Global Companies Feel at Home in Kentucky
In the race for foreign investment, Kentucky set a strong, early pace and remains a favorite.
More than 400 foreign companies have made direct investment and employ more than 75,000 people in the commonwealth, according to a January 2009 Kentucky Cabinet for Economic Development Report.
International Business Impact on Kentucky
In the last five years alone, foreign companies made $5.1 billion in capital investments and created just under 16,100 full-time jobs in Kentucky.
The Bluegrass State has nearly 160 operations owned by Japanese firms, with the investment spread among 43 of Kentucky’s 120 counties. The state is home to the largest U.S. investment of a Spanish corporation, North American Stainless, as part of the Acerinox Group, which has a $1.7 billion plant in Ghent.
“Kentucky makes a geographically compelling case when international companies are deciding on the best location for their U.S. facility,” says Larry Hayes, interim secretary of the Kentucky Cabinet for Economic Development. “Kentucky is within 600 miles of two-thirds of the U.S. population; our industrial electricity costs are consistently among the lowest in the nation; and Kentucky’s tax structure is among the most competitive in the region.”
Exports and Manufacturing Companies
On the export side, Kentucky ranks ninth among states in exports per capita, totaling $19 billion in 2008.
Transportation equipment, chemicals, machinery and computer and electronics products are the main exports. The three largest markets for exports are Canada, France and Mexico, respectively.
For European firms with Kentucky operations, the euro’s strength makes expansions more cost effective. Messier-Bugatti USA, maker of wheels, brakes and other components in aircraft-braking systems, finished an expansion in 2008 that doubled the size of its original plant in Boone County.
“Northern Kentucky is fairly advantageous in respect to the manufacturing base that is here,” says Andy Short, vice president of carbon operations at Messier-Bugatti USA. “The supplies we would need were here. For transportation purposes, it is a fairly central location, regardless of where our product was going.” Messier-Bugatti has a 10-year track record in Kentucky.
Mazak Corp., the first Japanese manufacturer in the state, goes back four decades. It is the North American arm of Yamazaki Mazak Corp., a major global player in the production of machining tools.
President Brian Papke says the Florence plant has expanded “at least 14 times” and now employs about 600. The total campus is 600,000 square feet and serves the medical instrument, aerospace, automotive and oil-service sectors as well as small shops that make precision metal parts.
The company picked Northern Kentucky because proximity to Cincinnati suggested a solid manufacturing foundation, quick access to its customer base, ease of travel with a nearby international airport and potential talent available from regional universities.
“All of those things did come true,” Papke says. “Kentucky is still a good place for us to be.”