. “Employment is rising, generally across all sectors, and the unemployment rate in Kentucky, once markedly higher than the nation, has fallen more rapidly and is poised to fall below the national rate,” the report said.

The report covers a variety of issues, ranging from the economic forecast for 2013 to a comprehensive presentation of economic, education, health, environmental, energy, community, public finance and demographic factors, trends and forces affecting Kentucky’s future economic prosperity.

The authors of the report – Chris Bollinger, CBER director and Gatton Endowed Professor of Economics, and Ken Troske, Sturgill Endowed Professor of Economics and senior associate dean for administration, faculty and research for the Gatton College – said they share a “guarded optimism” about the national, regional and state economic prospects this year.

“We have produced an annual report that paints a diverse and complicated picture of our state’s economy, its communities, and its citizens,” Bollinger said. “Despite the constant change confronting us, there are timeless and enduring lessons. Pursuing educational excellence as well as economic innovation – since ideas, innovation and intellectual capital form the foundation of the knowledge economy – is essential for Kentucky to improve its per capita income and achieve broad prosperity.”

Digital copies of the Center for Business and Economic Research 2013 Annual Economic Report can be obtained at the CBER website or by emailing [email protected].

LEXINGTON: TQL will add 75-plus jobs as part of aggressive expansion

Total Quality Logistics has moved into a new 10,000-s.f. facility in Lexington that is more than triple the size of its previous facility. The move is part of a $1.7 million expansion project that will add at least 75 new full-time jobs by 2015.

TQL arranges transportation of truckload shipments for companies throughout the country.
TQL arranges transportation of truckload shipments for companies throughout the country.

Cincinnati-based TQL is one of the nation’s largest freight brokerage firms, specializing in arranging the transportation of truckload shipments for thousands of companies across the country.

TQL opened its Lexington office less than two years ago, starting with six employees from Cincinnati. Today the company’s Lexington staff has grown to 60 employees and the company plans to grow that number to more than 200 within the next three years.

The Lexington expansion is part of an aggressive national expansion campaign that has been under way for the past four years. During that time, TQL has opened 17 satellite offices across the country with more to come. Since its inception in 1997, the company has grown an average of 30 percent per year,  now employs a staff of more than 2,000 and moves more than 14,000 loads of freight each week.

Though TQL has committed to create at least 75 jobs by 2015 at its expanded Lexington office, the company anticipates exceeding that number, as it has added 50 workers this year alone. The company offers its employees the opportunity to earn unlimited commissions in addition to their base salary. The average compensation for a salesperson who has been selling with TQL for two years is more than $60,000. For the top 20 percent of sales people in the company, TQL says that number jumps to an average of more than $100,000.

ERLANGER: Newly Weds Foods to hire 115 for new food production plant

A Chicago-based food manufacturer has announced plans to establish a regional production facility in Northern Kentucky that will create 115 new jobs.

Leo Culligan, vice president of purchasing for Newly Weds Foods, and Mike Hopp, vice president of manufacturing, present Northern Kentucky Tri-ED Chair/Boone County Judge Executive Gary Moore and Gov. Steve Beshear with a gift showcasing the company’s global presence.
Leo Culligan, vice president of purchasing for Newly Weds Foods, and Mike Hopp, vice president of manufacturing, present Northern Kentucky Tri-ED Chair/Boone County Judge Executive Gary Moore and Gov. Steve Beshear with a gift showcasing the company’s global presence.

Newly Weds Foods, a private, family-owned business founded in 1932, is a global leader in the production of food coatings, seasonings and functional ingredients for the food processing and food service industries. The facility will be Newly Weds Foods’ 13th facility in the United States and its 26th in total. The company employs more than 2,400 people worldwide.

“Demand for our products is growing around the world, and Northern Kentucky provides a central location with an excellent workforce and transportation system,” said Newly Weds Foods President Charles T. Angell.

The company has purchased a 326,000-s.f. facility in Erlanger’s Circleport Business Park from Sonoco for $7 million. The Erlanger plant is expected to be operational by November, with production lines initially including sheeted breaders, Japanese- and American-style bread crumb, and blending capabilities for food-coating systems. The facility will also house a complete research and development lab.

Mike Hopp, vice president of manufacturing for Newly Weds, told the Cincinnati Business Courier that the company chose the Erlanger site for a number of reasons, including easy highway access and the proximity of many of its suppliers and customers.

“If you look at the food processors in the area,” Hopp said, “most of those are our customers.”

