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FAST LANE - November
2004
Inc. magazine noted that the companies that made the 2004 list managed to thrive despite continued stagnation in the economy, posting an average year-over-year sales growth of 265 percent. Further demonstrating the resilience of this year’s Inc. 500 crop is the fact that 102 of this year’s honorees started in 1999 – meaning that they weathered the start-up costs of the overcapitalized boom and thrived during the impending bust that was one of the toughest periods for young companies in recent memory. The Inc. 500 ranks privately held companies according to averaged year-over-year sales growth over the past four years. With approximately 75 percent of all new job creation in the U.S. coming from small businesses, the Inc. 500 is a prescient indicator of the companies and industries that are driving the economy forward. Over the years, the Inc. 500 has identified the next generation of world-class companies, with Microsoft, Stonyfield Farms, Timberland, Oracle, The Princeton Review, Morningstar, E* Trade, Intuit, and Domino’s Pizza all appearing on the list before they became industry powerhouses. STATE
Prescription for Innovation is a comprehensive broadband deployment and adoption plan that will leverage state, federal and private investment to blanket Kentucky with high-speed Internet access. The initiative will encourage citizen use of computers and the Internet, and provide Kentucky communities with an online presence for improving citizen services and promoting economic development. Kentucky currently ranks 44th in the proportion of high-tech businesses; 45th in residential computer use; and 43rd in residential Internet use in comparison to neighboring states. The initiative will utilize advanced satellite mapping technology and grassroots data collection to create a telecommunications inventory map. The map will not only illustrate service gaps, but will also serve as an economic development resource for communities to demonstrate existing infrastructure for locating companies. “There is an increasingly large gap between those who have technology and those who do not,” said Fletcher. “Kentucky remains on the wrong side of this digital divide. While Internet access on its own is not a silver bullet solution for prosperity, adequate access to the global marketplace through broadband infrastructure enables knowledge-based economic development and has the ability to enhance the lives of our citizens and businesses.” It is estimated that full-scale broadband deployment could create 14,000 jobs and add more than $5 billion to the Gross State Product (GSP) in Kentucky. The initiative will be led by Bowling Green-based ConnectKentucky, a technology-based economic development alliance made up of technology-minded companies, universities and government entities. STATE The United States Congress has officially passed the American Jobs Creation Act of 2004, which includes a $10.1 billion buyout of the tobacco industry. Approximately 100,000 Kentucky tobacco quota holders are expected to receive a share of the buyout, based on their “allotments,” which dictate how much they can grow each year. Under this legislation, quota owners will receive $7 per pound and growers will receive $3 per pound. Those who both own quota and grow tobacco would get $10 a pound. The funds will be paid out in equal payments over the next 10 years and are based on 2002 quotas. (For additional information on the tobacco buyout, see page 18.) STATE
According to Measuring Up 2004, a study done every two years by the National Center for Public Policy and Higher Education, “Kentucky has recently made a heavy investment in its community and technical college system, enabling these institutions to play a much stronger role in workforce development. These investments appear to have paid off in the form of higher-than-average proportions taking and passing licensure examinations in fields like nursing and physical therapy.” The national higher education study also recognized the continued success of KCTCS in preparing students for workplace assessment examinations, “Two-year college students perform at high levels on the Work Keys examination – an instrument designed to measure applied academic skills – and this is especially the case for business writing.” The Measuring Up study recognized Kentucky as one of only five states to be given a “plus” in the category of learning. The plus recognizes the states’ participation in a pilot project which measures literacy levels and readiness skills of college graduates. Kentucky was also recently recognized by Expansion Management magazine, which gave the state’s industrial workforce training programs high honors, ranking Kentucky fifth in the nation in its annual survey of industrial site selection consultants. WESTERN KENTUCKY Max Arnold & Sons, LLC, which supplies and operates more than 50 fueling sites across Western Kentucky, has begun distributing an ethanol/petroleum blend known as E10 to fueling stations across Western Kentucky. The E10 blend, which is 10 percent ethanol and 90 percent standard petroleum, will utilize over one million gallons of ethanol from the Hopkinsville Commonwealth Agri-Energy plant in the first year of distribution. To produce that amount, 375,000 bushels of Kentucky-grown corn will be required, providing an additional boost to the state’s agriculture industry. In addition, ethanol reduces carbon monoxide, ozone, fine particulate matter, and toxic emissions from tailpipes, resulting in better air quality for the communities that utilize the blend. Phillip Russo, of Max Arnold & Sons, LLC, noted that the E10 blend will be supplied to over 44 unbranded retail locations and all Maxfuel Express convenience store locations in 10 counties with no increase in price at the pumps. There are no special vehicle requirements to use the blend. LEXINGTON
