By Brandon Mattingly
Kentucky just concluded what many would describe as the state’s most successful year ever in terms of economic development. Not only did the Commonwealth create its most jobs in a decade, but it shattered its all-time investment record for a single year…before the end of May.
In 2017, Kentucky secured commitments for more than 16,000 jobs created and $9+ billion invested, a more than 75-percent increase in investment over its previous record of $5.1 billion in 2015.
Three massive projects – Amazon, Toyota and Braidy Industries – set the tone for the year early, and each tells its own piece of the story of the state’s record year.
First, last January, Amazon announced plans to locate its $1.49 billion Prime Air shipping hub at the Cincinnati/Northern Kentucky International Airport in Hebron. The project is expected to create 2,700 full- and part-time positions on top of Amazon’s current statewide employment of more than 10,000 full-time workers.
“As we considered places for the long-term home for our air hub operations, Hebron quickly rose to the top of the list with a large, skilled workforce, centralized location with great connectivity to our nearby fulfillment locations, and an excellent quality of living for employees,” said Dave Clark, Amazon senior vice president of worldwide operations.
“We feel strongly that with these qualities as a place to do business, our investments will support Amazon and customers well into the future,” Clark added. “We couldn’t be more excited to add 2,000-plus Amazon employees to join the more than 10,000 who work with us today across our robust operations in Kentucky.”
Kentucky, which is located within a day’s drive of 65 percent of the nation’s population, boasts a number of advantages that appeal to companies in the business of logistics and distribution. In fact, beyond the Amazon announcement, Kentucky landed 21 logistics-related projects in 2017 with investments totaling more than $451 million and more than 1,300 jobs created.
The announcement of a nearly $273 million distribution center in Louisville also shines light on the upward trajectory of logistics in Kentucky. Industrial supplier Grainger will create as many as 431 jobs with that new facility.
The state’s logistics industry is expected to grow at an even faster rate in the years ahead as companies look to capitalize on the location of Amazon Prime Air, as well as the expanded presence of UPS, DHL and FedEx. One such example is the announcement of a new iServe Products facility in Northern Kentucky. The operation will be an Amazon fulfillment distributor of health, household, personal care and pet products. The more than $4.2 million investment and promise of 100 jobs is a sign of more to come in Kentucky’s logistics sector.
Toyota joined Kentucky’s billion-dollar club in early April with the announcement that its Toyota Motor Manufacturing Kentucky Inc. (TMMK) operation in Georgetown would undergo a $1.33 billion overhaul to update and upgrade the facility. This was followed up in September with an investment of $120.9 million to increase 2.5-liter engine capacity at the facility, and in October with the unveiling of the $80 million Production Engineering Manufacturing Center, which will locate more than 600 engineers in Georgetown to work hand-in-hand with Toyota’s production team.
“Toyota’s impact on the Kentucky economy reaches every corner of the Commonwealth, and this production engineering headquarters is just the latest example of the company’s dedication to our great state,” said Kentucky Governor Matt Bevin at the time of the engineering center’s opening. “It is my goal to turn Kentucky into the center of engineering and manufacturing in the United States, and this is the type of project that proves that goal is attainable.”
Those aspirations seem more feasible with every manufacturing announcement throughout the state, particularly with the help of the state’s robust automotive industry. Billion-dollar projects aside, Kentucky landed 37 automotive-related projects in 2017 totaling more than $1.54 billion in investment and over 3,000 full-time jobs.
The industry’s growth in the Commonwealth was truly a statewide effort over the past year. Kayser Automotive Systems USA announced it will invest more than $8.47 million and create 100 jobs in the West Kentucky community of Fulton, and MSSC in Hopkinsville shared its plans for a nearly $11.8 million expansion to create 42 jobs. Meanwhile, a new tanker truck manufacturing operation was announced in Pikeville in Eastern Kentucky, with Silver Liner LLC investing $570,000 and creating 50 jobs, and Toyo Seat USA Corp. announced an $11 million expansion and 37 new jobs in Flemingsburg.
Pinpoint any region in Kentucky and you won’t have to go far to find recent growth of an automotive OEM or supplier.
The final billion-dollar announcement – and the one that put the Commonwealth on the cusp of a new record – came in late April, when Braidy Industries went public with plans to construct a $1.3 billion aluminum rolling mill in Eastern Kentucky. Not only does the company anticipate creating 550 advanced manufacturing jobs, but 1,000 construction jobs will be generated to construct the 2.5 million square-foot facility in Ashland.
“The great thing about the Braidy Industries commitment is that the location of this massive aluminum rolling mill will have a far-reaching impact on Eastern Kentucky as a whole,” said Terry Gill, secretary of the Kentucky Cabinet for Economic Development. “Braidy will serve both the automotive and aerospace industries, but more importantly, we expect it also will attract additional investment and job creation in the years ahead. The full scope of this project’s impact will not be clear for some time, but it will certainly be a game-changer for Eastern Kentucky and the entire Commonwealth.”
Braidy Industries represents the most substantial of the 12 primary metals investments in Kentucky in 2017, and while the industry may not be represented by the volume of projects seen within the logistics and automotive sectors, it has not lacked for announcements of great scale.
Mubea Tailor Rolled Blanks LLC recently announced a more than $73.3 million expansion of its Northern Kentucky operation focused on the production of flexible cold-rolled steel for use in transmission components. As many as 118 full-time jobs are associated with the project. In May, Nucor Steel Gallatin unveiled plans for a whopping $213.1 million investment – and 75 new jobs – at its hot-rolled coiled steel and flat-rolled steel manufacturing plant in Ghent along the Ohio River.
Not to be outdone, Logan Aluminum Inc., located near Russellville in Western Kentucky, in October celebrated $407.6 million in total investment and approximately 250 full-time jobs across a two-phase expansion. The company put the finishing touches on phase I of the project with a ribbon-cutting ceremony while simultaneously breaking ground on phase II. The initial expansion will increase the facility’s recycling and new ingot casting capabilities (the operation already accounts for around 45 percent of North American aluminum beverage can production) while work is currently underway to prepare the plant for the manufacture of thicker-gauge aluminum for products such as automotive sheet.
The final major project of the year was energy related. EnerBlu, a high-power energy storage provider, will invest more than $400 million and add nearly 1,000 jobs to two Kentucky communities, Pikeville and Lexington. EnerBlu will construct a one million-square-foot, high-tech facility in Pikeville to manufacture lithium-titanate (LTO) batteries, called EnerBlu Advanced Energy Storage Units. The batteries will power transit busses, commercial trucks, military vehicles and other equipment. Construction is scheduled to start in mid-2018 and the facility’s opening is planned for 2020. EnerBlu’s headquarters will be located in Lexington.
“We are excited that EnerBlu has chosen Kentucky as home for its headquarters, research and development facility, and for the first Lithium Titanate battery facility in the United States,” Governor Matt Bevin said. “EnerBlu will help power our nation’s transportation and defense industries, while providing job opportunities that will harness the highly-skilled workforce of Eastern Kentucky.”
From logistics to automotive to primary metals and beyond, Kentucky has shown an ability to attract major investments from a wide range of industries. After a record-breaking year that raised the standard of what it means to do business in Kentucky, only one question remains. What’s next?
Visit http://www.expansionsolutionsmagazine.com/kentucky_ed for local economic development office directory listings.
