As the contract manufacturing industry stands at a crossroads, certain CDMOs are prospering while other stalwarts are going the sell-off route or warding off political and economic threats to their businesses.
Thursday, Fujifilm Diosynth proved it’s firmly in the first camp as the company unveiled another massive expansion in the U.S.
Fujifilm is investing $1.2 billion more to soup up its end-to-end biomanufacturing facility in Holly Springs, North Carolina, bringing the total investment in the plant to more than $3.2 billion, the company said in a release.
Aside from adding large-scale production capacity, the project is expected to create 680 new jobs in Holly Springs, increasing the total number of positions at the site to 1,400 by 2031.
The move will help Fujifilm Diosynth harness the full potential of the antibody-drug market, including antibody-drug conjugates (ADCs) and bispecifics. The company expects the antibody market to grow 8% per year through 2030.
Cryogenic Processors will open a cutting-edge 115,000-s.f. cryogenic freezing and freeze drying facility to serve industries including food manufacturing, functional bacteria and cosmetics in Paducah in the fourth quarter of this year.
The plant’s capabilities will include a large freeze drying operation that will supplement its cryogenic flash freezing, ultra-cold storage and finished product packaging under one roof.
Oklahoma-based Cryogenic Processors has cryogenic freezing capabilities and is now adding the freeze-drying operation to its portfolio to help overcome a shortage of freeze-drying capability in the United States. Manufacturers typically must ship their product long distances to undergo the freeze drying process. Cryogenic Processors will be creating a one-stop shop approach to the overall process, saving manufacturers significant funds by handing their needs in its strategically situated mid-country facility.
FRANKFORT, Ky. — Slow Pass Bourbon Co. LLC is considering opening a new, nearly $70 million distillery in Springfield, Ky, and has received state economic development incentives to do so.
The company was founded by a team with decades of bourbon production experience that aim to provide bourbon and whiskey enthusiasts a rich and authentic commonwealth drinking experience, according to information presented at the Kentucky Economic Development Finance Authority (KEDFA) monthly board meeting held in March.
The distillery’s total investment is $69.7 million, with $51.5 million going toward building and improvements, and $7.7 million toward potential land costs, according to information presented to the KEDFA board and recommended for approval.
They plan to start with a job target of 37 and reach 43 after about three years. The average wage target is set at $35.57 an hour, including employee benefits.
HP Hood, a nationally branded dairy processor, will invest more than $83.5 million to expand dairy processing operations at its Winchester-area facility in Frederick County, Gov. Glenn Youngkin’s office announced Tuesday.
The project includes upgrades to production and packaging equipment as well as construction of additional warehouse and cooler space. HP Hood’s expansion will provide increased production capacity that will fund technology allowing Hood to offer new products, according to a news release.
“We proudly selected this location to build a greenfield plant more than 24 years ago and have been grateful for the ongoing support of Frederick County and the Commonwealth of Virginia,” HP Hood President and CEO Gary Kaneb said in the release. “This expansion enables us to continue to grow Hood’s business and accommodate the [ever-changing] needs of our customers and continue to provide a market for local dairy farms through our local milk cooperative network.”
Economic development is booming inside the Southern Gap Industrial Park in Buchanan County, where the county industrial development authority is spending $4 million to develop a new shell building and a 20-acre industrial site.
With support from the Virginia Coalfield Economic Development Authority, the park has become a hub for growth in an area historically defined by its rugged terrain and limited industrial infrastructure.
“It’s going to allow us to have marketable industrial property and a marketable industrial shell building in an area right now [where] we don’t really have a lot to offer,” says Jonathan Belcher, VCEDA’s executive director. “We want to be able to bring job opportunities to all parts of the region that we serve.”
Laura Hayes Chalk is leaving Virginia Beach’s economic development department to become the executive director of Virginia Beach Vision, a business advocacy group in Virginia Beach, Virginia Beach Vision announced Tuesday.
Chalk, who will start July 10, succeeds Martha McClees, who announced her retirement in November 2023.
Virginia Beach’s deputy director of economic development, Chalk joined the city in July 2019. Prior to that, she spent about seven years working for the Hampton Roads Alliance.