Lexington-based Host Communications, a subsidiary of Bull Run Corporation in Atlanta, has been UK’s rights’ holder since 1974, except for a six-year period from 1977 to 1983. Gray Television’s WKYT-TV in Lexington has been the flagship television station for the UK Network during that same period. In addition to previous radio and TV rights, the new agreement adds women’s basketball and baseball radio and television broadcasts, corporate sponsorships, stadium and arena signage, and the official athletic Web site. STATE
E.W. James & Sons Supermarkets, a family-owned business headquartered in Union City, Tennessee, has acquired 10 Winn Dixie stores located in Bowling Green, Elizabethtown, Glasgow, Hopkinsville, Leitchfield, Lexington, Princeton and Richmond. The stores will remain open during the conversion process, which is expected to be complete by the end of the year, according to CEO David James. Stores pharmacies will remain open as well and will retain all patient records on file with Winn Dixie. With the Kentucky acquisition, the James company now operates 25 stores in four states and employs more than 1,000 associates. Fifteen Louisville-area Winn Dixie stores have been acquired by Buehler Foods, Indiana’s largest privately owned independent retail food company. Buehler Foods currently owns and operates 49 retail stores, including 28 BuyLow stores and 21 Save A Lot stores. Buehler plans to operate the former Winn Dixie stores under the Buehler’s Market banner. LOUISVILLE Triathlon Medical Ventures LLC, a Cincinnati-based venture capital fund, has announced plans to open a new office in Louisville. The $96 million fund includes $5 million raised in Louisville by the University of Louisville Foundation, Norton Healthcare, Louisville Presbyterian Theological Seminary and Jewish Hospital. Triathlon – which invests exclusively in life science companies specializing in areas such as pharmaceuticals, medical devices and biotechnology – will focus on early-stage companies in the Midwest region as well as expansion-level companies throughout the nation. The company expects to invest in approximately 20 firms over the next two decades, with investments ranging from $500,000 to $4 million per company. Suzanne Dutch, one of Triathlon’s three partners, said Triathlon identified Louisville “because we feel that Kentucky’s academic and medical assets, coupled with the historic dearth of life sciences-focused, professionally managed venture capital, provide fertile ground for achieving our financial objectives.” Though the company itself will not be adding many new jobs, Louisville Metro Mayor Jerry Abramson said Triathlon’s location in Louisville can translate into economic development opportunities. “Triathlon’s strategy is to seek investment opportunities in the communities where they are active and have offices,” he said. “More investment will mean that more start-ups and early stage venture capital efforts will take root here and – we hope – ultimately grow into commercial successes that will bring jobs, high salaries, benefits and additional investment and activity in our community.” Triathlon is also opening offices in Indiana and Missouri. BARDSTOWN
The design of the new Bourbon Heritage Center incorporates a number of key natural elements utilized in the bourbon-making process – copper, limestone and white oak – and echoes the form of the distillery’s open rickhouse. Highlights of the center include a series of interactive and education exhibits that demonstrate the bourbon-making process and its history and a barrel-shaped tasting room. STATE
Kentucky has the highest concentration and diversity of aluminum industry in the world, with 142 facilities and more than $5 billion in shipments. The industry provides work for nearly 18,000 Kentuckians and is the state’s fifth largest employer. The UK Sloan Center for a Sustainable Aluminum Industry, which is to be housed in the UK Gatton College of Business and Economics, will enhance the university’s long-standing ties to the industry which already include the UK College of Engineering’s Center for Aluminum Technology, and Secat, Inc., a university-industry partnership devoted to advances in aluminum technology. Secat Inc. was recently awarded a $4 million grant from the U.S. Department of Energy to study ways of improving energy efficiency in the aluminum industry. Paul Jarley, associate dean at the UK Gatton College has been named director of the new center. Subodh Das, CEO of Secat will serve as executive director. The new center joins 23 other Sloan Centers for Industry housed at 15 universities across the country, including MIT, Harvard University, Carnegie Mellon University, and the Georgia Institute of Technology. The Alfred P. Sloan Foundation is a philanthropic organization that supports research on such topics as the standard of living, economic performance and education in science and technology. LOUISVILLE
