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FAST LANE - January
2004
Employees said they had no previous knowledge of the company’s plans to close the plant. The Louisville facility, which has operated for more than 40 years, was among several that produced the company’s Lay’s, Ruffles, Doritos, Fritos and Cheetohs brand chips. In addition to closing the Louisville plant, Frito-Lay is also retiring several manufacturing lines at its facilities in Aberdeen, Maryland and Jonesboro, Arkansas. Production from the Louisville facility and the retired lines will be re-directed to “newer and more productive” facilities in Fayetteville, Tennessee; Jonesboro, Arkansas; Lynchburg, Virginia; Charlotte, North Carolina; and Frankfort, Indiana. LEXINGTON
Now, however, the two companies have mutually agreed that the dissolution of the joint venture is more in line with their respective strategic priorities. For McDonald’s, the decision is part of a companywide strategy to significantly narrow its non-McDonald’s brand activity in an effort to “do fewer things better.” As part of that endeavor, the company has agreed to sell Donato’s Pizzeria back to its founder and is discontinuing development of non-McDonald’s brands outside the U.S. It will, however, retain its interest in Chipotle, Boston Market and Pret A Manger in the United States. The company has announced the opening of two new prototype restaurants in Indianapolis and Denver that feature an open kitchen format and exterior and interior décor brand enhancements. Elements of these enhancements will be introduced to existing Fazoli’s units in 2004, providing company and franchise units with facility upgrades. Fazoli’s currently operates in 32 states with a total of 395 company and franchise restaurants. The company employs approximately 600 workers in and around Lexington. FLORENCE Xanodyne Pharmacal has announced plans to join forces with Indianapolis-based Integrity Pharmaceutical Corporation. Both Xanodyne Pharmacal and Integrity Pharmaceutical were founded and launched by the Union Springs, LLC, a private equity group that focuses exclusively on investments in the life-sciences sector. Roger D. Griggs, chairman of Union Springs, will continue in his role as chairman of the board, providing strategic counsel to the new integrated company. The new entity, which will have approximately 150 employees, will operate as Xanodyne Pharmaceuticals, Inc. and will be headquartered in Florence. In addition to higher revenues, Xanodyne Pharmaceuticals benefits from greater sales and marketing muscle enabling the new company to launch new products more effectively. The combined company will have an extensive drug development pipeline and plans to launch a number of new products in the near future. The company also plans to initiate several large clinical studies to support innovative products at earlier stages of development. MUHLENBERG COUNTY The Kentucky State Board on Electric Generation and Transmission Siting has issued an order approving construction of Peabody Energy’s proposed Thoroughbred Energy Campus in Muhlenberg County. Thoroughbred is a planned 1,500-megawatt electric generation facility that will be fueled by six million tons of coal produced each year from a new adjacent underground mine. The plant will begin generating power between 2005 and 2007, providing enough electricity for some 1.5 million households. The facility has been designed to provide low-emissions electricity and Peabody claims that it will be among the cleanest coal-fueled generating stations in the nation. The operation is expected to create approximately 450 permanent jobs and will inject some $100 million each year into the Kentucky economy. Peabody Energy is the world’s largest private-sector coal company, with 2002 sales of 198 million tons of coal and $2.7 billion in revenues. Its coal products fuel more than nine percent of all U.S. electricity generation and more than two percent of worldwide electricity generation. LEXINGTON
BB&T Corporation and the BB&T Charitable Foundation have each pledged $1.25 million to the University of Kentucky’s Gatton College of Business. In addition, BB&T board member C.M. “Bill” Gatton, for whom the college is named, matched the gift, creating a total pledge of $5 million. The BB&T gifts will support a learning laboratory on capitalism, a speaker series, an annual student paper competition, and annual fellowship and research grant awards. The funds also will assist with construction of the college’s new faculty and administrative building, one of four new business and economics buildings the university plans to build. BB&T, the nation’s 11th largest financial holding company with approximately $91 billion in assets, operates more than 1,350 banking offices in 11 states, including Kentucky, and the District of Columbia. BOWLING GREEN Cosma International Group has entered into an agreement to acquire approximately 132 acres in the Kentucky Trimodal Transpark on which to build a new auto parts plant that will supply frames for Ford sport utility vehicles. The $132.5 million facility is expected to employ approximately 300 people with average wages of around $13.50 per hour. LEXINGTON The University of Kentucky has broken ground for the College of Pharmacy’s new Center for Pharmaceutical Science and Technology (CPST) at UK’s Coldstream Research Campus. Construction of the 20,000-square-foot building is scheduled to be completed in the spring of 2005 at an estimated cost of $12 million. When completed, it will be the largest sterile pharmaceutical manufacturing facility in the state and will serve as the cornerstone for additional expansion at Coldstream. Researchers at the new facility will develop and manufacture sterile pharmaceutical products to be used in human clinical research studies, such as vaccines, freeze-dried products and other drugs that can be injected. UK President Lee T. Todd Jr. said