The executive director of VBV serves as the organization’s chief executive and works with its 130-member board of directors, which is comprised of business executives. Virginia Beach Vision focuses on seven areas: business development, comprehensive plan, crisis recovery, flood resiliency, member development, resort development and sustainability.
North American Air Exchanger (NAAX) was recently approved to participate in the Oklahoma Quality Jobs Program. The manufacturer of heat exchangers moved to Wagoner in 2023 purchasing a vacant industrial property. The company received assistance with renovation from the Wagoner County Economic Development Authority as well as The City of Wagoner Economic Development Authority.
“We have undertaken a rapid growth strategy and are pleased to partner with Oklahoma in being approved for the Quality Jobs Incentive,” said Rusty Kight, co-owner, NAAX. “Our plans include reaching 100 new jobs with an average wage of over $55,000. Our growth is exemplified by strong partnerships on a city, county and state level.”
“This award not only recognizes excellence in job creation but also celebrates the commitment of businesses to fostering quality employment opportunities in our community,” said Dalton Self, Wagoner Mayor.
AAR CORP., a leading provider of aviation services to commercial and government operators, MROs, and OEMs, broke ground on the expansion of its maintenance, repair, and overhaul facility in Oklahoma City on April 6.
More than 150 representatives from AAR, Alaska Airlines, state and local government, and partner organizations supporting the efforts gathered to celebrate groundbreaking on AAR’s new three-bay facility that is being constructed adjacent to the Company’s existing facility at Will Rogers World Airport.
The new facility has been designed to provide AAR an additional 80,000+ square feet of hangar and warehouse space and to accommodate all 737 variants, including the 737-10. AAR’s growth in Oklahoma City supports a recently expanded maintenance commitment from Alaska Airlines, a valued customer of AAR for more than 20 years. The new airframe MRO facility is expected to be operational in January of 2026.
America’s steel industry has long been associated with the mills that dominate Pennsylvania and the Rust Belt. Yet Mississippi County also has a surprisingly robust presence in its manufacturing, employing nearly 5,500 Arkansans — a 39 percent increase since 2009.
Clif Chitwood
It might be easy to assume that 2020’s pandemic-related economic downturn has dealt a devastating blow to Arkansas steel, but industry officials and corporate representatives paint a picture of impressive resilience. According to Clif Chitwood, president of the Great River Economic Development Foundation in Blytheville, steel producers already were adjusting to tough times before the pandemic hit.
“The pandemic really hasn’t had that strong an effect, because our largest setback started before COVID when Russia and Saudi Arabia got into a price war over oil,” Chitwood said. “It drove the price down to such levels that most American drilling stopped, and when the drilling stopped, they don’t need oil and gas pipes. That put as many as 1,500 people out of work, but it had nothing to do with COVID.
Osceola’s Big River Steel, which opened in 2014, is the only steel producer in the world that is LEED-certified and boasts clients such as BMW and General Motors.
“We’ve been fortunate that other expansions have employed thousands of construction workers and provided opportunities to many people laid off because of the oil and gas surplus. Otherwise, we’ve been really fortunate, as the mills haven’t stopped production.
They’re not running at 100 percent, but they’re using the time to reinvest in and expand their mills, and that’s very fortunate for our county.”
There are several key reasons that Mississippi County has become a mecca for the steel industry, with the most essential being its location along the Mississippi River. That massive body of water provides the cheapest possible per-ton transportation of mass materials, enabling the basic raw material of scrap steel to be shipped with maximum efficiency.
The boom began in 1985, when Nucor-Yamato Steel Co. constructed the first mill in Blytheville because of its proximity to the river. Company officials were pleased to find that the area provided a highly adaptable workforce. After all, the county had been highly successful with logging, cotton farming, textile mills and assembly plants throughout the century.
“Farming was going through one of its periodic downturns when Nucor came along, and many people were perfectly adaptable to working in steel mills because they had used large machinery with loud noises that didn’t scare them,” Chitwood said. “The steel industry paid very well, and Nucor came back within two or three years to build again.”
Chitwood noted that other factors playing into Mississippi County’s favorability with the steel industry include the fact that Interstate 55 enables finished goods to be transported by trucks, and that rail transportation is available through the Burlington Northern Santa Fe railroad, its main line running through the area. Ample energy also is key, and is supplied by a 500 KV electricity line that runs through the county and connects several of the major power companies.
