A Bevy of New Business in the Bluegrass State

Gov. Steve Beshear’s team has been outpacing the field with bold strides in economic development. From its traditional whiskey to advanced batteries and nanoneedles, Kentucky is racing ahead with an incredibly diverse blend of job-creating enterprises.

Kentucky is well known for its lush, blue-green pastures roamed by sleek thoroughbreds, and some of the smoothest whiskey on the planet.

But when it comes to economic development, the Bluegrass State rapidly is expanding its horizons into a wide range of job-creating sectors. Since the beginning of the year, despite the global economic downturn, the pace of activity actually seems to be increasing.

Perhaps the most significant developments have centered on Kentucky’s emergence as a national hub for the development of advanced transportation batteries. This was one of the goals embodied by the strategy set forth by Gov. Steve Beshear when he unveiled a 150-page plan called Intelligent Energy Choices for Kentucky’s Future.

” Kentucky can be a national leader in energy technology and production,” Gov. Beshear declared. ” We can help the country move toward greater energy self-reliance. I intend to put us on such a path.”

Beshear’s plan merges the development of new energy resources with environmental protection. ” For Kentucky to be a national leader, we must fully integrate the development of our energy resources with our mission to protect the environment,” the governor said. ” The seven strategies of my energy plan, when implemented, will restructure our energy portfolio in such a way that we can use energy in its broadest sense—as a tool for economic development and preserving our environment—which Kentucky desperately needs.”

Beshear’s blueprint will create nearly 600 jobs by increasing efficiency and renewable energy efforts in schools, farms, homes, government buildings and private sector initiatives throughout the Commonwealth. These projects will be funded by a $52.5-million allocation Kentucky is receiving in federal stimulus funds under the American Recovery and Reinvestment Act (ARRA). The funds will be utilized over the next three years, pending approval by the U.S. Department of Energy in the next several months.

” The programs that will receive the funding will have a wide-ranging and positive impact on the Commonwealth both immediately and for years to come,” Gov. Beshear said in announcing the energy blueprint. ” These programs are designed to support Kentucky’s strategy for energy independence [and] position Kentucky as a national leader in production, conservation and efficiency efforts.”

Beshear’s comprehensive energy plan calls for significant reductions in greenhouse gas emissions while creating some 40,000 jobs tied to energy production and conservation between now and 2025.

Specifics of the state’s proposed stimulus funding plan include:

  • Purchasing and installing energy-efficient or renewable-energy equipment and materials for the retrofit of an advanced battery strategic planning facility.
  • Dramatically improving energy efficiency in government buildings (by installing an Energy Management System).
  • Establishing the Kentucky Green Bank, a revolving loan fund for energy efficiency improvements.
  • Expanding an industrial/commercial sustainability program modeled after a U.S. Department of Energy program to increase the number of onsite energy efficiency assessments at industrial and commercial facilities.
  • Supporting a Governor’s Office of Agriculture Policy initiative for a new on-farm energy efficiency and production program that will provide grants to farmers for energy assessments and for technical assistance in applying for USDA grants, thus creating increased funding opportunities for Kentucky farmers.
  • Exploring the development of smart-grid concepts and their application in the state, and establishing a Home Performance with Energy Star program, which will provide energy assessments and improvement recommendations in existing homes.
  • Expanding the Kentucky Energy Efficiency program in public schools, as well as the Green and Healthy Schools program, to help Kentucky schools better manage energy use, while also educating students, faculty and staff on efficiency and conservation efforts.

” Strengthening these programs will support approximately 150 new and retained jobs through a system of local energy managers, regional coordinators, technicians and engineers that will be available to guide school districts through the process of implementing energy efficiency programs,” said Len Peters, secretary of Kentucky’s Energy and Environment Cabinet. ” These programs help us reach our goals of increasing energy efficiency and significantly reducing our carbon output over the next 15 years.” Upon DOE approval, Kentucky will be authorized to spend up to 50 percent of the total allocation with the remaining balance being authorized based on demonstrated performance. The ARRA funds must be expended by 2012.

A National Center for Advanced Batteries

Gov. Beshear recently announced that the state has been selected as the site for a proposed domestic battery manufacturing and headquarters facility. The National Alliance for Advanced Transportation Batteries (NAATBatt) chose Hardin County’s Glendale as the home for a potential investment of $600-million to develop an advanced manufacturing facility for lithium-ion battery cells. Kentucky was selected over Texas, Illinois, Kansas, Missouri, New York, Pennsylvania and South Carolina.