the new facility will enhance economic growth in the state by creating jobs and attracting new industries, and is vitally important not only to UK’s Coldstream Research Campus, but to the pharmaceutical industry as well. “The new Center for Pharmaceutical Science and Technology is just the beginning,” said Todd. “The research at this facility will create well-paying, knowledge-based employment for Kentuckians. Locating this state-of-the-art ‘factory of the future’ at Coldstream is visible proof of the institution’s commitment to economic development in the city, region and state.” The UK College of Pharmacy is one of only two colleges in the United States to have a manufacturing facility of this kind. The other is located at the University of Iowa. LOUISVILLE Louisville-based NetGain Technologies has acquired Avow Technology Solutions, an Arkansas company that is the state’s largest information technology provider. The purchase price was not disclosed. NetGain has offices in Louisville, Lexington and Northern Kentucky and is one of the region’s leading technology infrastructure companies. The company has experienced growth of more than 400 percent during the past three years and 55 percent in the past year alone. The company’s acquisition of Avow includes all of its assets, including accounts receivable, contracts and inventory. Avow will function as a subsidiary of NetGain and will continue to operate out of its offices in Little Rock and Fort Smith, Arkansas. NORTHERN KENTUCKY
The chamber’s annual report on industrial growth was based on business activity between September 1, 2002 and August 31, 2003. According to the report, 11 businesses invested some $162 million in equipment, buildings and real estate, creating more than 1,500 new jobs in the region. The majority of those new jobs were created by FedEx, Kroger and UNOVA Industrial Automation, all of which are expanding in the Northern Kentucky area. Other companies that have added employees are: American Power Services, Blue Star, Citigroup, Krauss-Maffei, Lemforder, Mubea, Obara, and Ticona Polymers. STATE Figures recently released by the Kentucky Manufacturing Assistance Center show that the statewide impact of its services equates to more than $9 million in additional earnings for workers, nearly $2 million in new state tax revenues and $5 million in retained state tax revenues. “Manufacturers are at the heart of Kentucky’s economic health, accounting for nearly 30 percent of the gross state product – more than twice the national average,” said KMAC President Lynn Witten. “For Kentucky’s economic well-being, our small- and medium-size manufacturers must have access to cost-effective services that provide them with the innovation, technology, and continuous improvement skills to compete against any company in the world.” SHEPHERDSVILLE
The facility, which is slated to be expanded to 527,000 square feet, will be operated by Reynold’s distribution contractor, Genco Inc. Reynolds is in the process of consolidating its distribution centers. The company previously operated 10 facilities, but plans to soon have only the Shepherdsville center and another on the West Coast. Reynolds officials say the Bullitt County site was selected due to its location and infrastructure. Those characteristics have proven to be attractive to other companies as well. In September, Alliance Entertainment Corp. of Florida and Michigan-based Gordon Food Service both announced plans to establish distribution centers in Bullitt County. Alliance offers an extensive product inventory including CDs, cassettes, videos, DVDs, video games and related accessories and merchandise. Gordon Food Service is the largest, privately held foodservice distributor in North America. Combined, those two companies will bring more than 450 new jobs to the area. STATE The Board of Regents of the Kentucky Community and Technical College System (KCTCS) has approved the consolidation of Elizabethtown Community College and Elizabethtown Technical College into a single institution - Elizabethtown Community and Technical College. Regents also authorized the college to pursue single accreditation under the Commission on Colleges of the Southern Association of Colleges and Schools. “The KCTCS Strategic Plan has established a goal to develop a unified system of comprehensive community and technical colleges,” said Michael B. McCall, KCTCS president. “We are moving aggressively toward attainment of that goal.” The regents also granted approval for a number of new associate in applied science programs in the system. The new programs include:
Since January 1998, the KCTCS Board of Regents has approved more than 1,000 program options that the colleges may offer to students. LOUISVILLE A biologistics firm is one of the latest companies to get a boost from Chrysalis Ventures, a Louisville company that has become a leading source of equity capital for young growth companies in the Southeast and Midwest. Asterand CEO Randal Charlton said the funds will be used to further develop the company’s network of hospital collaborators and enhance its research services. An immediate target, added Charlton, is to increase Asterand’s bank of material and data for research into the genetic basis on diabetes and osteoarthritis. Chrysalis’ co-investors in the financing include Oxford Bioscience Partners of Boston and Fort Washington Capital Partners of Cincinnati, both original investors. New investors joining Chrysalis include Arboretum Ventures of Ann Arbor, Michigan and Apjohn Ventures of Kalamazoo, Michigan. PARIS Monessen Hearth Systems is adding 150,000 square feet to its Paris manufacturing plant, more than doubling its current size. The expansion is slated to be completed by this spring and is expected to add up to 75 new jobs. With the addition of both space and staff, the company anticipates being able to double it production volume from $50 million to $100 million.
