Five Reasons Kentucky Should be Your Top Choice for U.S. Operations
By Brad Thomas
Kentucky stands out for many things outside of world famous horses, fried chicken and bourbon.
Now don’t get me wrong, there is nothing wrong with being famous for the Kentucky Derby, Kentucky Fried Chicken or Kentucky Bourbon. But site selectors and company decision makers around the world know that Kentucky has attributes that make it unique when it comes to locating projects on our industrial sites.
What really makes Kentucky special, in my opinion, is the character of the people and their appreciation of quality-made products, crafted by local artisans who have mastered the marriage of hand and machinery.
Kentucky, known as the “Bluegrass State,” takes great pride in crafting products by hand, including distillers who make our famous bourbon and coopers who form the barrels with wood, iron and fire. They know to age the precious brown liquid until the proper time.
What most people — including some Kentuckians — fail to realize about the state is that Kentucky has become a mecca for advanced manufacturing. Here’s why:
1. Logistics and Distribution
A key component of Kentucky’s success in recruiting advanced manufacturing is a geographic location that puts us in the center of the United States population.
Logistics and distribution are king in Kentucky. Our manufacturers can easily move goods and materials by roads, air, rail and waterways to industrial and consumer markets around the world. Situated in the center of a 34 state distribution area, Kentucky can reach over 65 percent of the U.S. population’s personal income and manufacturing locations within a day’s drive.
Kentucky ranks 2nd in the United States for total air cargo shipments due to the presence of the UPS Worldport, the DHL Americas Hub and the Amazon Prime Air Hub being located within the state.
In addition, 20 interstates and major highways, as well as multiple Class 1 rail networks and barge lines on the Ohio and Mississippi rivers, also serve Kentucky. The transportation network here is capable of moving products anywhere virtually overnight.
2. Water/Climate
Kentucky boasts two barrels of bourbon for every Kentuckian. That’s the equivalent of more than 9 million barrels aging in the state. The reason Kentucky bourbon is world-renown comes down to two distinct advantages: water and weather. We have an abundance of limestone just beneath the ground that filters the water, providing calcium to produce champion Thoroughbred horses. Water is the lifeblood of society, and according to the National Weather Service, Kentucky typically receives on 50 inches of rain each year.
The rainfall in most of the state enters the water table and filters through limestone that produces a water absent of metals and other impurities. The water makes for not only a good base for bourbon but also across the food, beverage and pharmaceutical industries.
Bourbon requires aging in barrels for a minimum of three years to develop its unique attributes of color and flavor. The secret to Kentucky bourbon is the aging process of the barrel is subject to four distinct seasons with temperature fluctuations. These seasons allow for an ever-changing landscape and allow Kentucky to enjoy green springs, warm summers, cozy falls and white winters.
3. Renewable Energy
When the Site Selectors Guild selected a project from Kentucky at their 2021 Annual Conference for the inaugural “Project With a Purpose,” most people who heard the announcement were shocked to hear about a 100 percent renewable energy project coming from a state with a long history of coal production and use in generating electricity.
The Diageo Distillery project in Lebanon, Kentucky is the first large-scale renewable project in Kentucky and one of the largest carbon-neutral projects ever in North America.
Kentucky traditionally has had the lowest cost of electricity in the industrial sector among states east of the Mississippi River and one of the lowest in the U.S. Kentucky is nearly 20 percent lower on electricity costs than the national average, according to the Kentucky Cabinet for Economic Development.
In the changing landscape of economic development, almost every site selection project now includes a request for renewable energy even with an increase in overall costs. With the benefits of membership in the largest electric grid and market in North America known as the PJM Interconnection, Kentucky’s Touchstone Energy Cooperatives can assist companies in shaping a renewable energy future and meeting their sustainable energy goals.
4. Development of Future Workforce
Every person working in economic development will tell you that workforce is one of the keys in site selection. But finding workers currently ready for work and the development of a future workforce initiatives are two distinct issues. The short-term unemployment and recruiting workforce from outside of the community are very important, but pale in the comparison with developing a kindergarten-through-college pipeline of talent that is industry specific.
Kentucky has apprentice-style training programs to influence students into professional careers within the manufacturing community. The future of Kentucky’s success will be found in the classrooms across the state. The partnership between schools, universities and industries is a central piece to establishing Kentucky as the advanced manufacturing center of North America.
5. Speed to Market
How quickly a new facility can begin operations once a location decision is determined is often referred to as “Speed to Market.” From site preparation to permitting, we at Kentucky’s Touchstone Energy Cooperatives have concentrated on deep dives to determine where the best and quickest-to-market industrial sites across the state are located. We have used a state-of-the-art drone technology called PowerVision to showcase these top industrial sites of Kentucky on our DataIsPower.org website and our award-winning PowerMap mobile app.
By placing virtual buildings on the sites and performing stringent analysis using computer designed elements as well as digital terrain models, we are seeing the success of being proactive in developing infrastructure to benefit potential projects. The secret of “Speed to Market” is that we are ready for greenfield site opportunities as well as speculative buildings to ensure projects meet timelines race to begin production.
Summary
Citing only five things that are driving site selection in Kentucky after COVID is difficult but these items, I believe, are making the biggest impacts on projects locating here.
Whether it is Kentucky Fried Chicken or bourbon, products made in Kentucky just make people smile.
Brad Thomas is the Manager of Economic Development for Kentucky’s Touchstone Energy Cooperatives. He can be reached at brad.thomas@ekpc.coop.