The Monday-evening employment partnership connects employers who have job openings with qualified employees. After nearly a year of operation, 3,063 calls to the on-air phone bank – staffed by OET specialists in Louisville – have produced 2,247 referrals and 311 confirmed hires. According to OET estimates, the average entry-level wage for new hires reported recently for the Kentuckiana area is about $23,000 a year. “Using a yearly average of $23,000 for an entry-level position, we estimate that the hires from the WAVE 3 Job Link Monday will more generate than $7.15 million a year back into the economy. That’s a nice boost to local and state economy,” said OET Executive Director Penny R. Armstrong. WINCHESTER East Kentucky Power Cooperative (EKPC) has terminated its power purchasse agreement with Cincinnati-based Kentucky Pioneer Energy, ending plans to build a 540-megawatt coal gasification plant in eastern Clark County. The Kentucky Pioneer Energy (KPE) plant was to be fueled by pellets made from coal and municipal solid waste. Officials with EKPC said the termination was the result of KPE’s failure to obtain financing and achieve commercial operation. Because Pioneer Energy failed to obtain financing under an extended deadline of June 30, 2001, EKPC proceeded with construction of a 268-megawatt generating unit at Spurlock Station in Maysville, to meet its member cooperative’s power supply needs. That unit will come on-line in April 2005. “Our member cooperatives are growing and need additional power,” said Kevin Osbourn, a spokesman for East Kentucky Power. “Our board decided that it could not afford the time for KPE to resolve the project uncertainties, and it was time to send Kentucky Pioneer Energy a notice of termination of the power purchase agreement.” EKPC is a not-for-profit generation and transmission electric cooperative with headquarters in Winchester, Ky. EKPC provides wholesale energy, transmission and support services to 16 distribution cooperatives that serve 480,000 Kentucky homes, farms, businesses and industries. Together, EKPC and the member cooperatives are known as Kentucky’s Touchstone Energy Cooperatives. LOUISVILLE
Humana’s SmartExpress plan includes up to three plan options, including a choice of two Preferred Provider Organization (PPO) health plans, one with co-payments and the other with benefits based on deductibles. The program also offers a personal care account (PCA), an optional prepaid savings account that employers can provide in addition to PPO coverage. The PCA is funded by the employers and accompanies a high-deductible PPO from which employees can access their funds with the HumanaAccess VISA® card to pay for their deductible. The choice of benefit plans gives employees greater flexibility in deciding what level of benefit best meets their health care and budgetary needs while allowing employers to benefit from the tax-advantaged status of their contributions to employee PCAs. Small businesses have struggled in recent years with providing any health insurance coverage – let alone a plan that offers multiple options – due to rapidly rising costs. The Kaiser Family Foundation’s 2004 Annual Employer Health Benefits Survey revealed that the number of small employers (companies with 3-199 workers) offering health coverage declined from 68 percent to 63 percent over the last three years, leaving an additional five million workers without health insurance. STATE
Governor Ernie Fletcher unveiled the four finalists for the state’s new brand last month; the final determination is now up to the public, with residents and non-residents alike invited to participate. Votes are being collected online at www.kentucky.gov as well as at the state’s welcome centers, state resort parks, the Kentucky Horse Park in Lexington, the Kentucky History Center in Frankfort and the Kentucky Artisan Center in Berea. Votes can also be mailed to Brand Kentucky, Kentucky State Capitol, 700 Capital Avenue, Frankfort, KY 40601. Voting will end on November 21, with an official announcement of the new brand scheduled for November 24. OHIO
The Texas-based computer giant plans to invest up to $60 million in the project, which is expected to generate up to 655 jobs within the coming three years. Approximately 250 new jobs are expected to be created within the first year. Salaries at the new distribution center will average approximately $25,584 annually, or $12.30 per hour, for an annual payroll of around $17 million. The new facility will handle the distribution of computer accessories, replacement parts and printer-ink. Company officials said the availability of DHL’s air freight hub in nearby Wilmington was a determining factor in the company’s decision to select West Chester. Prior to DHL’s decision to consolidate its Northern Kentucky and Ohio operations in Wilmington, Dell had been considering a location in Northern Kentucky. In an effort to woo Dell, the West Chester township approved incentives of up to $3.5 million over seven years (dependent upon the company’s investment). In addition, the Ohio Tax Credit Authority approved a corporate earnings tax abatement worth up to $2.9 million over 10 years. OHIO
GAC, a 24-hour country music video network launched in 1996, is a wholly owned subsidiary of Jones Media, a privately owned company based in Denver. GAC is distributed via cable and satellite television systems nationwide to about 34 million households. When the transaction is completed, GAC will become the fifth national programming network operated by Scripps Networks. Other Scripps Networks brands include Home & Garden Television, Food Network, the DIY – Do It Yourself Network and Fine Living. Scripps also operates a national electronic commerce business, the Shop at Home Network and its Web site, shopathometv.com.
Business Briefs BOYLE COUNTY
CORBIN
COVINGTON
EASTERN KENTUCKY
FRANKFORT
HARRODSBURG
JENKINS
LESLIE COUNTY
LEXINGTON
LONDON
LOUISVILLE
MIDDLESBORO
NEWPORT
RICHMOND
SIMPSON 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. |
Nine Kentucky companies are included in the latest Inc. 500 listing, an annual ranking of the fastest-growing private companies in the country. Six of the Kentucky businesses named to the list are headquartered in Louisville; the other three are located in the Lexington area. 
