Governor Steve Beshear today joined company officials and local leaders to break ground on Aleris Corporation’s $350 million expanded aluminum rolling mill in Hancock County.
The expansion will equip Aleris with the capabilities and the technology to serve the North American automotive industry as it shifts to broader aluminum use to make lighter vehicles. It’s the single-largest project investment by a company in Kentucky in more than a year.
“I’m very excited to celebrate the groundbreaking of such a significant project,” said Gov. Beshear. “The demand for aluminum is growing exponentially, and Aleris’ investment will help ensure the Commonwealth is at the pinnacle of the industry. I want to thank Aleris for its continued investment in Kentucky and our workforce.”
The investment, which will include two continuous annealing lines and a new wide cold mill, positions the company for long-term growth while maintaining steady employment for approximately 800 workers. Construction will begin this fall, with a goal of shipping automotive body sheet to customers by early 2017.
“The shift toward significantly greater aluminum use in automotive manufacturing represents a transformational opportunity for our industry,” said Steve Demetriou, Aleris chairman and CEO. “We have provided advanced automotive solutions to premium automakers in Europe for many years. This expansion project will position Aleris, and specifically our Lewisport site, to play a key role in the transformation as it takes hold in North America.”
The company has operated its 1.6-million-square-foot mill in Hancock County since 1964. Aleris chose to expand in Kentucky due to the Commonwealth’s strategic location and business-friendly environment.
Tighter fuel efficiency requirements are causing auto manufacturers to expand their use of lightweight aluminum to include hoods, door panels and trunks. The use of aluminum sheet for vehicle bodies is projected to increase to 4 billion pounds in 2025, from 200 million pounds in 2012. The production of auto body sheet requires a highly specialized heat treatment process in order to meet the precise specifications of automotive manufacturers.
Aleris has expertise in this process at its Duffel, Belgium, facility where the company is a leading supplier to the European premium car industry.
Kentucky’s aluminum presence continues to grow. Last year, the industry created more than $2 billion in state gross domestic product. More than 20,000 Kentucky jobs are attributed to the industry.
“The aluminum industry is an important part of Kentucky’s overall economy and its status as the third-largest manufacturer of automobiles in the United States,” said Rep. Dwight Butler, of Harned. “Today’s groundbreaking is an exciting time for our region as Aleris brings more job opportunities to its current outstanding workforce in Lewisport.”
“On behalf of the Lewisport City Council, congratulations to Aleris on its expansion in Hancock County,” said Lewisport Mayor Chad Gregory. “This expansion proves Aleris has a commitment to this community and this region.”
“The recent announcement of the $350 million expansion for Aleris in Hancock County is wonderful news,” said Hancock County Judge-Executive Jack McCaslin. “This expansion will not only help retain many jobs at Aleris, but also will create many new jobs in Hancock County as well as many new construction jobs for our area. This new expansion will certainly be a much needed economic boost for Hancock County and the Commonwealth for many years to come.”
To encourage the investment in Lewisport, the Kentucky Economic Development Finance Authority (KEDFA) preliminarily approved Aleris for tax incentives up to $11 million through the Kentucky Reinvestment Act (KRA). KRA is designed to assist companies that need to make significant capital investment in Kentucky facilities in order to remain competitive.
KEDFA also approved the company for tax benefits up to $750,000 through the Kentucky Enterprise Initiative Act, which allows approved companies to recoup Kentucky sales and use tax on construction costs, building fixtures, equipment used in research and development and electronic processing equipment.