Steel industry and KES
Published 11:15 am Thursday, July 5, 2018
The good news for the Tri-State economy continued this past week with word that a plan by a company to purchase the Kentucky Electric Steel plant in Boyd County is gaining some momentum.
The purchase is not a done deal yet. However, there is a lot of optimism going around after we broke the story that the state of Kentucky gave preliminary approval for up to $1.5 million in tax incentives for a potential purchaser of KES. The proposed purchaser is identified in documents as SWVA Kentucky, LLC, dba as Kentucky Electric Steel. The deal the state gave preliminary approval is anchored upon a promise of a $6 million investment and, over time, 60 jobs for Kentucky residents. In return the state would offer up to $1.5 million in incentives through eight years in the form of tax credits of up to 100 percent of corporate income or limited liability entity tax liability rising from the project. Wage assessment incentives up to 5 percent of gross wages of each employee are also included.
The deal is incentive based. If the company completes a purchase and meets its stated goals the incentives will be available over time. if that doesn’t happen the incentives won’t be available.
First and foremost, this is great news for those who have worked at KES. If the deal is finalized 60 new jobs for local residents will be available. We already know that the region’s workforce is incredibly talented, hard working and possesses the unique skill sets necessary for this industry.
When we interviewed Ashland Alliance Chief Executive Officer Tim Gibbs we asked whether he thought the recently imposed steel tariffs played a role in a company’s stated willingness to look at purchasing KES. He said he believes the tariffs have played a positive role in this individual instance.
The truth of the matter is the jury is out on the tariffs and their true impact on both the steel industry, as well as other industries. Many of the reports you see about robust growth in the steel industry — and in contrast, the layoffs in other industries due to the tariffs — are filtered through political lenses. But one thing, in our mind, is clear: there is a renewed sense of optimism about American-made steel. That most certainly can’t hurt and a portion can be attributed to President Donald Trump’s attention to an industry and its workers. It is one that, for many, seemed to be largely forgotten until Trump took office.
There is a long way to go on this deal. It is not done. But here’s to more good news in the Tri-State and the hope that our local workers will soon be back to work doing what they do best at KES.
The Daily Independent of Ashland