Gov. Andy Beshear and local officials on Wednesday made the biggest economic development announcement in Henderson in a quarter-century — and one of the most significant in generations.
They announced that the multi-billion-dollar packaging and recycling firm Pratt Paper LLC will construct a $400 million corrugated box recycling and paper mill complex that within five years is expected to employ 321 people at wages averaging nearly $30 per hour. Compensation will total an average of $39 per hour, counting fringe benefits.
“For today’s big economic development announcement, and this one is a blockbuster: it is the largest jobs announcement, we believe, in Western Kentucky in 25 years,” Beshear said during his Team Kentucky Update on Thursday morning, hours before a news conference here.
“Today is a great day as we welcome a significant commitment to the future of our state and our people, the governor said. “It is a major commitment both to our talented workforce and to the sustainability of the commonwealth.”
Pratt’s operation will cover 1 million square feet — twice as large as the Columbia Sportswear distribution center near Robards —and sit on a 200-acre site along the Kentucky 425/South Bypass between U.S. 60-West and U.S. 41-Alternate.
Beshear said Pratt officials believe the project will require 700 construction workers.
Missy Vanderpool, executive director of Henderson Economic Development, said Pratt represents the largest number of employees for a new industry here in more than 25 years, since the recruitment of the Hudson (now Tyson) Foods poultry processing complex in 1995, and the largest capital expenditure by a new industry “in at least two generations,” dating back to the landing of Anaconda (now Century) Aluminum in the early 1970s.
“Pratt Industries is the type of company any community would want to be a part of its corporate sector, its industrial sector,” Henderson County Judge-Executive Brad Schneider said. “They’re first class, and what the contingent (of Henderson and Frankfort officials) that went to Wapakoneta, Ohio, (in June) to tour a facility that is similar to this facility, we were blown away — blown away by their technology, by the speed at what they do what they do, the quality, the caliber of the employees. It’s a preferred employer; there is practically no turnover.”
“We’re ecstatic on multiple levels,” Schneider said during a virtual meeting Thursday morning with the Kentucky Economic Development Finance Authority, which approved state incentives for the project.
“This is the kind of company that Kentucky needs, every day of the week if we could get it: high-tech, great-paying jobs, a product that has no runway end in sight and a great team of people who are very community-minded,” he said.
“It is nearly unbelievable the time, effort and amount of work our (Henderson) Economic Development team, the City of Henderson and its utilities and Henderson County did over a (four)-month period to secure this major, major win,” Mayor Steve Austin said.
“I know Henderson was in competition for the industry location with at least six other (community) prospects,” Austin said. “Hard work and determination paid off in the long run. It’s the biggest win-win Henderson has experienced — probably topping Anaconda Aluminum (now Century), Tyson and MacMillan-Bloedel (now International Paper).”
“We’re real excited to become new neighbors here,” Ed Kersey, who will serve as general manager of the Henderson complex, told the KEDFA board. “We’ve got a long track record of successful projects and this will be yet another one …
“We’re ready to kick it off,” Kersey said. “It’s going to be our flagship facility This will be probably be the biggest and best one we’ve done yet. We’re happy to be here.
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What is Pratt?
Pratt Paper is part of Pratt Industries, which describes itself as “America’s fifth-largest packaging company and the world’s largest, privately held 100% recycled paper and packaging company, with more than 10,000 highly-skilled, green-collar employees dedicated to the environment and sustainability.”
Pratt posted sales of $3 billion in the U.S. in 2019, according to a 2020 article in the trade publication PPI Pulp & Paper Week. That represented a three-fold jump in revenues in just eight years.
Among its major customers are Amazon, the U.S. Postal Service, Procter & Gamble and The Home Depot.
“Each year, The Home Depot sells approximately 80 million moving and storage boxes,” the home improvement supply company declared in a blog post at its website. “Every one of those boxes is made by Pratt Industries, and every product made by Pratt is made with 100 percent post-consumer recycled content.”
Pratt Industries was founded in the U.S. more than 30 years ago, and today operates facilities in 27 states, including five 100% recycled paper mills in Conyers, Georgia; New York City; Shreveport, Louisiana; Valparaiso, Indiana; and Wapakoneta, Ohio.
The Henderson mill would be Pratt’s sixth; the company’s executive chairman said he hopes to eventually operate 12 in the U.S.
Pratt’s specialty is producing boxes from lightweight containerboard that it says helps “an increasing number of companies meet their sustainability goals without sacrificing their high-performance packaging requirements.”
“I … believe corrugated boxes, and all packaging, will continue to light-weight itself so there’ll be less and less packaging and it will be reduce and recycle,” Anthony Pratt, the company’s executive chairman, said in an interview with Bloomberg in June.
“I see us as bringing technology to recycling,” he said. “We’re the Tesla of packaging,”
Pratt Industries is based in Georgia, although its executive chairman, Anthony Pratt, lives in Australia.
Pratt is affiliated with Visy Industries, an Australia-based company that says it is a global leader in the packaging, paper and recycling industries, producing and recycling paper and cardboard, aluminum and steel cans, plastic containers and other products.