NAATBatt, a not-for-profit industry consortium of more than 50 corporations, associations and research institutions, aims to make the United States a world leader in the manufacture of advanced lithium-ion or Li-Ion battery cells for transportation applications.

” This [puts] Kentucky in a prime position to be the country’s leading manufacturer of the clean-energy cars of the future,” Gov. Beshear said. ” Kentucky’s strong roots in the automotive industry, as well as its close proximity to suppliers, manufacturers and researchers, make it a natural fit for production of the next generation of hybrid technology batteries.”

The 1,551-acre Glendale site, which sits adjacent to Interstate 65 and the CSX rail line, will be submitted as part of NAATBatt’s application to the U.S. Department of Energy. Under the federal stimulus plan, the Obama administration has set aside $2 billion for electric drive vehicle battery and component manufacturing projects.

If successful in securing federal funding, NAATBatt would establish a manufacturing campus in Glendale, which would consist of a headquarters, a manufacturing facility used to refine products and production processes, and a larger operation designed for mass battery manufacturing. Total square footage of the campus is expected to reach up to 1 million square feet.

The lithium battery manufacturing operation could create as many as 2,000 new full-time jobs with an average annual wage exceeding $40,000. An estimated additional 1,500 construction-related jobs also would be created for a period of 12 to 18 months.

A week before the announcement of the Glendale selection, Gov. Beshear unveiled a partnership between the state, the University of Kentucky, the University of Louisville, and Argonne National Lab that initially will focus on lithium-ion battery manufacturing research and development.

” The Kentucky-Argonne partnership will help support President Obama’s goal to have one million Plug-in Hybrid Electric Vehicles on the road by 2015,” Argonne Director Robert Rosner said. ” It will help to bridge the gap between research and commercialization by facilitating the development and deployment of advanced manufacturing processes for lithium-ion and other advanced batteries.”

” Central Kentucky is an ideal location for a national Battery Manufacturing Research and Development Center,” said Larry Hayes, secretary of the Governor’s executive cabinet and interim secretary for economic development.

” Not only does Kentucky have an experienced auto-industry related workforce, but the region is within 500 miles of more than 4,800 auto-related vehicle manufacturers, including 69 vehicle assembly plants.”

From Nanoneedles to Peanut Butter and Jelly

Kentucky also is spurring cutting-edge development through the High-Tech Investment Pool administered by the Cabinet for Economic Development. The investment pool promotes research-intensive companies and projects with the goal of creating clusters of innovation-driven industries in the state.

NaugaNeedles, LLC in Louisville recently was awarded up to $120,000 for development of the company’s proprietary nanofabrication technology to grow flexible, constant-diameter, silver-gallium nanoneedles that can be used for enhanced mechanical, electrical, and electrochemical sensing and manipulation at cellular and molecular levels. Based on this technology, the company has six categories of products that are fully developed and ready for commercialization.

A client of the Louisville Innovation and Commercialization Center, NaugaNeedles anticipates it will create a minimum of seven full-time, high-tech and technical support jobs for Kentucky residents by 2012, paying an average annual salary of approximately $64,000, exclusive of benefits.

Not all of the new business initiatives in Kentucky are high-technology oriented. Some of the them are familiar and rather tasty.

J.M. Smucker LLC recently announced it will add a new production line to its Scottsville plant, investing $3 million dollars and creating an additional 25 jobs in the community. The Kentucky Economic Development Finance Authority approved tax incentives for the project up to $550,000 under the Kentucky Rural Economic Development Act, an incentive program designed to increase manufacturing employment in the state.

Currently, 288 employees work at the Scottsville plant, which makes Smucker’s Uncrustables frozen peanut butter and jelly sandwiches. The additional line will bring a new ” grab and go” waffle product to the plant.

Kentucky also is making sure there will be something nice to wash down all that peanut butter and jelly. Last month, Gov. Beshear and Sazerac North America announced the expansion of two Kentucky distilling operations, located in Frankfort and Owensboro. The expansions represent a combined investment of nearly $28 million and will result in approximately 89 new full-time jobs in the Commonwealth.

In an effort to create efficiencies, increase utilizations and become globally competitive, Sazerac is expanding the Buffalo Trace Distillery in Frankfort. An estimated $9 million in additional machinery and equipment will be purchased, resulting in the addition of 39 new jobs to the current workforce of 270.

