INTERNATIONAL INVESTMENT
From the Kentucky Economic Development Guide 2021
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At Home Abroad

Why international firms like doing business in Kentucky.

INTERNATIONAL INVESTMENT
Louisville skyline
Photo: Getty Images

by ADAM BRUNS

A global pandemic may have ground international travel to a halt for long stretches of 2020, but one thing it did not abate was foreign direct investment in Kentucky.

Internationally owned companies last year announced 41 projects totaling over $580 million in planned investment and creating 1,505 planned new jobs. Companies from 13 nations were responsible for these investments, with firms from Asia and Europe taking the lead.

Japan once again was the clear leader in FDI in 2020, as Japanese-owned firms announced 16 projects totaling $190.4 million in capital investment and generating 476 new jobs. Since the start of 2014, companies based in Japan have announced 203 investment projects in Kentucky, totaling $5.64 billion in investment and 7,871 new jobs.

That wave of investment continued into 2021, as Japanese-owned Hitachi announced a significant expansion in the automotive manufacturing sector in Berea. On Jan. 14, Hitachi Automotive Electric Motor Systems America Inc. announced plans to establish a 200-job operation in Berea to make motors for electric vehicles. The operation currently employs about 20 workers and is expected to grow to 200 by 2023.

Established in Kentucky in March 2020, Hitachi Automotive Electric Motor Systems America will supply motors on a Tier 1 basis to Honda of America Mfg. Inc., which operates a major automotive assembly plant in Marysville, Ohio.

Hitachi operates four plants in Kentucky, including two in Berea making brake and suspension components, as well as manufacturing and warehousing facilities in Harrodsburg, producing electronic control systems, actuators and fuel system components.

Brandon Mattingly of the Kentucky Cabinet for Economic Development says Kentucky reaped an array of FDI in 2020 across multiple sectors. GE Appliances, owned by a Chinese company, announced a $52 million expansion that adds 250 jobs in Louisville; Tokyo Carbon GE will produce graphite electrodes for the steel sector in Western Kentucky next to the Mississippi River; and Danieli is creating 53 jobs in Ashland as they refurbish a former AK Steel mill.

“There is also Nova Steel, a Canadian company, that is creating 100 jobs at a steel mill in Bowling Green,” said Mattingly. “Canada is a prime source of FDI.”

Indeed, Canadian firms announced four projects in Kentucky in 2020, totaling $90 million in investment and creating 221 jobs in the commonwealth.

Other nations exporting significant capital to Kentucky last year included China (three projects totaling $165 million), Germany (six deals totaling $91.9 million), and Italy (one project totaling $12.25 million).

Since the beginning of 2014, companies from 30 nations have announced a total of 480 investment projects in Kentucky. Cumulatively, these foreign investors have brought more than $12 billion in investment capital to the commonwealth.

In addition to the usual sources of FDI — places like Japan, China, Germany and Canada — Kentucky has garnered large investments from firms in places like Luxembourg, Bermuda, New Zealand, South Africa and Thailand.

In 2020, Kentucky secured a $6.5 million project from Bermuda, a $600,000 investment from Luxembourg, a $5.2 million project from Austria, and a $3.13 million deal from Sweden.

“Henkel is a German company that announced a $70 million investment in Bowling Green,” said Mattingly. “Our logistics prowess is a big factor in global companies locating here.”


“Japan, China, Germany and Canada are the big four investors in Kentucky right now.” 
— Brandon Mattingly, Communications Specialist, Kentucky Cabinet for Economic Development

The presence of major international shipping hubs for UPS, DHL and Amazon makes logistics a snap for international investors, said Mattingly. Other factors luring FDI to Kentucky, he adds, include low-cost industrial electric power, Kentucky’s central geographic location, and the state’s overall climate of business-friendliness.

“Japan, China, Germany and Canada are the big four investors in Kentucky right now,” said Mattingly, “but once we get on the other side of the pandemic, we expect to see a lot more investment from other countries as well.”

India, for example, has brought eight investment deals to Kentucky since 2014. France has brought 26, the Netherlands has brought seven, and Italy has brought 15.

“We have international offices in Tokyo and Hamburg, and we have seen our relationship with Japan blossom over the decades,” noted Mattingly. The presence of a major Toyota Motor Manufacturing assembly plant in Georgetown is a huge driver, he added.

“The automotive industry is moving toward electric vehicles, and that will continue to grow our relationship with Japan,” he said. “We’re absolutely well-positioned to land additional electric-vehicle-related companies. Kentucky has been a leader in the automotive sector for a long time, and we want to be where the future of the industry is going.”

 

Ron Starner
Executive Vice President of Conway, Inc.

Ron Starner

Ron Starner is Executive Vice President of Conway Inc. He has been with Conway for 20 years and serves as editor of the TrustBelt Report and lead organizer of the annual TrustBelt Conference. He also writes extensively for Site Selection and Conway's Custom Content Publishing Division. His Twitter handle is @RonStarner.

  





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