Fast Lane — June 2013

By Karen Baird

HENDERSON: Century buys Sebree smelter for $61M, reaches power deal and will hire another 500

Century Aluminum Co. has entered into a definitive agreement to acquire the assets of the Sebree aluminum smelter in Henderson County from Rio Tinto Alcan Inc. for $61 million in cash.

The Sebree smelter being acquired by Century Aluminum can produce up to 205,000 metric tons of primary aluminum. The plant employs more than 500 people. (Photo by Rio Tinto Alcan)
The Sebree smelter being acquired by Century Aluminum can produce up to 205,000 metric tons of primary aluminum. The plant employs more than 500 people. (Photo by Rio Tinto Alcan)

Century also owns a smelter in Hawesville, Ky., that is the company’s largest facility and the only producer of high-purity aluminum in North America. The acquisition of the Sebree smelter means the addition of more than 500 employees and an annual production capacity of 205,000 metric tons of primary aluminum.

Century President and CEO Michael Bless said ownership of both the Hawesville and Sebree facilities would provide benefits for both operations through the sharing of best practices in safety, technical and operational practices and procedures.

The acquisition is the latest development in a situation that has been fraught with tension, primarily revolving around the cost of powering the massive smelter operations. Both Century and Rio Tinto Alcan have maintained that their electric rates were too high and in August 2012, Century notified Big Rivers Electric Corp. that it would terminate its electricity contract in August 2013, which would ultimately mean closing the Hawesville plant. Alcan’s Sebree plant followed suit in January of this year.

On the same day Century unveiled the Sebree acquisition, it also announced it had reached a tentative agreement with Big Rivers and Kenergy Corp. on a plan that would provide market-priced power for the Hawesville smelter. Under the agreement, the electric cooperatives will purchase power on the open market and pass it through to Century at the market price – a deal that could keep the smelter open and protect its 650 jobs.

Bless added that the tentative agreement could serve as a first step toward securing rates that will also help keep the Sebree smelter in operation.

The power agreement is subject to negotiations and approvals from various third parties, including the Kentucky Public Service Commission. The current power contract with Big Rivers expires on Aug. 20.

PIKEVILLE: High Ridge Mining to develop 7 deep mines in Pike County, hire 250 to export Ky. coal to China

High Ridge Mining has announced plans to develop seven deep mines in Pike County, creating more than 250 new jobs.

Fast-Lane---High-Ridge-MiningHigh Ridge is a Kentucky corporation owned by long-time coal operator Bill Smith, a former vice president with Sidney Coal. Smith said he plans to begin hiring miners in the coming months, with the process being administered by the Office of Employment and Training in Pikeville. Each of the seven mines will initially employ 36 miners.

“Since some 4,500 miners are now unemployed in Eastern Kentucky, working in connection with the office of Employment and Training is a necessary step to quickly and effectively begin the hiring process,” Smith said.

Smith said he plans to mine 1 million tons a year and has already found a buyer: Most of the coal will be exported to China.

“Mr. Smith is ahead of the curve in creating this connection to the Asian and European markets,” said Pike County Judge-Executive Wayne T. Rutherford. “Coal has become out of fashion domestically due to unnecessary intense restrictions and regulations imposed on the coal industry by the federal government. The short-term economic outlook for coal seems dismal, but due to the growth taking place in Asia, coal is needed to sustain it, making the long-term outlook for Eastern Kentucky coal rather bright.

LOUISVILLE: A&R Logistics moving its headquarters and 50 jobs to Louisville

Fast-Lane---A&R-LogisticsA&R Logistics Inc., a leading provider of dry bulk transportation and logistics solutions, has announced plans to move its corporate headquarters to Louisville.

The company, which serves the plastics, chemicals, agricultural and food industries in North America, is currently headquartered in Illinois. The company is investing more than $3 million in the move, which will bring 50 new jobs to the Louisville area.

“Louisville offers tremendous advantages to our company with its location, workforce and its commitment to growth in the logistics area,” said A&R Logistics President Richard Mitchell. “We believe there is no better city to provide such a compelling lifestyle environment for our employees who will relocate here. We also believe strongly that Louisville will serve as an excellent source of new talent to bring into our organization.”

Founded in 1969, A&R has grown from having only a few trucks to a company that has a fleet of 700-plus trucks, 1,100 trailers and a staff of more than 1,000 located across the country. The company also has a network of strategically located packaging and warehouse facilities, with more than 1.4 million s.f. of warehouse space.

The company is leasing 5,500 s.f. of office space on the University of Louisville’s Shelby Campus.

The Kentucky Economic Development Finance Authority preliminarily approved the company for tax incentives up to $1.5 million through the Kentucky Business Investment program.

