Aluminum - A Signature Industry

An important milestone was achieved this week in KAN's mission to get recognition for the aluminum industry as one of Kentucky's "Signature Industries". While we at KAN have said it with regularity, it felt good to hear it mentioned, not once, but on numerous occasions by Senator Brandon Smith and other members of the Interim Joint Committee on Natural Resources and Environment.

Senator Smith joined Co-Chair Rep. Jim Gooch and most of their committee on Wednesday and Thursday when they convened their meeting at the Rio Tinto Alcan smelter in Sebree. This was the result of several conversations and coaxing by the key leadership at RTA and KAN supported the effort with letters to Co-Chairman Gooch.

A welcome reception held at Audobon State Park on Wednesday gave ample opportunity for one on one discussions about the challenges facing the aluminum industry. The 800 pound gorilla in the room was, of course, power rates, power rates, power rates! With pending Big Rivers rate cases before the PSC, the question looms large over the industry, power generators, residential class customers and elected officials.......how much, if any, increases can the smelters absorb and remain competitive or viable? Tough question but a question that was capably put to the committee on Thursday by RTA's Stephane Leblanc, Plant Manager. Excellent presentation that presented serious, timely and informative data on the realities of operating a primary smelter in the USA. And in equally serious fashion, the realities of failing to operate a smelter in the state of Kentucky. And with pinpoint focus, the challenges and opportunities for a pro-active role in controlling our economic destiny.

Past presentations to our legislators in the bubble of Frankfort have been effective and as we've said before, "they know who we are". But....there is no substitute for seeing it up close and personal. For those of us whose careers took place in the canyons and cathedrals of large aluminum rolling mills and smelters, the sights, sounds, smells of making aluminum are old hat. But.....for those who vote "yea or nea" on the issues that impact our industry, jobs, homes and families......yesterday it was up close and personal. Real sights, sounds, smells, and the real faces of Kentucky's aluminum industry!

I was privileged to participate and remind the committee of the "numbers" and the impact of aluminum on our economy. And on behalf of our KAN members, officers, and Board of Directors, I thanked the committee for making this valuable visit. I'm confident they found the discussions meaningful, the issues serious, the processes fascinating and the employees of RTA remarkable. And they probably won't forget the feel of a pot line in July in western Kentucky!

Our hat's off to Pam Schneider, Stephane Leblanc and the entire staff at Rio Tinto Alcan for this critical milestone in the mission to protect and sustain our Kentucky aluminum industry!

Energy and Aluminum

A funny thing happened in last month's Kentucky Association of Manufacturers energy conference. In the opening session, the first four speakers mentioned "aluminum" in their remarks. That's a reasonable assumption to those of us long involved in the industry. With 400 MW smelters and mega-mcf' users of natural gas, energy is the 400 pound gorilla in the aluminum manufacturing arena.

The take-away here is that Governor Steve Beshear, Secretary Len Peters, Energy and Environmental Cabinet, House Majority Floor Leader Rocky Adkins, and Paul Cicio, President of Industrial Energy Consumers of America ALL mentioned aluminum as a critical stakeholder in Kentucky's current and future energy policies, practices, and resources. This fact was not lost on a couple of seasoned lobbyist who were in attendance. As they pointed out to me, probably wouldn't have happened in a forum like this a year earlier.

In the first meetings of KAN, Kentucky Aluminum Network, there was interesting debate over the mission and objective of the newly formed industry association. Awareness and advocacy emerged as the top goal. While the work is never done and the network continues to evolve, I felt a strong sense of satisfaction upon hearing these key speakers include aluminum in making their case for sensible, cost effective, and sustainable energy policy for manufacturers in Kentucky.

With our continued presence in Frankfort at the committee witness table, in the offices of legislators, or at the podium in key news conferences, more and more of the state's policy makers and elected officials know who we are!

Be it energy consumption, employees, tax contributions and economic impact, aluminum is the 400 pound gorilla in the room, and yes, people are listening and yes, they know who we are!

Kentucky Association of Manufacturers April 20th Energy Conference, Louisville Galt House

Governor Steve Beshear, Energy Secretary Len Peters, Speaker Greg Stumbo confirmed to attend the upcoming conference.

Senate President David Williams, Ky Rep. Rocky Adkins, US Rep. Brett Guthrie, US Rep. Ed Whitfield and US Senator Rand Paul all invited.

See KAM link for full agenda.

http://www.kamanufacturers.com

Kentucky, The Aluminum Capital of the U.S ?

In a recent conversation with KAN's Vice Chairman, Kenny Barkley of Rio Tinto Alcan, Kenny opined that Kentucky might be the aluminum capital of the U. S. He further suggested, if so, wouldn't it be nice for the state to be recognized as such, and it could be formalized by proclamation of the General Assembly.

With that, the research began. While that work continues, the early evidence is very encouraging. No doubt, Kentucky is home to over 100 aluminum related facilities and the industry is represented in over 20 NAICS classifications. Millions in state and local taxes come from over 10,000 employees. No doubt, from scrap collection- processing, recycling-melting, casting, rolling, extruding, fabricating, coating and shipping, the metal is a leading economic engine in the Commonwealth.

