Logan Aluminum expanding into auto metal production
By Jim Turner


Posted on November 1, 2015 11:03 PM



Wednesday was a day to remember and relish in and for Logan County. Government and industrial leaders from around the state and internationally were in Russellville and North Logan to celebrate accomplishments and look forward to even greater achievements in the future.

After a full house of government, industrial and business leaders heard in glowing terms the state of Logan County’s economy at the annual LEAD Business & Industry Luncheon, many of those assembled headed north to Epley Station for a major announcement and groundbreaking at Logan Aluminum.

Logan Aluminum President Randy Schumaker announced the groundbreaking of a $240 million, Tri-Arrow Aluminum-assisted expansion with an additional $50 million investment under evaluation. The expansions will create approximately 190 new jobs at Logan Aluminum.

Among those in attendance at one or both of the events were Gov. Steve Beshear, Canada-based Champion PetFoods President and CEO Fran Burdzy, the heads of three Asia-based corporations, R.J. Corman Railroad President/first Logan Aluminum President Fred Mudge, Rep. Martha Jane King, Congressional candidate Michael Pape, a field representative for Sen. Mitch McConnell, Southcentral Kentucky Community and Technical College President Philip Neal, Judge-Executive Logan Chick, mayors Mike Hughes, Donna Blake, Bert Adler and Mark Stratton, and LEAD Executive Director Tom Harned.

The primary purpose of the expansion is to produce heavier gauge material to meet customer requirements and expand Logan’s product range to serve the growing automobile industry.

“There’s not a county judge in Kentucky or a county mayor in Tennessee or Indiana who wouldn’t be proud to make this announcement,” Judge Chick said.

Harned beamed, “What a great day to be an economic developer!” He talked about the reputation Logan Aluminum has on a wide scale. “For a few years, I worked in economic development in North Carolina,” he said. “When I told some people in industries there I was accepting this position in Logan County, they said, ‘You’re going to get to be in the home county of Logan Aluminum?’ They said they receive training often based on the concepts that have been created at Logan Aluminum.

(Harned had been the bearer of other great economic news and statistics at the LEAD gathering earlier in the afternoon. See the related story, also on The LoJo at http://www.theloganjournal.com/Stories.aspx?Article=news619)

“Strong, lightweight materials are quickly becoming standard in vehicle production and Logan Aluminum’s expanded operations contribute to Kentucky’s position as a global leader in the aluminum industry,” Gov. Beshear said in a news release. “Logan Aluminum sets the example of how innovative Kentucky companies can add capacity, products and jobs by reacting to market forces.”

Even before the creation of the new jobs, Logan already employs almost 1,100 people.

The expansion will include a new 280,000-square-foot building to produce approximately 600 million pounds of cast ingot annually. An additional 68,000-square-foot expansion will accommodate new equipment for aluminum sheet production to support its expanded capabilities including the auto industry.

“Logan Aluminum has become a world leader in the supply of rolled aluminum sheet through the team members’ dedication to continuous improvement since the start-up in 1983,” said Logan Aluminum President Randy Schumaker. “These investments provide the base for continuing industry leadership for Logan Aluminum as the aluminum marketplace transforms over the coming years.

“Today we are breaking ground for a new generation.”

“This expansion project will enhance both the capability and capacity at the Logan rolling mill. This will grow our business as a high-quality supplier,” said Steve Shiraishi, CEO and president of Tri-Arrows Aluminum, whom Schumaker called “my boss.”

The company expects to start the project this year and plans to start producing heavier gauge sheet in 2016 and casting ingots in early 2018.

Beshear said uniting Logan Aluminum and the automobile industry is a natural for Kentucky. ”We have 150 aluminum facilities in Kentucky employing almost 18,000 people with a gross domestic product of almost $2 billion. Additionally the Commonwealth is third in the nation in producing automobiles. First is Detroit and second is Ohio by the narrowest of margins over Kentucky.”

What was to become Logan Aluminum started with an announcement in Frankfort in 1981 by Gov. John Y. Brown Jr. About the time the original plant was nearing completion, California-based ARCO Metals acquired Anaconda. Then in 1985, when the U.S. Justice Department blocked the complete sale of the plant to Canada-based Alcan Aluminium, Logan Aluminum was formed as a corporate island with Alcan and ARCO as co-owners.

Thirty years later, the co-owners are Louisvile-based Ti-Arrows and Atlanta-based Novelis Corp.

When Logan started with 22 acres under roof, the capacity was production of 400 million pounds of steel. Now that capacity is two billion pounds, five times its original size. An additional 432,750 square feet of builds have been added, enough for almost eight football fields. Starting out, the production could have been 13,600 mid-size American automobiles. Now the capacity is enough for 4,500 mid-size automobiles.

Meanwhile Logan Aluminum has cornered the market on aluminum can stock, providing aluminum for over 45 percent of America’s cans.

Both Schumaker and Plant Manager Ken Perdue talked about Logan’s employees as the driving force behind the overwhelming success of the aluminum plant at Epley Station.

Among those shoveling as part of the groundbreaking were Gov. Beshear, Schumaker, Harned, Judge Chick, Rep. King, Steve Shiraishi and David Brown of Tri-Arrows, Mitsuru Okada of UACJ and Keigo Shimomi of Sumitomo.

To encourage the investment and job growth in the community, the Kentucky Economic Development Finance Authority (KEDFA) preliminarily approved the company for tax incentives up to $5.2 million through the Kentucky Business Investment program. The performance-based incentive allows a company to keep a portion of its investment over the agreement term through corporate income tax credits and wage assessments by meeting job and investment targets.

Additionally, Logan Aluminum was preliminarily approved by KEDFA for $1.8 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.

Logan Aluminum also is eligible to receive resources from the Kentucky Skills Network. Through the Kentucky Skills Network, companies are eligible to receive no-cost recruitment and job placement services, reduced-cost customized training and job training incentives. Last year, the Kentucky Skills Network trained more than 84,000 employees from more than 5,600 Kentucky companies.

Gov. Beshear credited Rep. King for her cooperation in helping make those incentives a reality. King has worked with a transportation firm which serves Logan Aluminum for three decades.

The governor, who has only has a few days left in office with his successor schedule to be elected Tuesday, also praised former Lewisburg mayor Warren McReynolds, who has been Beshear’s official contact person in Logan County the past eight years. McReynolds was present at the groundbreaking. His son Keith is a long-time employee of Logan Aluminum.

 




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