STATE: Tourism impact in 2012 up 4.4% to $12.2B, accounts for 174,000 jobs

New figures released by the state last month show that tourism in Kentucky had an economic impact of in $12.2 billion in 2012, a 4.4 percent increase over the previous year.

tourismTourism was responsible for 174,006 jobs in Kentucky in 2012 – an increase of 4,078 jobs from the previous year. The jobs generated more than $2.7 billion in wages for Kentucky workers, an increase of nearly $117 million from the previous year.

All nine tourism regions showed gains for 2012 and in total, tourism generated $1.227 billion in tax revenues for local and state governments in 2012, up from $1.223 billion in 2011.

Kentucky’s Tourism, Arts and Heritage Cabinet cited the growth of the Kentucky Bourbon Trail as one of the year’s major successes: The trail reported a record 509,292 visitors in 2012, an increase of 15 percent from 2011. The Bourbon Trail highlights Kentucky distilleries and allows visitors the opportunity to see how bourbon is made.

WALTON: Lyons Magnus launches $5M expansion, plans to add 50 new jobs

Lyons Magnus, a company that develops and markets products for the food industry, has announced a $5 million expansion of its plant in Walton.

The California-based company has had a presence in the Northern Kentucky area since 1983 and has continued to expand since then. The company currently has 120 employees at its 260,000-s.f. Walton plant and plans to add another 50 jobs to support the upcoming expansion, which will involve building a 40,000-s.f. facility for food processing, warehousing space and shipping. The expansion will also include the addition of a new production line at its existing plant.

Robert Smittcamp, chairman and CEO of Lyons Magnus, said the Northern Kentucky location has been an “ideal” fit for the company, noting that “65 percent of America lives within 600 miles” of the area.

“Our strategy is to grow or source the fruit products we use in California, ship those here and convert them to finished products, which can be transported throughout the Midwest and East Coast,” Smittcamp told The Cincinnati Enquirer.

Lyons Magnus produces its own line of food products in addition to developing products for a wide range of food service customers. Approximately 60 percent of the company’s 2,200 products are distributed from the Walton facility.

LEXINGTON: Kentucky Spirit Health Plan to lay off its entire 145-member staff

After informing the Kentucky Cabinet of Health and Family Services last fall of its intent to terminate its Medicaid managed-care contract with the state, the Kentucky Spirit Health Plan will begin laying off its entire 145-member staff effective July 5.

fast lane - kentucky spiritKentucky Spirit began providing Medicaid managed-care services for the state in November 2011, but less than a year later filed a lawsuit against the state, alleging it provided inaccurate cost information in its rush to privatize Medicaid management. The company says that as a result of the inaccuracies, it has encountered unsustainable financial losses, which were further compounded by new cabinet policies and initiatives.

As of last fall, Kentucky Spirit served 125,000 Medicaid recipients in 104 Kentucky counties. At that time, Health and Family Services Secretary Audrey Tayse Haynes said those enrolled in Kentucky Spirit would be moved to another managed-care organization.

WINCHESTER: New $8M Taica packaging manufacturing plant will hire 30

Gov. Steve Beshear joined Taica Corp. President and COO Taito Suzuki and Elena Masterson of Taica Cubic Printing Kentucky for a ribbon-cutting ceremony to celebrate the Taica’s new manufacturing facility in Winchester. (Photo courtesy of Gov. Steve Beshear's office)
Gov. Steve Beshear joined Taica Corp. President and COO Taito Suzuki and Elena Masterson of Taica Cubic Printing Kentucky for a ribbon-cutting ceremony to celebrate the Taica’s new manufacturing facility in Winchester. (Photo courtesy of Gov. Steve Beshear’s office)

Local and state officials gathered on April 22 to celebrate the grand opening of Taica Corp. of Japan’s new manufacturing facility in Winchester.

Taica Corp. is a 65-year-old company that manufactures shock-absorbing material and components, vibration-damping material and components, and heat-conductive materials, as well as a three-dimensional decoration technology called cubic printing and e-cubic, a process that uses specialized film to transfer printed patterns onto three-dimensional objects such as automotive parts, sports equipment and furniture.

Taica has invested more than $8 million in the plant and plans to hire 30 full-time employees over the next several years.

STATE: New website explains how to use health benefit exchange

Kentucky has launched a website to provide information about the state’s new health benefit exchange and help both individuals and small businesses determine if they are eligible for payment assistance or tax credits to help cover insurance costs.

kyknectInformation on the newly formed health benefit exchange, called Kentucky’s Healthcare Connection, can be accessed at kynect.ky.gov.

Open enrollment for individuals seeking to purchase insurance through the exchange begins Oct. 1 and runs through March 31, 2014, with coverage beginning as soon as Jan. 1, 2014. Open enrollment for small businesses also begins Oct. 1, but businesses with fewer than 50 employees will be able to choose to enroll employees in plans offered through kynect at any point after that date

Small businesses will be able to use kynect to enroll their employees in health plans, and businesses with fewer than 25 employees may qualify for tax credits by using kynect.

