Thursday, Gov. Andy Beshear congratulated Neogen Corp., a leading manufacturer of animal and food safety products based in Michigan, on the relocation and expansion of its Lexington operation, a $6 million investment creating over 70 full-time jobs and furthering the Governor’s initiative to grow Kentucky’s agritech sector.
“Agritech is a growing and thriving sector here in Kentucky, and companies like Neogen expanding their operations adds to that growth,” said Beshear. “This project not only expands our argitech sector, it also is helping to grow our manufacturing and food and beverage industries. Neogen has operated in the commonwealth for over 30 years, and I want to thank the company’s leadership for continuing to invest in the Lexington community and growing their presence here in Kentucky.”
The project is converting 20,000 square-feet of unutilized floorspace into IOS 8-level manufacturing space at 1847 Mercer Road in Lexington. The investment will include building improvements and manufacturing equipment. The project will initially generate 40 new jobs in Kentucky and at least an additional 30 jobs over the next two-and-a-half years.
Neogen has operated in Kentucky since locating in Lexington in 1992 with the acquisition of ELISA Technologies. ELISA was formed in 1990 through a license agreement with the University of Kentucky to develop diagnostic test kits to detect abused and therapeutic drugs in racehorses and greyhounds. Lexington serves as Neogen’s Animal Safety headquarters, which has grown to employ 220 residents across two Lexington facilities and one location in Mt. Sterling.
This announcement comes just three weeks after the company made public its plans to invest nearly $10 million in its Mt. Sterling facility, creating 79 full-time jobs.
In 2020, Neogen’s Lexington operations stepped up in the face of the COVID-19 pandemic. Neogen increased manufacturing and distribution of critically needed biosecurity products, including disinfectants, cleaners and hand sanitizers while working closely with government agencies around the world to quickly approve products for use.
“Over the last 30 years, Neogen and the Lexington community have built a strong relationship, and we are proud to be strengthening our connection to the area as we grow as a company,” said Doug Jones, Neogen’s chief operating officer. “Our Lexington expansion is another step in supporting both our domestic and international growth plans, ensuring that people and animals around the world have access to products and solutions that keep them safe and healthy.”
Neogen, founded in 1982, is headquartered in Lansing, Michigan. Its animal safety division manufactures and markets a variety of animal health products, including diagnostics, pharmaceuticals, supplements, biologics, wound care, veterinary instruments, rodenticides, disinfectants and insecticides. The company employs more than 2,000 people worldwide, with 10 locations in the United States and 14 international facilities.
The expansion adds to Kentucky’s thriving food, beverage and agritech sector, which includes more than 200 agribusiness-related facilities and employs over 20,000 people statewide. Administration-to-date, new location and expansion projects within the industry are expected to create nearly 4,700 full-time jobs with over $4.5 billion in new investments.
The expansion also adds to the commonwealth’s manufacturing sector, which includes more than 5,000 facilities and employs over 250,000 people statewide. Administration-to-date, more than 550 new location and expansion projects within the industry are expected to create nearly 26,000 full-time jobs with over $18.6 billion in new investments.
Lexington Mayor Linda Gorton spoke about the high-quality jobs Neogen is providing in Lexington.
“Neogen has thrived in Lexington,” Mayor Gorton said. “The company provides high-quality jobs to our highly educated workforce. With our vibrant agriculture sector, and agriculture education and research at the University of Kentucky, Lexington is a natural home for agribusinesses.”
Commerce Lexington President and CEO Bob Quick expressed excitement for Neogen’s growth in agritech.
“Our economic development team has been proud to work with Neogen since they opened here in Lexington many years ago,” said Quick. “It’s been exciting to see Neogen’s continued growth as it strategically utilizes its partnership with the University of Kentucky, collaborates with businesses that align with its focus in agritech, and provides solutions and services for the food processing, animal protein and agriculture industries. Congratulations to Neogen Corp.”
Neogen’s investment and planned 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, Beshear has announced the creation of 41,237 full-time jobs and 728 private-sector new-location and expansion projects totaling $22.89 billion in announced investments.
With the books closed on 2022, 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.
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. In addition, Site Selection magazine placed Kentucky at 6th in its annual Prosperity Cup rankings for 2022, which recognizes state-level economic success based on capital investments.
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.
To encourage investment and job growth in the community, the Kentucky Economic Development Finance Authority (KEDFA) today preliminarily approved a 10-year incentive agreement with the company under the Kentucky Business Investment program. The performance-based agreement can provide up to $800,000 in tax incentives based on the company’s investment of $6 million and annual targets of:
- Creation and maintenance of 72 Kentucky-resident, full-time jobs across 10 years; and
- Paying an average hourly wage of $23.34 including benefits across those jobs.
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.
In addition, Neogen can receive resources from Kentucky’s workforce service providers. Those include no-cost recruitment and job placement services, reduced-cost customized training and job-training incentives.
Categories: Kentucky, Business