Kentucky taxpayers' share of aluminum plant company will shrink over time, CEO says
Kentucky taxpayers own at least 20 percent of Braidy Industries -- the company that plans to build a $1.3 billion aluminum mill in the Ashland area -- but the state’s share of the company will become “much, much smaller” over time.
LOUISVILLE, Ky. (WDRB) – Kentucky taxpayers own at least 20 percent of Braidy Industries -- the company that plans to build a $1.3 billion aluminum mill in the Ashland area -- but the state’s share of the company will become “much, much smaller” over time, Braidy Industries CEO Craig Bouchard said Thursday.
In an interview, Bouchard acknowledged “some controversy in the state” about Gov. Matt Bevin’s decision earlier this year to invest public money in the company.
But Kentucky’s purchase of $15 million of Braidy Industries’ stock was necessary to overcome an “enormously better” incentive offer from a neighboring state governor who also wanted to land the aluminum plant, Bouchard said.
“Skin in the game is important to us,” Bouchard told reporters following a speech to the Louisville Rotary Club. “…Then you are all in the same boat; you are rowing together.”
Braidy Industries is on track to start construction of the 3 million-square-foot plant in Greenup County next spring and to open it in 2020, Bouchard told the Rotary Club audience.
The plant will employ about 600 people in “advanced manufacturing” roles with starting annual salaries of $65,000 while churning out aluminum at half the cost of the handful of competitors currently in the business, Bouchard said.
The company will also give 5 percent of its annual profit back to employees in bonuses while providing child care and a fitness center on site at the plant, Bouchard said.
“We are going to kill every single competitor to our company and we’re going to hire their best people,” Bouchard said.
In April, Bevin and Bouchard announced that Braidy Industries had chosen Kentucky for the plant, an economic development coup for the state. The state-owned Commonwealth Seed Capital bought the $15 million in stock a week later.
In June, a public document revealed that state taxpayers, through Commonwealth Seed, were either the biggest or second-biggest shareholder of Braidy Industries. Only the state and Bouchard own at least 20 percent of the company, according to the document.
Bouchard confirmed that on Thursday, but he said Kentucky’s share will be diluted as Braidy Industries accepts more funding and issues more stock in future rounds of investment.
Kentucky was one of eight “founding, initial investors” in Braidy Industries, he said.
He declined to say how much of the company Kentucky will eventually own.
“It depends on how much equity we take in in the end, but if I knew, I wouldn’t tell you, because we are a private company, not a public company,” Bouchard said.
Bouchard’s emphasis on the company’s private status was a reference a pending dispute in which WDRB asked the state Attorney General’s Office to review whether Braidy Industries’ records should be open to the public like a state agency because of the state’s investment in the company.
Last month the Attorney General’s Office sided with The Courier-Journal, which challenged the state economic development cabinet’s refusal to disclose the identities of Braidy Industries’ other shareholders. The cabinet vowed to take the case to court.
Bouchard declined to say how much capital Braidy Industries has raised so far, nor how much it hopes to raise. He said the $1.3 billion for the plant will come from investments like Kentucky’s $15 million and from debt raised by the company.