BOWLING GREEN: ALPLA plastics plant bringing 72 jobs to Warren County

Austria-based Alpla is the largest producer of packaging in Europe, producing a wide range of plastic bottles and caps for a variety of industries.
Austria-based Alpla produces a wide range of plastic bottles and caps for a variety
of industries.

Alpla Inc., an Austria-based plastic packaging company, plans to establish a new manufacturing plant in Bowling Green that will create 72 new full-time jobs.

The project represents an investment of more than $22 million.

Alpla products include packaging for everyday items such as household goods, personal care, food and beverage, cosmetics, household cleaning and laundry, and oils and lubricants.

“Alpla is not a household name here in Kentucky, but the products the company manufactures are in nearly every home in the commonwealth,” said Gov. Steve Beshear.

First established in Austria in 1955, Alpla has grown into a global company that now has approximately 13,000 employees at 148 sites in 39 countries.

Alpla will locate its new operations in Building IV at the Kentucky Transpark, a spec building built by the Bowling Green Area Economic Development Authority and completed less than a year ago.

SOMERSET: Oil refinery enters into full production after 3-year idle

Demetrios Haseotes, CEO of Menands, N.Y.-based Hemisphere Management Corp., bought a boutique refinery in Somerset in December 2011 for $1.17 million and spent another $10 million to put it back in operation. Photo by Ken Shmidheiser
Demetrios Haseotes, CEO of Menands, N.Y.-based Hemisphere Management Corp., bought a boutique refinery in Somerset in December 2011 for $1.17 million and spent another $10 million to put it back in operation. (Photo by Ken Shmidheiser)

A multimillion-dollar overhaul of Continental Refining Co.’s crude motor oils refinery in Somerset has been completed and the facility is now fully operational, processing crude oil and finished fuel products.

The 80-year-old facility is one of only 150 in the United States and one of just two refineries in Kentucky. It has had a presence in Somerset since the 1930s but began encountering financial difficulties in 2006 with the spike in crude oil prices. The company went through a series of different owners before being purchased by Demetrios Haseotes in 2011 for $1.17 million. Haseotes has since invested another $10 million to make the refinery fully operational after being idled for three years. The refinery is projected to be running at its full capacity of 5,500 barrels per day within five months.

Haseotes, president and CEO of Continental, said priorities during that time include increasing efficiency and conversion by reducing bottlenecks and expanding crude oil supply from regional producers, and hiring more employees to support the expanding capacity. So far, the refinery has created 34 jobs in Somerset and the company estimates that 200 indirect jobs will be created in the region as a result of the refinery’s operations.

The company has secured a contract with Sonoco Partners Marketing and Terminals LP that will ensure a consistent supply of crude oil.

At full capacity, the refinery will be able to produce 23 million gallons of gasoline, 6 million gallons of kerosene, 21 million gallons of diesel fuel and 30 million gallons of heating oils per year.

 BOWLING GREEN: GM puts performance engine center at Corvette plant

Mike Rassel performs the final quality checks on a 2013 Chevrolet Corvette at General Motors’ Bowling Green Assembly Plant. Beginning next year, the plant will also handle production of the high-performance engines that power the Corvette.
Mike Rassel performs the final quality checks on a 2013 Chevrolet Corvette at General Motors’ Bowling Green Assembly Plant. Beginning next year, the plant will also handle production of the high-performance engines that power the Corvette.

General Motors has announced plans to move its Performance Build Center, which allows engine aficionados to build their own specialty engines, from Michigan to the Bowling Green Assembly Plant, where the company produces its popular Chevrolet Corvette.

The move, backed by a $3.5 million investment, is part of a planned consolidation of GM Powertrain engineering sites and is slated for the first quarter of 2014.

“We host thousands of guests each year, many of whom are here to see their Corvette being built,” said Plant Manager Dave Tatman. “Bringing the Performance Build Center here simply adds to the thrill of purchasing a Corvette and increases satisfaction for our customers and employees.”

In 2011, GM announced a $131 million investment for Bowling Green Assembly to support production of the next-generation Corvette, which Chevrolet unveiled on Jan. 13.

The final economic impact for the Bowling Green community is yet to be determined but will include approximately 20 created or retained jobs, specifically for the Performance Build Center. In the past year, more than 150 jobs have been added to Bowling Green Assembly and more growth is expected as production of the 2014 Corvette begins.

Mike Rassel performs the final quality checks on a 2013 Chevrolet Corvette at General Motors’ Bowling Green Assembly Plant. Beginning next year, the plant will also handle production of the high-performance engines that power the Corvette.