“At the end of the day, the ability to buy electricity at the correct price is what allows induction steel mills to function,” Chitwood noted.
Despite Chitwood’s positive recounting of the industry’s resilience amid the downturn, Katherine Miller — Nucor’s director of public affairs and corporate communications — recalled that the entire steel industry nationwide saw a “significant” drop in demand during the second quarter as many states instituted stay-at-home orders. However, she also noted that the U.S. economy roared back stronger than expected since then and that there has been a solid rebound in demand for Nucor’s specialty products of bars, beams and sheet metal.
Production was also ramped up throughout the pandemic at the new state-of-the-art cold mill at Nucor Steel Arkansas in Hickman. That facility has added 24 new customers since its commissioning, growing production and shipments to the point that third-quarter, cold-rolled shipments surpassed the pre-COVID-19 volumes of the first quarter.
Another upside for Nucor has been its first trial runs of its third-generation advanced high strength steels, which are vital to the auto industry because they help reduce the weight of cars. As a result, the company continues to advance construction of its Gen 3 flexible galvanizing line, with production scheduled to start in the second half of 2021.
“We have been operating throughout the pandemic, as our facilities in the states where we operate were designated as essential businesses,” Miller said. “We made several operational changes to promote physical distancing and have utilized appropriate PPE. Even with the challenges posed by the pandemic, our team continues to successfully focus on safety. We are on pace to have a better year for safety than we had in 2019, which was the safest year in Nucor’s history.
“We expect the economic recovery to continue, but the pace will depend on getting the pandemic behind us with effective vaccines. We are very encouraged by the recent news about the effectiveness of a couple of vaccines, and we are confident that we will emerge a much stronger company in 2021.”
Nucor’s primary Mississippi County competitor is Big River Steel, which opened its own massive mill in 2014. Thanks to its focus on environmental sustainability, the company has become the only steel producer in the world that is Leadership Environmental Energy and Design (LEED) certified, and that has helped attract greater business from major automakers including BMW and General Motors.
Big River CEO David Stickler speaks highly of Mississippi County’s location be tween Memphis, St. Louis and Little Rock, noting that all three cities provide plenty of scrap metal, which is its primary raw material. He notes that Big River doesn’t use iron ore and coal in its steelmaking process, instead converting the scrap metal of old refrigerators, cars and bridges into new cars, appliances and refrigerators. Thus, the old image of steel mills as being pollution-belching problem spots has been replaced by one of a vital recycling industry.
“In the months of March, April and May, when the COVID pandemic first reared its ugly head, most steel companies in the world including most in the United States either shut down or reduced their capacity to less than 50 percent,” Stickler said. “But at Big River, we didn’t shut down, we kept running fully 100 percent and paid weekly production bonuses of 148 percent, which was even more than the 134 percent of base wages that we paid in 2019.
“Although the pandemic made us clearly more aggressive and nimble in decision-making and pursuing customers, we had customers more than willing to stick with us and continue buying their steel throughout the entire year,” he added. “The good news is, we were down only slightly because the automotive companies worked overtime to get their inventories back up.”
As secretary of the Arkansas Department of Commerce and executive director of the Arkansas Economic Development Commission (AEDC), Mike Preston has seen the year’s ups and downs from a particularly strong vantage point. He noted that the jobs in the Arkansas steel industry have increased by 0.3 percent this year, as the industry followed health safety protocols of the Arkansas Economic Recovery Task Force rather than surrendering to a shelter-in-place mentality.
“In 2019, we saw steel manufacturers invest in communities statewide. Nucor Steel held a ribbon-cutting ceremony for its $230 million specialty cold-mill complex at its Hickman facility, and SFI Arkansas announced an expansion of its Conway facility,” he said. “Zekelman Industries announced plans to build the world’s largest continuous ERW tube mill in Blytheville.
“Additionally, in November 2020, Big River Steel announced the completion of its $716 million Arkansas Flex Mill expansion — completed ahead of schedule, despite the public health crisis. My hope for 2021 is that we would continue to see these companies and our other steel manufacturers thrive and that we would continue to attract business to the state.”