OHIO
In announcing the results of the study, Jane Henney, MD, senior vice president and provost for health affairs, said, “In the five years since we first measured the very significant economic influence of the Medical Center, we have experienced phenomenal growth in research funding, as well as expansion of education and patient care programs. The result is the Medical Center is now the leading employer in the region and one of the most powerful economic engines in the Tri-State.” The Medical Center currently employs 16,268.
TENNESSEE Clayton Homes, a manufactured housing company headquartered in Maryville, has announced plans to purchase the assets of a bankrupt competitor for $373 million in cash. Assuming the necessary approvals for the deal go through, Clayton’s acquisition of North Carolina-based Oakwood Homes could catapult the combined entity to the No. 1 spot in the manufactured housing industry. Currently Champion Enterprises and Fleetwood Enterprises hold the No. 1 and No. 2 positions, respectively. The purchase represents a heavy investment in the struggling manufactured housing industry by Berkshire Hathaway, which last year acquired Clayton Homes and is also Oakwood’s single largest unsecured creditor. A previous plan to reorganize Oakwood’s $578 million debt load would have resulted in Berkshire owning some 40 percent of the company. The acquisition will also accelerate Clayton’s plans to expand its headquarters and financial services division, which is expected to add approximately 420 new jobs over the coming two to four years. Clayton officials say they intend to employ a substantial majority of Oakwood’s employees and will continue to operate the company under the Oakwood name.
Business Briefs ASHLAND
BOWLING GREEN
CAMPBELLSVILLE
CARROLL COUNTY
EASTERN KENTUCKY
EDMONSON COUNTY
FRANKLIN
GLASGOW
GRAVES COUNTY
HENDERSON
JEFFERSONTOWN
LEXINGTON
LIBERTY
LOUISVILLE
MAYFIELD
MAYSVILLE
OWENSBORO
RICHMOND
SCOTT COUNTY
WOODFORD COUNTY
STATE
INDIANA
OHIO
TENNESSEE
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Copyright 1996-2004, by Kentucky Business Online. All rights reserved. Editorial content
is copyright 2004, Lane Communications Group The Lane Report is a trademark of Lane Communications Group. All other trademarks are the property of their respective owners. |
PepsiCo Inc. has closed its Frito-Lay plant in Louisville as part of a companywide reorganization, leaving 326 workers without jobs.
Lexington-based Fazoli’s has signed a letter of intent to end the joint venture it formed with fast-food giant McDonald’s in December 2002. That agreement called for McDonald’s to develop 20 to 30 Fazoli’s restaurants in three U.S. markets and gave the Illinois-based chain the option to purchase the entire company at a later date. 
Fazoli’s officials say their company is now in a much stronger position to proceed with its menu and brand enhancement initiatives for new growth. 
The new company will focus on the specialty medicine fields of pain management, bleeding disorders, urology and women’s health. 
Students in the University of Kentucky Gatton College of Business and Economics soon will enjoy the benefits of new facilities, research grants, and an annual speaker series through the assistance of $5 million in pledges.
Cosma is part of Magna International, Inc., a Canadian company that is a leading global supplier of technologically advanced automotive systems, components, and complete modules. The company employs approximately 72,000 people at 201 manufacturing divisions and 48 product development and engineering centers throughout North and South America, Mexico, Europe and Asia. 
Avow, which has 40 employees and more than $12 million in annual revenue, specializes in subscription-based computer services, marketed under the Technology OneSource brand. The Technology OneSource program allows customers to have systems installed with all-inclusive services for a fixed monthly investment. 
The latest statistics from the Northern Kentucky Chamber of Commerce indicate that more new jobs were created last year in Northern Kentucky than in any year since 1996. 
KMAC is a private, not-for-profit organization that was created to help Kentucky manufacturers become more competitive by providing services to increase their technical capabilities, improve their production methods, and advance their business practices. It is affiliated with the Kentucky Cabinet for Economic Development, the Kentucky Office for the New Economy, and the National Institute of Standards & Technology’s Manufacturing Extension Partnership (MEP) program. The organization is headquartered in Lexington, with offices in Bowling Green on the campus of WKU; in Louisville on the Shelby Campus of U of L; and in Morehead on the campus of Morehead State University.