Kentucky is no stranger to being "first". The state has been "first in" or the "only" in many categories over the years. A few interesting examples taken from the folks at 50 State. Com - Kentucky Facts and Trivia, might include such notable achievements as

1. The first Kentucky Fried Chicken restaurant was opened in Corbin Kentucky by Colonel Sanders.

2. The song, "Happy Birthday to You" was the creation of two Louisville sisters in 1893.

3. Ft. Knox holds more that $6 Billion in gold, more gold than anywhere in the world.

4. Pike County, not only is the home of the famous Hatfield-McCoy feud, but it is the world's largest producer of coal.

5. Thomas Edison first displayed his electric light to the public in Louisville in 1883 at the Southern Exposition.

6. The first enamel bathtub was made in Louisville in 1856.

7. Lexington was home of the first American performance of a Beethoven symphony in 1817.

8. Mary S. Wilson, a Henderson teacher, held the first ever observance of Mother's Day in 1887, later made a national holiday in 1916.

What do these factoids have to do with aluminum production in Kentucky? Nothing. But they might make interesting conversation when linked to the fact that Kentucky indisputably leads the nation in primary production. Latest information from Light Metal age.com indicate Century Aluminum in Hawesville and Rio Tinto Alcan in Sebree have combined active capacity that leads all states. Combine this production with the output of the rolling operations of Aleris in Lewisport and Logan Aluminum in Russelville, add the rod and cable production of Southwire in Hawesville, billet and alloyed product output of Hydro and Eastern Alloys in Henderson, liquid and solid aluminum sow and RSI of Aleris Morgantown, then add the production of producers Gibbs Die Cast in Henderson and Trace Die Cast in Bowling Green..........

Well, that's a lot of aluminum and that doesn't include the process output of our leading Scrap processors of the Kentucky Recyclers Association and many other smaller coating and fabricating operations!

In Primary production, Kentucky is king. Followed by Washington state. Washington state, home of four primary smelters. Two are dark and shut down and the other two have significant capacity idled. Leaving Kentucky as the no. 1 producer of primary metal in the United States. And, while the research and validation continues, adding the output of Kentucky's other aluminum producers to the smelters........I think we have it! We won't put it on the license plates yet but one could say Kentucky is big in aluminum......one might even say Aluminum is a "signature" industry in Kentucky!

As for Washington state. There are many complex reasons and business conditions that impact decisions on reduction and start-up of capacity in any state.

Oh, did I mention that Kentucky is No. "2" in the lowest industrial electrical rates in the U. S.!

In Kentucky, we make things! And we make a lot of Aluminum. Would you expect anything less of the state that served the 1st ever Cheeseburger in Louisville's Kaolin's Restaurant in 1934.

KAN welcomes new members SECAT, Inc. of Lexington, Ky. and Big Rivers Electric of Henderson, Ky.

SECAT provides an important research and development function for aluminum companies in Kentucky and across the nation.

Big Rivers is the wholesale electrical power generator for industry, businesses , farms and residents of 22 counties in western Kentucky.

Thanks to both these important organizations for their support of Kentucky's aluminum industry!

News conference opposing Senate Bill 151

Upcoming Energy Conference

Energy is the life's blood of the aluminum industry. KAN is supporting the Kentucky Association of Manufacturers upcoming Energy Conference, "ENERGY TODAY.....AND TOMORROW". The conference date is April 20th at the Galt House in Louisville.

Kentucky's two smelters, Century Aluminum in Hawesville and Rio Tinto Alcan in Robarbs are the leading users of electricity in the region's utility grid. The power needs of smelters and the associated costs are crucial to the future of the aluminum industry in Kentucky.

As electricity is to the smelters, natural gas is to the secondary producers who remelt millions of pounds of aluminum scrap, cast, roll and fabricate the metal into sheet, coil, billet and extrusions.

Energy, the heart of our manufacturing industry in Kentucky. Plan now to attend this important conference and be part of the conversation about energy today....and tomorrow!

KAN's mission is to promote the aluminum industry as a "Signature Industry" for the state of Kentucky by raising awareness of and addressing the challenges and opportunities facing this sector; and deliver important information about the industry to key stakeholders, policy makers, and leaders.

KAN's core issues include:

• Available cost effective Energy
• A fair and level playing field in Environmental Policy and Regulation
• Workforce Development training programs and facilities
• Facility Infrastructure renovation and updating

The Kentucky Aluminum Network is an association of aluminum producers, vendors and others who recognize the impact the industry has on Kentucky's economy, workforce, and manufacturing base in the state.

The Network serves as an advocacy group to inform our elected officials and the public of both the challenges and opportunities facing the industry. The industry supports over 14,000 jobs in Kentucky that generate $80-100 million dollars in local and state taxes.

Kentucky provides a unique location for the industry creating advantages such as the 2nd lowest electrical rates in the country and proximity to two-thirds the US population.