Governor Ernie Fletcher has unveiled a plan to provide broadband (high-speed Internet) access throughout the state by 2007. 
The Kentucky Community and Technical College System (KCTCS) is getting national recognition for expanding educational opportunities and strengthening Kentucky’s workforce. 
The University of Kentucky has awarded Host Communications Inc. and Gray Television Inc. the university’s expanded athletic multimedia marketing rights in a 10-year, $80.5 million deal that makes it one of the most lucrative agreements in NCAA history.
Two privately owned grocery chains out of Indiana and Tennessee have acquired Winn Dixie stores throughout the state as the Florida-based chain pulls of some communities in order to focus on what it terms its “core markets.”
Heaven Hill Distilleries has opened its new Bourbon Heritage Center, the newest stop on the Kentucky Bourbon Trail. The Bourbon Trail has become a favorite Kentucky tourist attraction, featuring tours of the Bluegrass State’s most celebrated distilleries: Buffalo Trace, Four Roses, Heaven Hill, Jim Beam, Maker’s Mark, Wild Turkey and Labrot & Graham.
The University of Kentucky has been awarded a grant from the prestigious Sloan Foundation to fund a Sloan Industry Center that will focus on research into the challenges confronting the aluminum industry. 
What started out as a temporary partnership has celebrated its one-year anniversary, with more than 3,000 callers using the Kentucky Office of Employment and Training (OET) and Louisville’s WAVE 3 TV Job Link this year. 
In response to the increasing demand for affordable health benefit plans for small and mid-sized employers, Louisville-based Humana has introduced a health insurance plan designed for businesses with two to 299 employees.
With 2004 being an election year, it seemed only appropriate to give citizens a chance to cast their votes to determine a new Kentucky brand campaign. 
Dell Inc. has announced plans to open a computer distribution center in West Chester, a suburb of Cincinnati. 
Cincinnati-based E.W. Scripps Company has signed a definitive agreement to acquire the Great American Country (GAC) network from Jones Media Networks, Ltd., for $140 million in cash. 
Citing rising production costs, the Fort Harrod Drama Productions has announced that it will no longer present the annual outdoor summer drama, Daniel Boone, the Man and the Legend. The presentation has been a part of the Kentucky arts scene for more than 40 years, but the production company has struggled over the past several seasons with declining attendance and increasing expenditures. Decreased funding from the state further exacerbated the problem this past year. Board members emphasized, however, that educational programming presented by Fort Harrod Drama Productions will continue. 
Trane has laid off 75 workers from its Lexington assembly line, citing a decline in orders for the company’s commercial heating and air conditioning units. Company officials said the lay-offs could be temporary, depending upon economic conditions in the coming months. Trane employs approximately 1,200 workers at its Lexington plant. 
The University of Kentucky College of Medicine and Cardinal Hill Rehabilitation Hospital have announced the appointment of three shared faculty positions that will focus on brain and spinal cord injury research. A $2 million grant from CHRH to UK in 1999, along with $2 million in matching funds from the Kentucky Research Challenge Trust Fund, has made possible the appointment of three shared faculty positions in neurorehabilitation, including a chair and two professorships. UK Professor Joe Springer has been tapped to chair the research initiative. 
UPS has announced plans to hire some 100 more pilots, most of who will be based out of Louisville. The new hires are being added in anticipation of an expansion in international flights, said company officials. The company also expects to hire approximately 425 temporary workers in Louisville this month to help meet holiday demands. UPS anticipates delivering a total of 346 million packages between Thanksgiving and Christmas. 
Newport will lose approximately 100 jobs as Shire Pharmaceuticals moves its North American headquarters from the Northern Kentucky city to Wayne, Pennsylvania, a suburb of Philadelphia. The move comes as part of the British firm’s corporate reorganization. Shire’s work primarily focuses on central nervous system disorders (CNS), gastrointestinal and renal diseases. The company’s particular expertise lies in the area of attention deficit hyperactivity disorder (ADHD) as a result of its development and marketing of Adderall, one of the leading medications for that disorder. 
Cracker Barrel Old Country Store has signed an agreement with the Grand Ole Opry in Nashville to become the first presenting sponsor in the Opry’s 79-year history. As a result, the Grand Ole Opry will officially become “The Grand Ole Opry Presented by Cracker Barrel Old Country Store.” The deal with Cracker Barrel, which is headquartered in Lebanon, Tennessee, also includes co-branded promotion spots on the Opry’s syndicated radio shows, three 60-second spots during broadcasts, banner advertisements, and daily advertising at the Opry House.