Kentucky Draws Foreign Direct Investment

More than 400 international companies call Kentucky home. Under the leadership of Gov. Steve Beshear, the state has made attracting foreign investment and jobs a top priority.

On Wednesday, April 17, 2013 - 10:08

Kentucky has mastered the language of global business.

More than 420 international companies call Kentucky home, and under the leadership of Gov. Steve Beshear, the state has made attracting foreign investment and jobs a top priority.

“We live in a global economy now,” says Erik Dunnigan, commissioner of the Department for Business Development in the Kentucky Cabinet for Economic Development. “It’s no longer about reaching out to border states or even looking at a U.S. standpoint. It’s about looking for international companies that can compete on a global and national scale, and bringing them to Kentucky to create a more stable environment.“

A Global Presence

To facilitate this initiative, state officials created three international offices that work to recruit companies to Kentucky. The first was established in Tokyo, and Dunnigan says the first responsibility of its staff is to maintain relationships with Japanese-owned businesses that already have a Kentucky location. 

“When companies have to make decisions on where they want to make an expansion, it’s important to have that strong relationship in place, so they allocate capital to their Kentucky operations,” Dunnigan says.

The second responsibility of the international office staff is to get leads for new businesses. Kentucky also has an international office in Germany that is responsible for maintaining relationships with its 180 European-owned businesses. The third office is in Mexico, where staff also support Kentucky’s thriving export markets.

Importing New Opportunities

In November 2012, Gov. Beshear announced that iwis, a German automotive supplier, would open its first U.S. manufacturing facility in Murray, Ky. Dunnigan says iwis’s chairman and CEO chose Kentucky because of the relationship developed through the state’s international office in Hamburg.

“He was comfortable with Kentucky and with our ability to create friendship,” says Dunnigan. “For their first North American operation, they were looking for a comfort level. Our Hamburg office helped overcome language barriers and provides a person to call – someone in their own time zone.“ 

Nearly 30 percent of all capital investment and more than 23 percent of all jobs announced in 2011 in the state were a result of foreign-owned enterprises. The U.S. affiliates of foreign companies employ more than 89,000 people in the state, according to the Organization for International Investment. Foreign direct investment in Kentucky was valued at more than $28 billion in 2007, the last year for which statistics are available.

The depth and breadth of foreign-owned companies in the state is impressive. Japanese-owned Toyota Motor Manufacturing, which operates a massive assembly complex in Georgetown, has helped draw dozens of other automotive-related manufacturers, many of them foreign-owned. More than 150 companies in the state, employing more than 35,000 workers, are Japanese-owned.

In addition to Toyota, foreign-owned companies with operations in Kentucky include a wealth of well-known names, from L'Oreal to Borden to DHL, Hitachi and Panasonic. In Northern Kentucky, L’Oreal USA will hire 200 people over the next two years and invest $42 million in a new facility adjacent to its 560,000-square-foot Florence manufacturing facility. Currently its 217-person workforce makes shampoo, conditioner and styling products for Garnier, L’Oreal Paris and Soft Sheen-Carson.

Long-term Relationships

Bel Brands USA, a subsidiary of Paris-based Fromageries Bel, a world leader in branded cheeses, has been producing the Laughing Cow brand cheeses in Leitchfield for more than 40 years.

“Our business has more than doubled over the past five years, primarily due to the growth and popularity of the global brands we produce in Leitchfield,” says Bel Brands spokesperson Kimberly Mulcahy. “Bel Brands USA employs approximately 450 employees in Kentucky. Since 2010, we've added more than 100 new jobs and invested $16 million in our Leitchfield plant.”

Happy Newcomers

India-based Flex Film built its first North American flexible packaging company in Elizabethtown in 2011. The investment will eventually total $180 million and create 250 jobs. Flex Films considered eight states before choosing Kentucky.

“We were inclined towards Kentucky because of its location, and the support to move things quickly on priority were promised and later delivered,” says Peekay Kasturia, Flex Film vice president. “The people of Kentucky helped this project to be completed on time. We are happy with our decision.

“We hope industries all across the globe will see this successful venture and be more inclined to bring manufacturing back to the United States.”