Those positive sentiments are echoed by Chris Caldwell, the federal co-chairman of the Delta Regional Authority (DRA). This federal-state partnership was created by Congress in 2000 to promote and encourage the economic development of the lower Mississippi River Delta and Alabama Black Belt by investing in projects supporting transportation infrastructure, basic public infrastructure, workforce training and business development.
“Both in manufacturing and commodities, I expect first quarter reports to be excellent,” Caldwell said. “The surge in manufacturing efforts and the tremendous growth particularly in the automotive sector has resulted in a huge demand for steel. In fact, the demand is so great that more workers are needed to meet these requests. This is imperative to the work the Delta Regional Authority is doing to support and invest in industry-driven workforce training programs and initiatives throughout the Delta region.”
One example of DRA investments in Mississippi County is Arkansas Northeastern College’s Arkansas Delta Workforce Opportunity for Rural Communities (ADWORC) initiative. U.S. Sen. John Boozman (R-Arkansas) and Caldwell visited the college in July to discuss the state of industry-driven workforce development in the Arkansas Delta with ANC administration, faculty, students and industry partners.
The initiative increases labor capacity to advance economic development and favorably impact poverty reduction by reskilling workers dislocated by labor market turbulence. As a result, more than 1,300 residents in the Arkansas Delta region will be trained as skilled laborers for careers in high-demand markets such as welding.
“As the economy improves and jobs move into the Arkansas Delta, the demand for highly skilled labor continues to grow,” Caldwell said. “The ADWORC initiative helps meet this demand by reskilling workers to fit these new industry-driven jobs, and I am proud to support this excellent program designed to get over 1,300 Delta residents back to work.”
An aerial view of Big River Steel’s operations in Mississippi County.
Ultimately, the future looks promising for the steel industry to continue weathering storms in 2021, a forecast shared by both Preston and Chitwood.
“My hope for the Arkansas steel industry in 2021 is the same as it is every year — continued resilience and growth,” Preston said. “Within the past decade, the steel industry has demonstrated consistent growth throughout the state. In Mississippi County alone, the industry has grown by more than 35 percent since 2015, making it the second-largest steel producing county in the nation.”
The old image of steel mills as being pollution-belching problem spots has been replaced by one of a vital recycling industry.
Chitwood stresses the importance of U.S. manufacturing, especially during a pandemic.
“Personally, I think the U.S. should be doing more industrial production, and I don’t think we took into account all of the costs closing all the factories just to buy from China.
“Yes, we can buy more T-shirts for $10 than when they were produced in America, but I don’t think we addressed the social costs of taking millions of people out of productive work and throwing them either into early retirement, Social Security disability or the welfare system, which has happened millions of times in the United States. I hope our leaders take that into account as we go forward with trade deals.”
WINCHESTER, Ky. (April 11, 2024) – Today, Gov. Andy Beshear joined local officials and representatives from Washington Penn Plastic Co. to celebrate the beginning of construction for the company’s new manufacturing facility in Clark County, a nearly $105 million investment that will create 88 full-time, Kentucky jobs.
“It is an exciting time to be doing business here in the commonwealth, and companies throughout the U.S. and around the world are taking advantage of our state’s business-friendly environment,” said Gov. Beshear. “I am thrilled to be here today celebrating this welcomed next step for Washington Penn, the community of Winchester and the state’s manufacturing sector. I look forward to watching the company’s continued success here in Kentucky.”
The company’s new, nearly 250,000-square-foot facility will be located on 70 acres in Winchester and help the company produce polypropylene and polyethylene compounds in pellet form to be shipped to customers around the world. The land will also allow room for additional expansion efforts and solar electricity generation. The 88 full-time jobs created with this investment will include production line operators, shipping and receiving technicians, process engineers, supervisors and quality management roles. Construction of the new facility is expected to be completed in 2025.
“Washington Penn is excited to continue working with its partners in Kentucky and the Winchester community and to begin operations in Winchester,” said Will Torpey, president of Washington Penn.
Washington Penn is a family-owned manufacturer founded in 1954. Today, it is a leading provider of polypropylene and polyethylene compounds. Washington Penn operates over 40 plastic compounding lines in eight facilities across North America, Asia and Europe, including a production facility in Frankfort, Kentucky, supplying custom polyolefin compounds to the automotive, appliance, construction, consumer, packaging and industrial markets.
