Monday, November 16, 2009

Aluminum producers seek signature industry

The Greater Owensboro Economic Development Corp. and Northwest Kentucky Forward, an economic alliance of Henderson, McLean, Union and Webster counties, have joined with area aluminum producers to form the Kentucky Aluminum Network.

"I think it has the potential to become a statewide organization," Mike Baker, Hancock County's economic development director, said last week. "When you look at the footprint aluminum has here in Kentucky, it definitely has the potential."

Baker retired in December as general manager of the Aleris International plant in Hancock County after 25 years in the aluminum industry.

"We want to raise the awareness of the people and especially the elected officials," he said. "There are 120 aluminum and aluminum-related facilities in 53 cities in Kentucky. Most people readily acknowledge the horse and bourbon industries as signature industries. We want to get aluminum placed in that category."

The Kentucky Cabinet for Economic Development says, "As measured by the value of shipments, Kentucky ranks as the number one state in the primary aluminum industry."

Kentucky's advantages, the cabinet says in a recent report, include low utility cost, a central location, a quality work force, ports along the Ohio and Mississippi rivers and a significant presence of the automotive industry.

The report says:

* There are 120 aluminum-related facilities with 14,771 employees in Kentucky.

* There are 9,244 primary aluminum industry employees in Kentucky.

* Primary aluminum shipments totaled more than $4.3 billion in 2005.

* In 2007, the median wage for primary metal industry employees in Kentucky was $52,336 a year and $38,983 for the fabricated metal industry.

* Gibbs Die Casting in Henderson is one of the largest aluminum employers in Kentucky with 800 workers.

* Alcan Ingot in Henderson and Century Aluminum of Kentucky in Hawesville are two of 14 active aluminum smelters in the U.S.

* Century Aluminum and Alcan Ingot combined have a production capacity representing around 16 percent of active smelter production capacity in the U.S.

* The Owensboro Riverport is one of only two licensed warehouses approved by the New York Mercantile Exchange to serve as the delivery point of primary aluminum traded on its COMEX Division aluminum futures contract.

"We want to get out in front of state leaders with this," said Nick Brake, president of the Greater Owensboro EDC. "We want to get as many members as possible before the legislature convenes in January. We'll be recruiting members from across Kentucky."

KAN, he said, is a nonprofit membership organization for producers.

"A lot of the (aluminum) facilities in this area are around 40 years old," Brake said. "A lot of the work force has been there that long. They're going to be needing fresh talent in a few years."

"The facilities' infrastructure is one of the biggest threats," Baker said.

When companies have limited dollars for capital expenses, he said, they find themselves having to decide whether to invest in new technology or renovate older plants.

"We need to raise awareness of aluminum's importance to Kentucky," Baker said. "It's a huge part of the economic engine in Hancock County. When they're running at capacity, the plants here employ more than 2,000 people.

"The area between Hancock and Henderson counties has more than 30 plants and more than 5,000 aluminum jobs with a $290 million payroll," he said.

KAN's goal, Baker said, "is to bring producers together with customers and suppliers. We want to have a unified voice when we look at the threats to the industry. We need cost-effective energy."

Baker said most aluminum plants aren't visible from Kentucky's major highways.

"Aluminum casts a long shadow in Kentucky," he said. "The plants are out there, you just don't see them from the main roads."

Keith Lawrence, 691-7301,