Visy traces its history to 1948 in Melbourne, Australia, and has been run by three generations of Pratts: Leon, Richard and now Anthony. The Australian Financial Review this year ranked Anthony Pratt and his family as the fourth-richest in that country with just over $20 billion in wealth.
The Henderson project
Construction on the Henderson operation is scheduled to begin in September. Pratt will first build a mill that will recycle used corrugated containers, dissolving (or “repulping”) them into a slurry and then making new containerboard on a large paper machine that will be manufactured in Finland. When the mill starts operations in the third quarter of 2023, it will employ approximately 100 to 120 people.
That will be followed by construction of a corrugating plant that will manufacture corrugated shipping boxes from the recycled containerboard. By sometime in 2026, Pratt is expected to be at full production and employment.
The location is part of the 300-acre Henderson Bypass Rail Site, located along a CSX branch rail line and one of only three CSX Select Sites in Kentucky. Its proximity to multiple transportation options — being on a branch rail line and located less than four miles from Interstate 69 and the Henderson County Riverport, through which some product will arrive — was crucial to landing Pratt, Vanderpool said.
Henderson Economic Development holds an option to acquire 298 acres of the Henderson Bypass Rail Site property, and the city has entered into a buy-sell agreement to acquire that property after the Pratt announcement was made official.
The city will hold title to the 200-acre Pratt property for 20 years, until the company’s industrial revenue bond for the plant construction is retired. Vanderpool said that arrangement is similar to those from some past industrial recruitments, including Columbia Sportswear and what is now International paper.
The city has started the process of requesting that 322 acres be annexed into the city. The Henderson City-County Planning Commission staff is recommending that in conjunction with that, the zoning be reclassified from County Heavy Industrial District to City Heavy Industrial District.
The planning commission will conduct an in-person public hearing at 6 p.m. next Tuesday, Aug. 3.
The city will hold 98 acres adjacent to the Pratt site for future economic development.
How it came here
Vanderpool, who became executive director of the newly formed Henderson Economic Development (HED) organization 18 months ago, said the recruitment of Pratt here began with a phone call March 30.
A Kentucky Cabinet for Economic Development project manager called to ask if Henderson could accommodate a new industry that would be a very large water user, consuming 1.3 million gallons per day.
“I was sitting with (Henderson Water Utility General Manager) Tom Williams at a planning commission meeting” when that call came, she said. “I whispered to him, ‘Can we serve this?’ He said yes. And then he said, ‘This is the one.’”
The hunt
Henderson had just one day to submit a formal proposal, pitching the site here, Vanderpool said. “It was a whirlwind,” she said. “… Every step went fast.”
Indeed, she said it was for a time nicknamed “Fast and Furious.”
As Tony Krampe, who chairs the Henderson Economic Development board, put it: “This project came in hot.”
Within just a few days, Vanderpool and other local officials conducted a virtual visit with representatives of the company — whose identity was still a secret — and its site selection consulting firm, followed by a visit to the prospective plant site in later April. While the company and consultant representatives were here, visits to five existing industries were arranged for them so they could gauge the local industrial environment.
“There were many obstacles: infrastructure, the utility demand” — Pratt will become the largest consumer of water from Henderson Water Utility and a sizable power customer for Kenergy Corp. — “and the upgrades needed to current (utility) infrastructure,” Vanderpool said.
As is common with large industries, “Pratt had a site selection consultant,” she said. “We worked with Deloitte. They told us, their job is to eliminate communities, not accept sites, and we refused to be eliminated.”
There were numerous internal meetings between the HED staff and local officials, particularly City Manager Buzzy Newman and Henderson Water Utility General Manager Tom Williams, whose assistance Vanderpool said was crucial.
“Buzzy saved this project twice,” she said.
Learning about Pratt
A delegation from Henderson and Frankfort in June visited the Pratt plant in Wapakoneta, Ohio. The group included Vanderpool; Schneider; Williams; City Manager Buzzy Newman; Whitney Risley, Henderson Economic Development’s director of existing industry and workforce development; Kristina Slattery, deputy commissioner for the Kentucky Cabinet of Economic Development; and cabinet project manager Brittany Cox.
Vanderpool and Schneider said they were impressed by what they saw there.
“I am an observer of people,” she said. “When you walk through a plant or facility and watch people and see how they react to their boss and see them salute or fist bump their big pos sir give them a pat on the back, you know it’s a quality company.”
Additionally, Vanderpool said, “It’s a very clean facility — bright and comfortable.”
“I’m told this facility will be one-third bigger than Wapakoneta,” Schneider said. “The plant at Wapakoneta is spotless. You could eat off the floor. It’s impressive. At night it’s impressive. Something built like that in Henderson County will be not only be impressive to (future industrial) prospects, but a showplace.”
Landing it
“We were able to provide solutions to the company in a quick amount of time and move on to the next thing,” Vanderpool said. “That happens because of collaborative relationships. You add a component of trust.
“We want the best for our community,” she said. “The only way that happens is collaboration. No one government, no one entity, can make it happen. It takes an army. I used to say a ‘team,’ but it takes an army to pull this together.”