Reynolds Food Packaging has leased a 427,500-square-foot facility in the Cedar Grove Business Park for its newest distribution center.
Detroit-based Asterand Inc. operates one of the world’s largest human tissue banks for genomic and proteomic research, which provides the materials and information needed to conduct research on common disease targets. The company collects material from a worldwide network of donor sites and has an extensive collection of material and data covering over 150 major disease targets, including many types of cancer, cardiovascular disease, diabetes, rheumatoid arthritis and neurological conditions such as Alzheimer’s, schizophrenia and bipolar disease.
The expansion has been launched in order to accommodate the consolidation of Monessen’s Paris operation with that of its plant in Athens, Alabama. Monessen manufactures a broad line of hearth products that utilize various venting technologies. 
A recent study indicates that the University of Cincinnati Medical Center has a economic impact of $3.59 billion on metropolitan Cincinnati the surrounding three-state region. Furthermore, the study projects that figure to rise to $4.19 billion by 2006.
The Werner Ladder Company is closing its Carroll County plant, saying the market for wooden ladders has diminished to the point that it is no longer viable to continue operating the plant. The Pennsylvania-based company, which employs a total of 122 workers at the Kentucky Ladder plant, plans to close the factory by the end of June. 
Dana Corp. plans to expand its operations in Glasgow, investing some $20 million in its existing facility there. The expansion has been made possible as a result of the company’s plans to sell some of its equipment to Louisville-based Sypris Solutions, creating room for Dana to expand. Sypris is taking over production of heavy vehicle axle parts previously handled by Dana. Under the agreement between the two companies, Dana will now purchase those parts from Sypris. Dana expects to add around 70 new jobs as a result of its Glasgow expansion, bringing its total employment there to around 600. 
After announcing in October that it was terminating its relationship with United Healthcare, the University of Kentucky Chandler Medical Center announced that it had forged a new agreement with the healthcare insurance giant. The decision to drop United had created concern among many Kentuckians covered by United, who relied on the services of physicians at UK Hospital, UK Children’s Hospital, the Markey Cancer Center and the Sanders-Brown Center on Aging as well as UK’s clinics throughout the state. 
The OshKosh B’Gosh plant in Liberty has been hit with its third round of layoffs in five years as 26 employees lost their jobs at the beginning of this month. Plant Manager Mitchell Hunter told the Casey County News that the facility is essentially closing its manufacturing process and will operate as a distribution center. The most recent layoff brings the workforce down to 98. When the company first opened its Liberty facility in 1985, it employed more than 800 people. 
Ventas, Inc. has announced plans to purchase Delaware-based ElderTrust for $184 million. Upon completion of the transaction, Ventas, a real estate investment trust company that specializes in healthcare and nursing facilities, will own ElderTrust’s 18 healthcare and senior housing assets, located in Pennsylvania, Massachusetts and New Jersey. Ventas Chairman, President and CEO Debra A. Cafaro noted that the acquisition was “an important step in the company’s strategic diversification plan.” 
Bank One is adding around 100 new jobs at its payment-processing center in Louisville. The Chicago-based company also plans to add 20 new jobs at various branch locations in the city. The new positions will bring Bank One’s Louisville roster to approximately 850 employees at the processing center and more than 1,800 workers for the entire market. 
The board of directors of Brown-Forman Corp. has approved a two-for-one stock split for its Class A and Class B shares. The distribution is expected to take place this month. The company has also raised its dividend from 37.5 cents to 42.5 cents per share. 
YUM Brands Inc.’s board of directors has approved the repurchase of $300 million of the company’s outstanding common stock over the next 18 months. The repurchase program is in addition to the $300 million share authorization that took place beginning in November 2002. “The board’s action reflects its belief that the company’s shares are undervalued and represent an outstanding long-term investment opportunity given the performance of our business portfolio, unique international growth prospects and development of multibrand innovation in the U.S.,” said YUM Chairman and CEO David C. Novak. 
Mitsubishi Electric Automotive America has launched a $32 million expansion of its plant in Maysville, where it manufactures car radios, ignition coils and other automotive parts. The expansion is expected to add approximately 60 new jobs. 
Brown-Forman’s Labrot & Graham Distillery is changing its name to The Woodford Reserve Distillery, Labrot & Graham Proprietors. The change is being made to recognize Woodford Reserve Kentucky Straight Bourbon Whiskey’s status as the top-selling small batch bourbon in Kentucky and one of the fastest-growing bourbons in the country.