Clark County Judge/Executive Les Yates is thankful for Washington Penn’s announcement and the economic boost the company will provide to the region. “This is an exciting announcement. We are truly grateful for this opportunity. This project will add good-paying jobs and investment to our county. We want to welcome and thank Washington Penn for selecting Clark County for its continued growth and success.”
Winchester Mayor JoEllen Reed noted the company’s history in the plastics industry and welcomed Washington Penn to the community. “This is outstanding for our community from a jobs and investment standpoint, but also because Washington Penn has such a rich history in the plastics industry and an outstanding reputation for quality and community. We are thrilled that they have chosen Winchester for their next facility!”
Brad Sowden, executive director of the Winchester-Clark County Industrial Development Authority (WCCIDA), praised the teamwork that made this announcement possible: “A big thank you to the WCCIDA Board of Directors. Their support, leadership and guidance were instrumental to this project. Washington Penn will be a great corporate addition to our community. Dennis, Ryan and their team have been magnificent to work with and we are excited to welcome them to Winchester and Clark County. I want to thank Ashlee Chilton and her team at Kentucky’s Cabinet for Economic Development, R.J. Corman Railroad and their team, the KPDI program and LG&E-KU’s Opportunity Kentucky Fund. There were so many moving pieces to bring this opportunity to Winchester and Clark County. I certainly want to thank Mayor Reed and Judge Yates for their support of this project but most importantly, their support and dedication to the people of our community.”
John Bevington, senior director of Business and Economic Development for LG&E and KU, highlighted the ideal fit between the company and community for this new facility: “Washington Penn’s growth and new location in Winchester is a perfect combination of planning, collaboration and success. The planning and development of this site by the Winchester Clark County Industrial Authority; the collaborative investment in site readiness by the KPDI program, the community and KU’s Opportunity Kentucky grant and Washington Penn’s growth and success in Kentucky are a near perfect economic development picture. Congratulations and thanks to all involved.”
Washington Penn’s investment and job creation build on the best four-year period for economic growth in state history.
Since the beginning of his administration, Gov. Beshear has announced more than 1,000 private-sector new-location and expansion projects totaling over $30.5 billion in announced investments, creating more than 52,500 jobs. This is the highest investment figure secured during the tenure of any governor in the commonwealth’s history.
The robust job creation has been accompanied by rising wages across the commonwealth. The average incentivized hourly wage in 2022 and 2023 topped $26 in consecutive years for the first time.
Gov. Beshear has announced some of the largest economic development projects in state history, which have solidified Kentucky as the electric vehicle battery production capital of the United States: Ford Motor Co. and SK On’s transformative $5.8 billion, 5,000-job BlueOval SK Battery Park in Hardin County; AESC’s $2 billion, 2,000-job gigafactory project in Warren County; Toyota’s $1.3 billion investment in Scott County; and INFAC North America’s $53 million investment in Taylor County, among others.
The Governor’s administration also secured the largest General Fund budget surplus and Rainy Day Fund, as well as the most jobs filled in state history. Last year, Kentucky set the record for the longest period with the lowest unemployment rates in state history.
Kentucky also secured rating increases from major credit rating agencies Fitch Ratings and S&P Global Ratings, and Moody’s Investors Service upgraded Kentucky’s credit outlook from stable to positive.
In March, Site Selection magazine ranked Kentucky third nationally and first in the South Central economic development projects per capita in its 2023 Governor’s Cup rankings. Previously, Site Selection placed Kentucky first in the South Central region and top 5 nationally in its 2023 Prosperity Cup ranking, which recognizes state-level economic development agencies for their success in landing capital investment projects.
Gov. Beshear announced a “Supply Kentucky” initiative with the goal of boosting job growth, reducing costs and providing more security in the supply chains of our Kentucky companies.
To encourage investment and job growth in the community, the Kentucky Economic Development Finance Authority (KEDFA) in August 2023 preliminarily approved an incentive agreement with the company under the Kentucky Business Investment program.
KEDFA also approved the company for additional 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, Washington Penn 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.
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