“From start to finish” — from that initial phone call to Thursday’s announcement — “it was four months, almost exactly,” Vanderpool said.
Early work
Krampe, the economic development chair, said credit also should be paid to groundwork laid in prior years.
That includes the former Kyndle economic development organization identifying the property along Kentucky 425 — especially with its proximity to I-69, the CSX branch line and the riverport — as being attractive for new industry more than three years ago and working with the Pritchett family, which owns the property, to secure options for its purchase.
That included the securing of a $175,000 grant last year from the Kentucky Economic Development Finance Authority (KEDFA) board — in a new program called Kentucky Product Development Initiative (PDI) — for extending Henderson Municipal Gas natural gas lines approximately 4,400 feet from an existing line on U.S. 60-West to the Henderson Bypass Rail Site. That project involved $175,000 in matching funds or in-kind services from the city and county.
Further, Krampe said, “We spent probably $150,000-plus in necessary infrastructure – reports, studies, geotech that are required to get a site kind of teed up so it has all that done so when someone comes along, they say, oh you’ve got all this done.”
“The more of that was done, (the more) we had a golden carrot out there” to entice prospects, he said.
Accolades
“Something like this requires so many people, so much communication, so much working together, checking egos at the door, that kind of things,” Krampe said.
“It cannot be overstated how key the work of Missy Vanderpool and Whitney Risley and their team at Henderson Economic Development was in getting this done,” Schneider said. “The city, the county, Henderson Economic Development, the utilities and Kentucky Economic Development all worked hand-in-glove with this thing. I was proud to be a part of it and all of Henderson County should be proud of how well we worked together to provide Pratt what it needed.
“But the key to all of that was the work of two amazing ladies,” Schneider said. “And to Missy Vanderpool, a year into her job and a year in (her involvement with) economic development, for her to do everything she did, was truly impressive. As a former economic developer (at the former Kyndle), for what she did through sheer determined and dogged effort to keep it moving, is truly impressive. Whitney, too.”
Vanderpool, whose professional work before coming to Henderson Economic Development included working as a Realtor and as association executive for the Henderson-Audubon Board of Realtors, came to the job with essentially no economic development experience.
“We got a lot of criticism, because people said, ‘You’re going to get someone with economic development experience, right?’” Krampe said.
But after Union, Webster and McLean counties withdrew economic development funding from the former Kyndle organization and it was split up in early 2020 into the Henderson Economic Development and the reformed Henderson Chamber of Commerce, “We couldn’t afford” an experienced economic developer, he said. “We got somebody with more passion and drive for our community. I think we definitely hired the right person at the right time with Missy. She and Whitney gelled immediately.”
“When you don’t know what you’re doing, but you’re doing it for the right reason, God takes care of you,” Vanderpool said.
As for her self-described “partner in crime,” Vanderpool said: “Whitney is a huge asset to this organization. We complement each other well. We’ve been able to form a great relationship. She has strengths I don’t have and maybe I have strengths she doesn’t have. But she’s a rock star.”
“Missy has the ability to come across very quickly as sincere, genuine, but she won’t cave to political pressure as easily as some people may,” Krampe said. “She can be thick-skinned when she needs to and she can push back in a polite way that doesn’t come across as abrasive. Whitney has knowledge and connections with existing industries and with the Cabinet (for Economic Development). She was able to get Missy acclimated …
“They’re on the same wavelength, personality-wise and passion-wise. They work well together.”
Krampe said the support and commitment of the Henderson Economic Board was also vital. “We’ve got a really good board and we’ve got a great executive director who works well with Whitney,” he said.
“None of this would have happened without a lot of work from a lot pf people, and a lot of in-kind work” from the Qk4 Inc. engineering firm as well as others who provided legal work and other guidance, Krampe said.
“A lot of people worked” to bring Pratt here, he said. “It wasn’t just by chance. We were fortunate to have them in our community. I just get to be the lucky one in the chairman position.”
Secondary benefits
Vanderpool said Pratt will benefit the community and region beyond its core recycling and manufacturing operations.
The company will likely hire truck drivers from this area. “There will be over 100 inbound and outbound trucks per day,” she said.
Vanderpool said Pratt operates on a “wheel and spoke” basis.
“This will be the wheel,” she said. “There will be other facilities that will locate in the region,” such as satellite box factories and operations that will market Pratt’s products, from boxes complete with customer logos and other printing to corrugated retail displays and end caps.
Additionally, Pratt manufactures boxes with the help of molds. “They will use local companies” for the building of such molds, Vanderpool said. “They will be contracting with local tool-and-die places for molds. I think they will be a good community partner.”
“The secondary industries, the vendors” that will follow will further the benefits to the Henderson area, Schneider said. “I think they truly make an impact on our region. It’s just a great day.”
“And it turns out they have a product that Covid proved we need more than ever” to meet the demand for consumers to have products shipped directly them, Schneider said. “I don’t think that demand (for corrugated boxes) is going away. It’s one reason Pratt is expanding.”
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