Sazerac, which recently purchased a significant portion of Constellation Spirits, Inc., also will add 300,000 square feet to its Owensboro facility at an estimated cost of $10.5 million. The expansion will require the purchase of $8.25 million in new machinery and equipment. Approximately 50 new jobs will result from the project. Current employment at the facility totals 188.

Buffalo Trace Distillery, Inc. in Frankfort and Sazerac North America in Owensboro were approved for tax benefits under the Kentucky Industrial Development Act for up to $3.28 million by the Kentucky Economic Development Finance Authority (KEDFA). KEDFA also preliminarily approved Sazerac for up to $1.41 million in tax incentives under the Kentucky Jobs Development Act for the possible location of certain administrative offices in Louisville.

If successful in bringing the new location to Kentucky, the project would consist of a 10,000 square-foot facility and eventually 51 new full-time employment opportunities.

Thoroughbred of Call Centers Up and Running

Another recent success story in Kentucky’s efforts to diversify its economic base can be found in Paducah, where the Thoroughbred Research Group, the City of Paducah, McCracken County, and the Greater Paducah Economic Development Council came together to establish a call center operation in the heart of the city.

Louisville-based Thoroughbred Research Group (formerly known as Wilkerson & Associates) is a survey research firm that operates four other call centers in the state (including operations in Henderson, Hopkinsville and Madisonville). Current clients include Duke Energy, Gannett Newspapers, Columbia Gas, the National Football League, and the Center for Medicaid and Medicare Services of the federal government.

CEO Steve Alsbury projects employment of 100 and 15 percent annual growth within the year for the operation. ” This call center operation in Paducah will improve our overall efficiency,” he said. ” Paducah works because of the quality of employees we are attracting, the central time zone location, and the location of our facility in the Village Business Center.”

Mayor Bill Paxton welcomed the new project to Paducah by saying that ” Thoroughbred Research Group is an excellent example of a Kentucky firm continuing on the path of success. The decision by [Thoroughbred Research Group] is evidence of the importance of our large labor pool and the added advantage we offer due to our central location.”

McCracken County Judge Executive Van Newberry added, ” Thoroughbred Research Group is a Kentucky-based company servicing national accounts and Fortune 500 companies. The firm had several options for this call center. In the final analysis, Thoroughbred Research Group [decided that] Paducah/McCracken County offers tremendous resources for this growing company.”

Value-add automotive manufacturing services

As he drives to create new industries in Kentucky, Gov. Beshear isn’t overlooking the expansion of established sectors. Beshear and Economic Development Cabinet Interim Secretary Larry Hayes recently announced that TMS Automotive, LLC will establish a new operation in Bowling Green. The start-up automotive company will offer value-added manufacturing to customers in the region, including Metalforming and Dana Corporation.

” The start-up of TMS Automotive is a wonderful addition to the Bowling Green community and the entire Commonwealth,” said Gov. Beshear. ” Kentucky is well-known for its strong automotive roots and TMS Automotive is a perfect fit to our corporate landscape. We look forward to continuing our partnership as the company grows and prospers here in south central Kentucky.”

Approximately 35 new jobs will result with the location of TMS Automotive, whose process includes removing unwanted residue from metal, acquired through stamping, then applying a rust-prevention coating. The project will entail a capital investment of $2.17 million.

” TMS is eager to locate in Bowling Green-Warren County because of the strong state and community support we have received during the decision-making process,” said Michael R. Hall, president of TMS Automotive, LLC. ” Our location here will allow us to best serve our automotive industry partners located in the area.”

The Kentucky Economic Development Finance Authority preliminarily approved TMS Automotive for tax benefits up to $260,000 under the Kentucky Industrial Development Act.

” We’re very excited to watch TMS Automotive’s growth in Bowling Green,” said Bowling Green Mayor Elaine Walker. ” By locating here, this company will create 35 new jobs within two years—jobs that will support the local automotive industry.”

” It’s another great day in south central Kentucky when we can make an economic development announcement such as this,” said County Judge Executive Michael Buchanon. ” By creating new jobs and nearly $2.2 million in capital investment, TMS Automotive is solidifying its commitment to economic growth in our region.”

From thoroughbred horses to thoroughbred vehicle power systems, from comfort food to even more comfortable bourbon, Kentucky is merging the best of the last century with the opportunities of the emerging era, and doing it in style.