July 10, 2017

Rolling hard: Kentucky's primary metals industry bulks up as demand soars



Already a pillar industry in Kentucky employing more than 27,000 people, the primary metals sector saw significant announcements of new investments and additional jobs planned during the first half of the year.

The industry - which includes metals producers and related downstream processing companies – saw more than $1.77 billion in new-location and expansion projects announced. Those are expected to create more than 1,000 new jobs in the coming years.

Those new projects – mainly in steel and aluminum production – stretch across the state.

Near Kentucky’s southern border, Logan Aluminum Inc.’s massive mill in Logan County will expand with a new cold-rolling line. The $125 million investment announced by Louisville-based Tri-Arrows Aluminum in May is expected to create 60 jobs at the mill near Russellville. That came atop the 190-job, $250 million Phase I expansion at Logan, announced in 2015 and currently under construction. The projects are preparing Logan to make automotive-grade flat-rolled sheet while continuing to service the beverage can market.

Braidy Industries Inc. rocked the state with an announcement of its planned $1.3 billion rolling mill in northeast Kentucky’s Greenup County. The 2.5 million square-foot rolling mill near the town of South Shore is expected to create 550 new jobs, prompting Gov. Matt Bevin to call the project a “turning point in bringing economic vitality to Eastern Kentucky.”

Construction is expected to begin in early 2018, with production beginning in 2020. Initially, the facility will produce about 370,000 tons of aluminum sheet and plate for the automotive, aerospace and defense industries.

The Cabinet for Economic Development counts 187 aluminum-related facilities in the commonwealth, which employ more than 20,000 people full-time. The sector includes smelters, recyclers, rolling mills, injection molders, extruders, die-casters, machine shops and companies manufacturing a galaxy of finished products including Reynolds Consumer Products in Louisville, which makes the world’s supply of aluminum foil.

In steel and iron production, Nucor Steel Gallatin, a mainstay employer on Kentucky’s northern border, recently announced it will build a new galvanizing line at its mill in Ghent with an estimated $176 million investment creating 75 full-time jobs. Nucor Steel Gallatin produces rolled steel sheet used in various automotive applications, agricultural equipment, energy and other consumer products.

The new coating line will include in-line pickling capability. While the mill’s total annual capacity will remain at about 1.6 million tons, the new line will add value to the mill’s flat-rolled coils, prepping them for more specific and specialized uses. Work to install the coating line could begin in late 2017 or early 2018 with completion targeted in the first half of 2019.

The new line will be able to coat steel sheet up to 72 inches wide, making it the widest hot-rolled galvanizing line in North America. The new line will increase Nucor’s market share of coated steel in the Midwest.

In Northern Kentucky, one of the state’s largest automotive suppliers, Mubea, is expanding its Tailor Rolled Blanks and creating 150 jobs on its campus in Florence. The $73 million project, which began this spring, will add capabilities and capacity with a second cold-rolling rolling line, high-speed presses and other production equipment.

Mubea opened its tailored rolled blank advanced manufacturing facility in 2013, the first of its kind in North America. The plant features an advanced flexible rolling line and two high speed press lines that provide lightweight parts. It can produce blanks that vary in thickness across their span, resulting in less material where weight savings is key and thicker material where strength and structural rigidity is paramount.

Nearly 50 steel-related facilities populate Kentucky, which employ more than 7,300 people.

King Auto

So metals are hot. How did that happen in a state historically known for tobacco, coal, bourbon and thoroughbred horses?

In a word, automotive. While aerospace manufacturing, construction and consumer goods are significant drivers, new demand from the automotive industry propelled the surge in Kentucky’s aluminum industry.

As the federally mandated fuel economy regulations, known as CAFE standards, grow more stringent, automakers are increasingly turning to lighter-weight aluminum and thinner, higher-strength steel for body panels, structural components, mechanical parts and housings.

As well, Kentucky’s broader manufacturing industry – which accounts for more than 12 percent of jobs versus about 8 percent for the nation – use steel and aluminum in significant quantities. By sourcing their metal stock from suppliers nearby, many reduce their costs by cutting shipping.

Similarly, proximity to a customer’s plant, a broader market or to a shipping hub often plays a key role in where metal-intensive manufacturers locates.

The rest of the story

Primary metals industry announcements in the first six months of the year also include:

  • Asahi Bluegrass Forge Corp., in Richmond, is investing $40 million in an expansion and creating 50 new full-time jobs to produce automotive press forgings, gears, bearings and joints.
  • JSB Industrial Solutions is investing $250,000 and creating five jobs for metal can, box and pail production.
  • Bilstein Cold Rolled Steel LP announced a t$2.5 million investment in its production mill in Bowling Green.
  • MSSC announced nearly $12 million expansion of its Hopkinsville facility, which produces automotive and off-road springs and other suspension components. The project is expected to add 42 jobs.
  • Tarter Farm and Ranch Equipment, announced multiple investments in Casey County, including $1.45 million for its corporate headquarters in Dunnville and a combined nearly $21 million in its subsidiaries. They produce metal farm gates and gate components, steel tube production and fabrication, galvanized steel water tanks and other agricultural equipment.
  • Kobe Aluminum Automotive Products LLC announced its seventh expansion, a project that brings its total spending north of $344 million since its 2005 opening in Bowling Green. The latest project, a $51 million, 129-job addition, will add a new melting furnace, forging presses and heat-treatment, casting and machining lines.
  • In central Kentucky, Novelis Corp., which melts used beverage cans and other recycled aluminum scrap to produce ingots, revealed plans for a nearly $2.4 million investment. The Berea facility recycles about 20 of all aluminum cans recycled in the US annually.
  • In West Kentucky, UACJ Whitehall, which makes and assembles precision parts such as sunroof assemblies and structural components, announced a $3.3 million investment to expand operations in Paducah.
  • Toyotomi America Corp., is investing $5.7 million and creating 41 jobs at its plant in Springfield in Washington County. The facility produces automotive stampings, sunroof frames and automotive aftermarket parts.


Why Kentucky?

Kentucky offers an advantage few other states can: location.

The bluegrass state’s automotive supplier network and OEM plants – as well as its proximity to the automotive hotbeds of the Midwest and South – make it a choice location for manufacturing companies such as parts makers, metals producers and stamping-and-welding operations.

Further, Kentucky offers some of the nation’s lowest rates for industrial power — about 20 percent lower than the US average. And the state boasts a robust shipping and distribution industry helping those manufacturers move goods quickly.

Success breeds success, and these factors combine to create a definite momentum. The word is out, and businesses looking to locate metal processing or parts production plants have recognized they can leverage a critical mass of existing companies – both vendors and customers – and increase their chances of sourcing employees with previous experience in the metals industry.

All in all, these are high times for local, regional and statewide economic development leaders.

“In my 24 years of public service, (the Braidy Industries project) is the project I have waited for,” Greenup County Judge-Executive Robert Carpenter said after the $1.3 billion deal was announced in April. “This project will change the entire region going forward.”

Newsletter Signup

Sign up for our bi-monthly newsletter to receive our most current articles by email!

Sign Up!