FRANKFORT, Ky. (May 17, 2023) – Today, Gov. Andy Beshear announced continued momentum in Kentucky’s manufacturing sector with a $51 million investment retaining over 400 jobs in Hancock County from Domtar Paper Co. LLC, a part of the Paper Excellence Group and currently the largest integrated manufacturer and marketer of uncoated freesheet paper in North America.
“Domtar Paper Co. has successfully produced sustainable paper in Kentucky for decades and is positioned for even more growth in the future with this modernization,” said Gov. Beshear. “I want to say congratulations to Domtar on this expansion and thank the company for its longstanding presence in the commonwealth. I’m excited to see the company continue to thrive and grow in Hancock County.”
The project, located at the company’s existing 50-year-old Hawesville mill, will upgrade the current pulper with a modern pulper to gain additional machine capabilities and better service growing markets. Leaders at Domtar plan to have the expansion fully operational by the end of 2025.
“Domtar is pleased to partner with the Kentucky Economic Development Finance Authority to support the Hawesville mill’s modernization, offering the ability to produce innovative fiber-based products that are growing in demand,” said Hawesville mill manager Murray Hewitt. “Additionally, it promotes stable employment and maintains the Hawesville mill’s standing as a pillar of the community that it has served for over 50 years.”
Founded in 1848 and celebrating 175 years of business this year, Domtar is a leading provider of a wide variety of fiber-based products, including communication, specialty and packaging papers, market pulp and airlaid nonwovens. With approximately 6,400 employees serving more than 50 countries around the world, Domtar is driven by a commitment to turn sustainable wood fiber into useful products that people rely on every day. The company’s principal executive office is in Fort Mill, South Carolina. Domtar’s Hawesville mill is an integrated pulp and paper mill that produces nearly 600,000 tons of fine specialty paper annually.
This expansion adds to Kentucky’s thriving manufacturing sector, which administration-to-date has seen 580 private-sector new-location or expansion projects commit to invest over $21.95 billion and create more than 29,000 jobs.
Hancock County Judge/Executive Johnny W. Roberts Jr. spoke on Domtar’s investment in the workforce.
“We are very thankful for Domtar’s continued commitment to Hancock County,” said Judge Roberts. “They have been a vital member of our community for many years. This announcement also confirms their confidence in our local workforce and will strengthen our industrial base for future generations.”
Hancock County Industrial Foundation Director Mike Baker highlighted Domtar’s presence in the community.
“The Hancock County Industrial Foundation is excited to see another investment in our local manufacturing sector,” said Baker. “Domtar is a leading corporate citizen of our community, and this investment is another step in their continued growth, success and sustainability. For over 50 years, they have been a leader in our manufacturing community, and this is another validation of the employees and this plant’s commitment to excellence.”
Domtar’s investment and job creation furthers recent economic momentum in the commonwealth, as the state builds back stronger from the effects of the pandemic.
Since the beginning of his administration, Gov. Beshear has announced the creation of 46,000 full-time jobs and more than 850 private-sector new-location and expansion projects totaling $25.9 billion in announced investments.
The Governor has now secured the best two-year period in state history for economic growth.
In 2021, the commonwealth shattered every economic development record in the books. Private-sector new-location and expansion announcements included a record $11.2 billion in total planned investment and commitments to create a record 18,000-plus full-time jobs across the coming years.
That momentum continued strongly into 2022 with 248 new-location and expansion announcements totaling 16,000 full-time jobs behind nearly $10.5 billion in new investment.
The robust job creation has been accompanied by rising wages across the commonwealth. The average incentivized hourly wage in 2022 was $26.78 before benefits, the second-highest mark since 2010 and an 11.5% increase over the previous year.
Gov. Beshear also announced the two largest economic development projects in state history. In September 2021, Gov. Beshear and leaders from Ford Motor Co. and SK Innovation celebrated a transformative $5.8 billion investment that will create 5,000 jobs in Hardin County. And in April 2022, the Governor was joined by leadership at Envision AESC to announce a $2 billion investment that will create 2,000 jobs in Warren County. These announcements solidify Kentucky as the EV battery production capital of the United States.
Kentucky’s success has been noted by both S&P Global Ratings and Fitch Ratings, which have upgraded the state’s financial outlook to positive in recognition of the commonwealth’s surging economy.
Site Selection magazine placed Kentucky second nationwide and first in the South Central region for its annual Governor’s Cup ranking for 2022, which recognizes state-level economic success based on capital investments.
Gov. Beshear’s administration is projected to post the four highest years of budget surpluses in Kentucky history, and the state’s rainy day fund has a record balance of $2.7 billion.
Gov. Beshear recently announced a new “Supply Kentucky” initiative with the goal of boosting job growth, reducing costs and providing more security in the supply chains of our Kentucky companies.
The Governor also recently announced that Kentucky set the record for the longest period with the lowest unemployment rates in state history. Over the past 15 months, the rate has been between 3.8%, the lowest rate ever recorded, and 4%, marking the longest period with the lowest unemployment rates in state history.
To encourage investment and job growth in the community, the Kentucky Economic Development Finance Authority (KEDFA) in April preliminarily approved an incentive agreement with Domtar under the Kentucky Reinvestment Act (KRA) program. The agreement can provide up to $1.2 million in tax incentives based on the company’s investment of $51 million and a 90% job retention rate.
Additionally, KEDFA approved Domtar for up to $100,000 in tax incentives through the Kentucky Enterprise Initiative Act (KEIA). KEIA allows approved companies to recoup Kentucky sales and use tax on construction costs, building fixtures, equipment used in research and development and electronic processing.
By meeting its annual targets over the agreement term, the company can be eligible to keep a portion of the new tax revenue it generates. The company may claim eligible incentives against its income tax liability and/or wage assessments.
For more information on Domtar, visit Domtar.com.
A detailed community profile for Hancock County can be viewed here.
Information on Kentucky’s economic development efforts and programs is available at CED.ky.gov. Fans of the Cabinet for Economic Development can also join the discussion at facebook.com/CEDkygov, on Twitter @CEDkygov, Instagram @CEDkygov and LinkedIn.
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