Kentucky Gov. Andy Beshear and Lt. Gov. Jacqueline Coleman joined executives from Pratt Paper LLC and local officials in Henderson recently to announce the company’s new $400 million paper mill, a project committed to creating 321 well-paying jobs over the next five years.
Pratt’s investment is the largest investment in this region of Kentucky in more than 25 years, stands as the largest in the state in nearly two years and is the third largest job-creation announcement of 2021. The project further propels Kentucky’s recent wave of economic growth toward a sustainable future with quality job opportunities for residents across the state.
“This is a significant investment in Kentucky and one that will make Pratt Paper a major employer in Henderson County for years to come,” Gov. Beshear said. “Pratt is a company with a vision for the future, and I could not be more proud that future will include Kentucky. We’re not just rebuilding our economy in the commonwealth, but surging ahead to levels we have not seen before. This is happening because great companies like Pratt Paper and strong leaders like Anthony Pratt can see where Kentucky is headed and know our skilled workforce is the partner they need to succeed.”
“We are consistently seeing positive economic news in Kentucky,” said Lt. Gov. Coleman. “Today’s announcement with Pratt Paper is another example and will serve as a tremendous boost to Henderson and Western Kentucky, creating 320 new jobs in rural Kentucky. That means 320 Kentuckians will make a good living and provide economic stability to their families. Gov. Beshear and I are committed to continue working to create these opportunities all across the commonwealth.”
Pratt plans to build two facilities totaling 1.15 million square feet along Kentucky Highway 425 in Henderson County. The company’s initial investment will support construction of a state-of-the-art, 450,000-square-foot paper mill that will manufacture 100% recycled products. Company leaders expect additional future investment to construct a 700,000-square-foot corrugator plant to produce corrugated sheet and boxes, including pizza boxes and packaging for major distributors and big box stores, using paper sourced from the new paper mill.
Pratt leadership anticipates construction of the roughly 120-job paper mill will begin in March 2022, with completion slated for fall 2023. The corrugator facility is expected to be completed by the end of 2026 and employ approximately 200 people once fully operational. Company leaders also expect the project to contribute to approximately 700 construction jobs over the coming years.
The new location builds on Pratt’s existing presence in the commonwealth, which includes a Pratt Display manufacturing plant established in Hebron in 2011 that employs over 200 Kentuckians.
“The paper mill will be the world’s most advanced, environmentally friendly 100% recycled paper mill,” said Anthony Pratt, executive chairman of Pratt Industries. “This $400 million green manufacturing investment began in Gov. Beshear’s office in April 2021. He was so welcoming and enthusiastic about the opportunity, and the speed with which he has moved – and the enthusiasm and professionalism of the Kentucky team – really encouraged us to make this investment in American green infrastructure. It is the single biggest investment our company has ever made and will create 1,000 jobs, including well-paying, American, green-collar manufacturing and construction jobs. We see further investment potential in this dynamic state, and Gov. Beshear’s leadership has made Kentucky a great place to invest in. I believe in regional manufacturing. It’s the heart and soul of America and there is no better place than Kentucky.”
A division of Conyers, Georgia-based Pratt Industries Inc., Pratt Paper produces lightweight, high-strength containerboard and corrugated board sourced from 100% recycled products. Currently, the company operates paper mills in Georgia, Indiana, Louisiana, New York and Ohio. Established more than 30 years ago, Pratt Industries employs more than 10,000 people in nearly 30 states. Pratt Industries is a sister company to Australia-based Visy, which was founded in 1948 and employs around 7,000 people in the Australasia region.
Pratt’s new operation will support Kentucky’s thriving logistics and distribution industry, which employs nearly 80,000 people at 590 facilities statewide. Due to online ordering throughout the pandemic, warehouses and shippers saw surging demand and expansion opportunities. In the past 12 months, distribution and logistics companies committed to creating nearly 2,000 full-time, Kentucky-resident jobs over the coming years with 34 facility expansions and new-location projects statewide. Those projects include nearly $285 million in private-sector investment in the commonwealth.
Pratt’s investment and planned job creation builds on recent economic momentum in the commonwealth, as the state builds back stronger following the effects of the pandemic.
Earlier this month, thanks to strong fiscal management by the Beshear administration, the state budget office reported the commonwealth ended the 2021 fiscal year with a general fund surplus of over $1.1 billion – the highest ever in the commonwealth – and a 10.9% increase in general fund receipts to $12.8 billion.
With today’s announcements, Kentucky’s year-to-date private-sector new-location and expansion figures include $2.6 billion in total planned investment and the creation of 5,500-plus full-time jobs across the coming years. Through May, Kentucky’s average incentivized hourly wage is $23.15 before benefits, a 4.7% increase over the previous year.
