Novelis to Expand Recently Opened Guthrie Operation, Create 140 Additional Kentucky Jobs
Frankfort, KY (STL.News) Kentucky is rolling the economic momentum of 2021 into the new year, as Gov. Andy Beshear announced aluminum producer and recycler Novelis will move forward with a Phase 2 expansion of its recently opened operation in Todd County with a roughly $365 million investment to construct a new recycling center that will create 140 well-paying jobs for local residents.
“As we continue to build back throughout Western Kentucky, companies are committed to creating quality job opportunities for Kentucky families,” Gov. Beshear said. “I had the chance to join Novelis for the grand opening of the company’s automotive aluminum finishing plant just over two months ago, and its leadership’s decision to quickly move forward with plans for expansion is tremendous news. Novelis is proving to be a great fit for Todd County and the surrounding area, and I am eager to see the company continue to grow for years to come.”
Novelis will construct a new sheet ingot casting, shredding and recycling center with annual capacity of 240,000 tons to serve the automotive market. The new facility – to be located adjacent to the existing automotive finishing plant on Old Railroad Lane in Guthrie – is expected to reduce Novelis’ carbon emissions by more than 1 million tons each year and enable the company to grow its automotive recycling programs in North America. Using recycled aluminum as input material requires only 5% of the energy used to make primary aluminum, thus avoiding 95% of the carbon emissions associated with production.
The expansion announcement comes just over two months after Gov. Beshear joined Novelis for the grand opening of the automotive aluminum finishing plant in late October. That facility included a $300 million-plus investment and creation of over 150 jobs, including 100 Kentucky residents. Novelis also operates a 130-employee beverage can recycling facility in Berea that opened in 1989. The Madison County facility melts and casts ingots from 20% of the nation’s recycled beverage cans.
“We are excited about this new investment in Kentucky, which will help Novelis achieve its sustainability goals, as well as support the carbon-reduction targets of our automotive customers,” said Tom Boney, executive vice president and president of Novelis North America. “The Commonwealth of Kentucky has been a great business partner for many years and has a strong, highly skilled workforce to meet the growing need for high-strength, low-carbon aluminum. We look forward to deepening our relationships with community leaders to ensure our facility has a lasting, beneficial impact in the region.”
Headquartered in Atlanta, Novelis recycles and produces aluminum globally, with 33 advanced rolling and recycling facilities in nine countries across North and South America, Europe and Asia. The company employs approximately 14,650 people worldwide. More than 225 vehicle models use Novelis’ aluminum alloy and the company’s products also are used to manufacture a variety of products including beverage cans, airplanes, computers, mobile phones, flexible tubing, insulating sleeves, license plates and architectural products, such as roller shutters, awnings, roofing, gutters, facades and sandwich panels.
Kentucky is home to 230-plus metals-related facilities, which employ approximately 25,000 Kentuckians. In 2021, Kentucky’s metals industry announced over 1,700 full-time jobs with $975 million in new investments.
Todd County Judge/Executive Todd Mansfield thanked the company for its commitment to the region.
“We are excited to support and celebrate Novelis’ growth and success in our region with this major expansion. With this good news, Novelis continues to demonstrate their confidence in Todd County and South Western Kentucky,” Judge/Executive Mansfield said. “We are appreciative of their sizeable investment as well as the support and leadership provided by Gov. Andy Beshear, the Cabinet for Economic Development, and the Tennessee Valley Authority to ensure this expansion happens in Guthrie, Todd County, Kentucky.”
Guthrie Mayor Jimmy Covington looks forward to a long-term partnership with Novelis.
“On behalf of the citizens of Guthrie and Guthrie City Council, we offer our heartfelt appreciation to Novelis for their investment in our community and the hundreds of job opportunities provided to Todd County families,” Mayor Covington said. “We look forward to continuing to work with our partners to ensure Novelis enjoys success in our community for generations to come.”
South Western Kentucky Economic Development Director Carter Hendricks said Novelis will continue to grow thanks to the region’s strong business climate.
“The South Western Kentucky region is proud to be the home of Novelis and this expansion. We know that the hardworking people of our region and the outstanding support from local, state and regional leaders have paved the way for Novelis and their continued success in Todd County and South Western Kentucky,” Hendricks said. “We look forward to working with Novelis’ local and corporate leadership to assist with any of their needs and to ensure the company enjoys our diverse and growing workforce, business-friendly environment and amazing quality of life.”
Todd County Industrial Foundation President John Walton said Todd County will greatly benefit from Novelis’ continued growth.
“Novelis has been a blessing to our community since their initial investment as their local and corporate leadership have become part of the fabric of our community and have given generously to important causes,” Walton said. “We are ecstatic that they’ve chosen the Guthrie site for further expansion and opportunity. We realize that this project signifies an even greater commitment and investment by the company, which will lead to even more opportunity for the businesses and individuals of Todd County and South Western Kentucky.”
Novelis’ investment and planned job creation furthers recent economic momentum in the commonwealth, as the state builds back stronger following the effects of the pandemic.
In 2021, the commonwealth shattered every economic development record in the books. Private-sector new-location and expansion announcements included a record $11.2 billion in total planned investment and commitments to create a record 18,000-plus full-time jobs across the coming years. Kentucky’s average incentivized hourly wage for projects statewide in 2021 was $24 before benefits, a 9.4% increase over the previous year.
In September 2021, Gov. Beshear, Ford Motor Co. Executive Chair Bill Ford, CEO Jim Farley and Dong-Seob Jee, president of SK Innovation’s battery business, announced the single largest economic development project in the history of the commonwealth, celebrating a transformative $5.8 billion investment that will create 5,000 jobs and places Kentucky at the forefront of the automotive industry’s future.
Kentucky also saw an all-time, record-setting budget surplus in fiscal year 2021 and enters 2022 with an estimated $1.9 billion more than budgeted.
To encourage investment and job growth in the community, the Kentucky Economic Development Finance Authority (KEDFA) today preliminarily approved a 15-year incentive agreement with the company under the Kentucky Business Investment program. The performance-based agreement can provide up to $5 million in tax incentives based on the company’s investment of $364.2 million and annual targets of:
- Creation and maintenance of 138 Kentucky-resident, full-time jobs across 15 years; and
- Paying an average hourly wage of $38 including benefits across those jobs.
Additionally, KEDFA approved Novelis for up to $4 million in tax incentives through the Kentucky Enterprise Initiative Act (KEIA). KEIA allows approved companies to recoup Kentucky sales and use tax on construction costs, building fixtures, equipment used in research and development and electronic processing.
By meeting its annual targets over the agreement term, the company can be eligible to keep a portion of the new tax revenue it generates. The company may claim eligible incentives against its income tax liability and/or wage assessments.
In addition, Novelis can receive resources from Kentucky’s workforce service providers. Those include no-cost recruitment and job placement services, reduced-cost customized training and job-training incentives.