STATE: SBA website advises business owners about Affordable Care Act

The U.S. Small Business Administration (SBA) has launched a new web page and blog dedicated to educating small business owners about the Affordable Care Act. The new tools will serve as a gateway for small-business owners, connecting them with information provided by SBA’s federal partners responsible for implementing the law, including the U.S. Department of Health and Human Services.

The new website – sba.gov/healthcare – breaks down the key provisions of the healthcare act based on business size in the following categories: self-employed, fewer than 25 employees, fewer than 50 employees and more than 50 employees.

The web page also provides links to other useful information for small businesses, including a glossary of key healthcare reform terms, an interactive timeline with dates for when certain reforms will be implemented, a state-by-state breakdown of healthcare options, and how to learn more about specific tax provisions and regulations. Additional resources will be added as they become available.

The blog, entitled Health Care Business Pulse (sba.gov/blog), will provide small-business owners with continuous updates about the implementation of the act. The blog is for informational purposes only and is not intended as legal or tax advice. Readers should consult their legal or tax professionals to discuss how specific matters relate to their individual business circumstances.

MOREHEAD: ISC barrel maker plans $7.2M stave plant in Rowan County

Independent Stave Co. is building a new mill in Morehead that will supply white oak lumber to its barrel-making plants around the world.
Independent Stave Co. is building a new mill in Morehead that will supply white oak lumber to its barrel-making plants around the world.

Independent Stave Co., a Missouri company that is one of the largest barrel manufacturers in the world, plans to build its fifth stave mill in Rowan County, according to The Morehead News.

In addition to producing staves – the wooden slats that are used to create barrels – for the company’s barrel-making plants located around the world, the plant will also export the oak to an ISC subsidiary that will then sell the wood to cooperages in Europe, South America, Africa and Australia.

The company’s decision to locate in eastern Kentucky is tied to an increased global demand for the white oak timber found in the region, ISC Marketing Director Teri Smith told the newspaper. The plant will purchase and process white oak lumber from Kentucky, Ohio and West Virginia.

ISC is buying 62 acres on which to build a $7.2 million facility that will initially employ a staff of 45. That number is expected to grow to 70 within two years.

The plant will be operated by ISC subsidiary American Stave Co.

Covington: Russian bottle company taps Kentucky for first U.S. plant

Westpack, a bottle decorating and packaging company based in Russia, is investing $4.49 million to establish new manufacturing operations in Covington that will create 63 new full-time jobs.

Westpack is a new expansion of UniPack Group, a full-service glass container decorating and packaging company serving the alcohol beverage industry.

“With decoration plants in Russia and Europe, expanding into the U.S. market was a natural next step,” said Simon Mnoyan, Westpack managing director. “And selecting the right state for our production was a function of customer logistics, business operating costs and quality of life. The Commonwealth of Kentucky provided and met all three requirements for our expansion.”

The Covington facility will coat, print, stamp, etch and label glass bottles for use by the U.S. spirits industry. The company hopes to begin production by the end of March.

In addition to bottle decorating and packaging, the 126,000-s.f. facility will also be equipped to provide short-run decorations for special events and promotions.

“We are told that large companies, especially international companies, look for places that are known for their diversity and inclusiveness when establishing new locations,” said Covington Mayor Sherry Carran. “Covington is gaining a reputation for those very desired characteristics, and I believe it is why Westpack chose Covington for its new manufacturing plant. Westpack locating here is a boost to the momentum we have been experiencing and a boost to our Latonia neighborhood.”

LEXINGTON: New center for innovation in U.S. education will launch at UK

The University of Kentucky will be home to a new national education reform program that is being launched with funding from two of the country’s leading foundations, the Bill and Melinda Gates Foundation and the William and Flora Hewlett Foundation.

Gene Wilhoit will head the new National Center for Innovation in Education, housed at the University of Kentucky.
Gene Wilhoit will head the new National Center for Innovation in Education, housed at the University of Kentucky.

The goal of the National Center for Innovation in Education will be to contribute to the national education reform agenda with a focus on ensuring that more states are adopting and implementing a standard definition of college and career readiness.

The new program will be directed by former Kentucky Department of Education Commissioner Gene Wilhoit, who most recently spent six years as director of the Council of Chief State School Officers in Washington, D.C. During his tenure at CCSSO, Wilhoit spearheaded the development and adoption by 45 states of the Common Core State Standards.

“As other countries are improving their education systems, too many American students are not being properly prepared in foundational subjects such as reading, writing, math, and science,” Wilhoit said. “Nor are we paying sufficient attention to cultivating the skills students will need to thrive in a globally connected job market.”

The Center for Innovation in Education will be housed at the UK Coldstream research campus. The center will work in close collaboration with other organizations, but will have its own executive team and funding structure.