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KENTUCKY
From Site Selection magazine, May 2024
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How Factories Are Changing in Kentucky

Hint: They’re getting cleaner, greener and bigger.

KENTUCKY
Blink 2022 at Hotel Covington in Covington, Kentucky.
Courtesy of BE NKY Growth Partnership

by Ron Starner
D

rive 30 miles east of Louisville on Interstate 64 to Shelbyville, and you’ll find two industrial projects that reveal just how much Kentucky has changed over the years.

In the middle of the American Saddlebred Capital of the World, two new factories employing advanced manufacturing technology are about to get even cleaner and greener, thanks to a helping hand from Uncle Sam.

Wieland North America Recycling and Diageo Americas Supply Inc. qualified to receive funds from the U.S. Department of Energy for decarbonization projects at their plants in Shelbyville, Gov. Andy Beshear announced on March 25.

Wieland, which is building a copper scrap metal recycling plant, will receive $270 million from DOE to reduce carbon emissions and put the plant in line to be the world’s cleanest copper recycler. Diageo, which operates the Bulleit Distillery in Shelbyville, is getting $75 million from DOE to replace natural gas-fired heat with Rondo Heat Batteries, powered by onsite renewable energy and electric boilers, at sites in Shelbyville and Plainfield, Illinois.

Brad Thomas, economic development manager for Kentucky’s Touchstone Energy Cooperatives, worked with both firms to help them earn DOE grants. “We worked with these two projects closely,” he says. “Diageo has a carbon-neutral distillery in Lebanon, Kentucky. They are transitioning from natural gas to electric boilers in Shelbyville. They are the world’s largest distiller and the first in the world to build a carbon-neutral distillery.”

Wieland is one of the world’s largest copper producers. “They are decarbonizing their copper recycling center,” says Thomas. “This is their first recycling center in North America. Copper processed here will be used in electric vehicles and electronic devices. They are creating 200 jobs with this investment.”

Thomas adds, “We’ve been working with Diageo and Wieland behind the scenes for quite some time to bring these carbon-neutral developments to their sites. Our teams have been working hard on this. Most people do not think of renewable energy and carbon-neutral projects when they think of Kentucky, but we have a track record of doing this.”

Diageo and Wieland have company. Three other planned Kentucky projects qualified for DOE grants. According to Gov. Beshear, the other winners are:

Century Aluminum Co., which plans to potentially build the first new U.S. primary aluminum smelter in 45 years in northeastern Kentucky. If built, the plant would be the first green aluminum smelter and the largest investment on record in Eastern Kentucky, according to Beshear. An estimated 5,500 construction jobs and around 1,000 permanent jobs would be created by the project. Century would receive $500 million from the Bipartisan Infrastructure Law and the Inflation Reduction Act.

ISP Chemicals LLC, which currently is in talks to build a chemical production electrification and heat storage project at the firm’s Calvert City plant. Project investment is about $70 million. ISP would receive $35.2 million from DOE.

Rye Development, which plans to build a $1.3 billion coal-to-pumped storage hydropower facility in Bell County, creating 1,500 construction jobs and 30 operations jobs. Rye would receive $81 million from DOE.

If all of these plants are built, federal grants totaling $961 would go toward making these facilities run on cleaner energy and reducing their carbon footprint. Beshear said that is the Kentucky he wants to build.

Ovation SkylineOvation project in Northern Kentucky. 
Courtesy of BE NKY Growth Partnership

“We are building that better Kentucky we have all dreamed of,” Beshear said. “Thousands of good jobs and billions of dollars ion economic investments are planned – and we are announcing what could be the two largest projects ever in Eastern Kentucky, and possibly the largest project in Shelby County.”

The Future is Now in Kentucky

Thomas says investments like these are no longer an aberration. “We are seeing a lot of projects taking a look at Kentucky,” he says. “It is about much more than assembling acreage. Companies need sites with the right infrastructure. We just got funding from the General Assembly to buy a 1,490-acre site in Mount Vernon in Rockcastle County. This will be one of the premier megasites in the country. It is just four miles from I-75. It is in an ARC (Appalachian Regional Commission) county south of Richmond in southeast Kentucky.”

While the Kentucky Product Development Initiative (KPDI) was recently awarded an additional $100 million for site development, Thomas says this new megasite funding did not come through KPDI. “This was a direct appropriation from the General Assembly,” he notes. “They set aside $62 million for this site.”

Since the start of 2015, “we have seen a 44% increase in our industrial load. We are looking at over 18,000 jobs created in rural Kentucky over the last nine-plus years. We are close to $13 billion in capital investment.”

Lee Crume, president and CEO of BE NKY Growth Partnership, has seen comparable growth in his tri-county region of Northern Kentucky, part of the Cincinnati, Ohio, metropolitan area. 

“We have a $6 billion mile that includes the $1 billion Ovation project, a gigantic mixed-use development that will remake the Cincinnati skyline,” he says. “The bridge connecting Newport with Covington is being replaced at a cost of about $100 million; and the old IRS site of 25 acres is being redeveloped to include infrastructure, a law school for Northern Kentucky University, and a medical school for the University of Kentucky. That is another $135 million.”

The region’s biggest project is the $3.6 billion Brent Spence Companion Bridge spanning the Ohio River along I-71 and I-75. “That bridge carries 2% of the nation’s GDP every day,” says Crume. “Also, North American Properties is investing $100 million into the Newport on the Levee project.”

The Amazon Prime Air Hub at the Cincinnati/Northern Kentucky International Airport (CVG) in Boone County is growing as well, says Crume. “Amazon opened almost three years ago. They are fully up to speed now. They have long-term plans to more than double the size of that facility. It is the global headquarters of Amazon’s air operations.”

DHL, meanwhile, plans to build a $135 million MRO facility at its own CVG hub, adds Crume. “And FEAM Aero is partnering with Epic to build and open a new MRO training center at the airport.”

Water, Water Everywhere

Roxann Fry, lead economic development project manager for LG&E and KU Energy in Louisville, says, “Kentucky has set the stage for companies to be successful. People know us for our logistical advantages including our roads, railways, rivers and routers. We have done well at overcoming preconceived notions, but we don’t tell our story enough.”

Fry says that as most of the country struggles to keep up with surging power demand, Kentucky remains in good shape. “We are now being seen as a state for energy,” she says. “We are well-connected to the grid. We have the ability to build capacity. Ford Blue Oval in Glendale was a great example. We cover almost the entire state. We serve customers from the far west to the far east. We serve the more populated areas.”

Lately, that means more interest from prospective data center developers. “We get a call a week asking about sites for data centers,” Fry says. “We talk to all the big data center companies, and we talk to developers a lot. We are a fully integrated power company. We control our grid. Right now, we’re trying to identify the right pieces of land.”

Other growth sectors to watch, says Fry, are the electric vehicle battery supply chain, food processing and distillers. All three are poised to grow even more in the state, she notes, adding, “We have great water everywhere in Kentucky, and we are focused on providing clean, sustainable power for our growing customer base.” 

Ron Starner
Executive Vice President of Conway, Inc.

Ron Starner

Ron Starner is Executive Vice President of Conway Data, Inc. He has been with Conway Data for 22 years and serves as a writer and editor for both Site Selection and the company's Custom Content publishing division. His Twitter handle is @RonStarner.

  



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