PIKEVILLE: Medical center member of famed Mayo Clinic Care Network

Mayo Clinic Southeast Medical Director Stephen Lange, M.D. (right) presents a special award to Pikeville Medical Center President and CEO Walter May at the press conference announcing that PMC would be joining the Mayo Clinic Care Network. (Photo courtesy of Pikeville Medical Center)
Mayo Clinic Southeast Medical Director Stephen Lange, M.D. (right) presents a special award to Pikeville Medical Center President and CEO Walter May at the press conference announcing that PMC would be joining the Mayo Clinic Care Network. (Photo courtesy of Pikeville Medical Center)

The Pikeville Medical Center (PMC) has become the newest member of the Mayo Clinic Care Network, an alliance that will enable patients in PMC’s service area to gain the benefits of Mayo Clinic’s knowledge and expertise without having the travel far from home.

As part of the network, PMC healthcare providers have access to Mayo Clinic resources, including its online point-of-care information system and its electronic consulting process that connects physicians with Mayo Clinic specialists on questions of diagnosis, therapy or care management.

The network launched in 2011 and currently has member organizations in Arizona, Florida, Illinois, Kentucky, Michigan, Minnesota, Missouri, Montana, New Hampshire, North Dakota, Puerto Rico and Mexico.

PMC is currently undergoing a $150 million expansion that will add an 11-story clinic and a 10-story parking facility. The 261-bed facility employs more than 2,300 people.

STATE: Kentucky to expand Medicaid program, add coverage for 308,000

FL_Medicaid-expansionCalling it “the single most important decision in our lifetime for improving the health of Kentuckians,” Gov. Steve Beshear announced on May 9 that Kentucky would be expanding Medicaid, adding 308,000 more Kentuckians to the federal health insurance program.

Medicaid currently provides healthcare for low-income or disabled citizens. After the U.S. Supreme Court upheld the federal Affordable Care Act last year, states were given the option to expand Medicaid eligibility to individuals who earn up to 138 percent of the Federal Poverty Level (FPL), with the guarantee that the federal government will cover the entire cost for the first three years.

“Our poor health has contributed to us being a poor state,” Beshear said. “Improved health will help improve our education levels and job opportunities.”

Beshear said that several months of internal analysis, as well as outside studies conducted by the University of Louisville and PricewaterhouseCoopers, determined that the expansion was a good deal for both families in need of healthcare coverage and the taxpayers.

The state says the expansion will create 17,000 new jobs and will have a $15.6 billion economic impact on the state between fiscal year 2014 and the full implementation in FY 2021.

However, an analysis of data by The (Louisville) Courier-Journal indicates that the expansion may be undercut by the state’s shortage of physicians, noting that “Kentucky counties that will see the largest portion of nonelderly residents become eligible for Medicaid often have fewer primary-care doctors per capita.”

BOWLING GREEN: KOBE expanding again, $66M investment will add 100 jobs

Kobe Aluminum Automotive Products broke ground in May for a new 87,000-s.f. building in Bowling Green, the company’s second expansion there in recent months.

The expansion will create 100 new full-time jobs and represents a capital investment of up to $66 million.

kaap-flatLast November, Kobe officials announced that the company would invest $11 million in Bowling Green for the construction of a new 39,000-s.f. building.

Kobe Aluminum is a joint venture between Kobe Steel Ltd., Mitsui & Co. Ltd. and Toyota Tsusho Corp. The company currently has more than 270 full-time employees in Bowling Green and has invested more than $100 million there since opening its doors in 2005.

There are 11 Kobe Steel subsidiaries in the United States, but the Bowling Green location is the only U.S. facility to forge aluminum suspension products for the automotive industry. The new addition makes room for new furnaces, casting machines, forging presses and advanced presses used to meet increasing demand for high-quality precision aluminum components for the automobile industry.

HENDERSON: Gibbs die casting HQ will add 160 jobs with $22.8M expansion

Gibbs Die Casting is expanding operations at its world headquarters in Henderson, adding 160 jobs and investing more than $22.8 million.

Established in 1965 by Bob and Nick Gibbs, the company has been owned by Koch Enterprises Inc. since 1969 and has grown into one of the world’s largest die-casting companies.

Gibbs operates seven factories for aluminum and magnesium casting, machining, assembly and die building, with a total of more than 1.2 million s.f. of floor space.

The company’s Henderson campus has a staff of more than 560 and is home to three casting plants, housing a total of 25 presses. Its machining and tool and die division are also located in Henderson. In addition to current die-casting production, the expansion project includes new manufacturing lines for eight-speed transmission parts and rear axles for the automotive industry

Gibbs also operates factories in Hungary, Brazil and China.

The Kentucky Economic Development Finance Authority preliminarily approved the company for tax incentives up to $3 million through the Kentucky Business Investment program. The performance-based incentive allows a company to keep a portion of its investment over the term of the agreement through corporate income tax credits and wage assessments by meeting job and investment targets.

 

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