Alcan to get new furnace: Beshear says $37 million project to retain 488 jobs

Against the backdrop of heat shimmering from a vast underground furnace, officials of Rio Tinto Alcan on Thursday announced that the company will proceed with a $37 million investment that they said will help preserve the 488 jobs at the Sebree aluminum smelter.

The company will install a new bake furnace inside Building 261, a cavernous building that stretches longer than two football fields.

At temperatures reaching up to 1,900 degrees Celsius （3,500 degrees Fahrenheit）, the furnace will bake 1,600-pound blocks of coke and petroleum pitch into giant electrical anodes that are used in the aluminum smelting process. The smelter produces 3,000 such anodes every week.

Replacing the nearly 40-year-old existing furnace will help the Sebree smelter better compete with newer, more efficient smelters around the world, the company said. Completion is expected by August.

"The new bake furnace is important for the future of our plant and a safer operation," Stephane Leblanc, Sebree's plant manager, said in a statement.

"Without it we would have to shut down the plant or buy anodes on the market. The investment will open the door to move forward with other projects that will make the plant more sustainable for the coming years," Leblanc said.

At a ceremony before more than 100 plant workers, elected officials and local business leaders, Gov. Steve Beshear said Rio Tinto Alcan's announcement is "exciting news for the community and the entire region."

"We're going to retain nearly 500 jobs here," Beshear said.

"This is one of the largest employers in this area," he noted. "There is nothing more important for families than a steady job and reliable income."

The rebuild of the vast below-ground furnace -- stretching 445 feet long and 100 feet wide -- is part of $50 million in modernization and improvement projects that Rio Tinto Alcan is pursuing at Sebree. The company also plans an upgrade in the smelter's potlines that, by boosting electrical amperage, will increase productivity.

The Kentucky Cabinet for Economic Development has approved $15 million in state corporate income tax incentives toward the Alcan investments.

"This plant is only one of a handful of aluminum smelters still operating in the United States," the governor noted Thursday. "It's an important part of Kentucky economic landscape. We're pleased that state government was able to step up and partner with Alcan."

Beshear said that without an overhaul to the state's economic development incentive program that he pushed for and that was passed by the state legislature in 2009, "we would not be standing here today."

The new incentives "allow the state to not only work with new companies that we're trying to attract … but also allow us to work with good Kentucky corporate citizens, our existing companies, that are looking to reinvest and to expand their operations," he said. "Before, we really had no tool to work with our existing businesses."

In the 18 months since then the incentive overhaul, existing industries have announced nearly $2.2 billion in investments expected to save 4,800 jobs -- including the nearly 500 at Alcan -- and potentially create 15,000 new jobs, the governor said.

Beshear credited state Sen. Dorsey Ridley of Henderson and state Reps. David Watkins, John Arnold and Jim Gooch for their support of the legislation.

The governor also thanked Henderson County Judge-executive Hugh McCormick, Henderson Fiscal Court and the Northwest Kentucky Forward regional economic development organization and its chairman, Garland Certain, for their work on the Alcan investment.

"This will definitely improve the conditions of our area," Certain said.

Meanwhile, Rio Tinto Alcan Vice President Guy Authier, visiting from the Alcan headquarters in Montreal, thanked Northwest Kentucky Forward President and CEO Kevin Sheilley; Economic Development Secretary Larry Hayes; and state business development specialist Patty Lockhart for their efforts.

"They began working with us more than one year ago," Authier said.

"We also want to thank our employees," he added. "They are some of the best and most knowledgeable workers in the aluminum industry."

"I also want to thank the late Sandy Watkins," the former Henderson County judge-executive who died suddenly last August, Authier said. "He was instrumental" in pushing for this investment.

"We're so proud to be a part of it," Henderson County Magistrate Bruce Todd said. He represented Judge-executive Hugh McCormick, who was in Frankfort for a ceremony honoring Watkins in the state House of Representatives.

Later, Northwest Kentucky Forward's Sheilley said his organization remains committed to helping existing industries.

"When I was hired 5 1/2 years ago, this board made it very clear that existing industry be treated as a top priority, not as a stepchild," he said.