In May, Moody’s Analytics published a positive economic outlook for Kentucky, noting mass vaccination as the driving force behind a sustained recovery in consumer services. The state’s recovery, Moody’s said, benefited from earlier reopening efforts and increased demand for manufactured goods over services. The report also found Kentucky’s manufacturing industry outperformed the nation’s since the national downturn last year.
Fitch Ratings in May improved the state’s financial outlook to stable, reflecting the commonwealth’s solid economic recovery. The state’s April sales tax receipts set an all-time monthly record at $486.5 million, as did vehicle usage tax receipts at over $64 million.
In March, Site Selection magazine’s annual Governor’s Cup rankings for 2020 positioned Kentucky atop the South Central region, and third nationally, for qualifying projects per capita. The commonwealth also placed seventh overall in total projects, the highest of any state with a population under 5 million. Site Selection also recently placed Kentucky in a tie for fifth in its 2021 Prosperity Cup rankings, positioning the state among the national leaders for business climate.
State Rep. Jonathan Dixon, of Corydon, said the Pratt Paper project will have a positive impact on the region well into the future.
“This is extraordinary news for Henderson County and our entire region. I welcome Pratt Paper to our community and know they’re going to find it a great place to live and work,” Rep. Dixon said. “I appreciate the state’s efforts to bring Pratt to Kentucky, and we all have to recognize that our local economic development team has delivered in a big way. Today’s announcement is about more than jobs and investment, it is about a historic chance to grow opportunity for generations to come. We can certainly all agree that we want our community to be the kind of place our children want to raise their children – and opportunities like this one are critical to making that happen.”
Henderson County Judge/Executive Brad Schneider thanked the company for its commitment to the Western Kentucky community.
“It’s hard for me to adequately express how thankful Henderson County is for Pratt Industries’ faith in our community. This new plant is a revolutionary addition to the impressive list of manufacturers who make their products here,” Judge/Executive Schneider said. “We welcome Pratt with open arms and look forward to helping its team settle into its new Kentucky home. And huge thanks, as well, to all the local partners who brought this project to fruition. When we work together, as was the case with Pratt, the sky is the limit for Henderson County’s future.”
Henderson Mayor Steve Austin said the project required a team effort to realize.
“It is nearly unbelievable the time, effort and amount of work our economic development team, the City of Henderson and its utilities, and Henderson County did over a three-month period to secure this major win,” Mayor Austin said. “Henderson was in competition for the industry location with at least six other prospects. Hard work and determination paid off in the long run. It is the biggest win Henderson has experienced in decades. Three loud cheers for all involved!”
Missy Vanderpool, executive director of Henderson Economic Development, said Pratt will be an ideal fit to help drive the local economy forward.
“Our community is both deeply honored and humbled at being chosen for Pratt Industries’ latest facility,” Vanderpool said. “This major project will bring many construction jobs to our town, as well as many new career opportunities for our citizens. The economic impact will be felt by our entire community. Henderson’s manufacturing roots run deep and we look forward to Pratt planting theirs here. We would also like to thank all the community partners, both local and state, that worked tirelessly to see this project come to fruition. Collaboration plus trust equals success.”
Tom Williams, general manager of Henderson Water Utility, noted the company’s commitment to sustainability.
“We have been impressed with Pratt Industries every step of the way. They are a world-class company and we are excited to welcome them to Henderson, Kentucky,” Williams said. “They care about our environment and it is evident in their sustainability initiatives. They are a great fit for Henderson and Henderson Water Utility.”
The Henderson site selected by Pratt also represents a success for Kentucky’s Product Development Initiative (PDI). The site was among those to receive funding during the program’s first round in 2019. PDI was established through a partnership between the Kentucky Cabinet for Economic Development and the Kentucky Association for Economic Development to provide competitive grants to Kentucky economic development organizations and local governments to supplement site and building improvement projects. PDI aims to create jobs and corporate investment by enhancing the quality and quantity of Kentucky’s available sites and buildings. As well, it encourages collaboration among Kentucky economic developers and stakeholders to help new and expanding businesses quickly find suitable locations in Kentucky.
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 $14 million in tax incentives based on the company’s investment of $400 million and annual targets of:
Creation and maintenance of 321 Kentucky-resident, full-time jobs across 15 years; and
Paying an average hourly wage of $39 including benefits across those jobs.
Additionally, KEDFA approved Pratt for up to $3.5 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, Pratt can receive resources from the Kentucky Skills Network. Through the Kentucky Skills Network, companies can receive no-cost recruitment and job placement services, reduced-cost customized training and job training incentives.