Why build aluminum mill in Ky.?

In response to rising auto industry demand for aluminum vehicle content, Braidy Industries Inc. said last year it will invest $1.3 billion to build an aluminum rolling mill in Ashland, Ky., on the state's northeastern edge.

The mill construction project is the first for Braidy CEO Craig Bouchard, and it is the first greenfield aluminum rolling mill to be built in the United States in more than 40 years. It will start supplying aluminum sheet to automakers by 2020. The planned plant capacity is already sold out.

Ashland sits in a rural coal mining area, but applications for the automotive supplier jobs have been coming in furiously, Bouchard said. The CEO told Automotive News correspondent Stephanie Hernandez McGavin why he decided to get into the aluminum business — and why he set it up in Kentucky.

Q: A lot of aluminum activity has been going into Kentucky. Why?

A:The reason is logistics. Northern Kentucky is somewhat equal distance between Detroit and the automakers in the Southeast. So if you drew a circle around Ashland with 250 miles being the distance to any part of the circle, we reach half of the automaking capacity. We can put a coil of aluminum in the truck in the morning, send it to Detroit or south, and deliver the coil midday. And we can load up that truck with scrap and have the scrap back in our furnace that night.

When you deliver a coil of aluminum sheet to an automaker or a stamper, 35 to 40 percent of that coil will come back in scrap. So how you handle the scrap for the automaker determines your operating margin and determines their cost structure.

You had a lot of cities vying for your investment — why Ashland?

Ashland is on the edge of Appalachia — which is not the wealthiest place in the world. But there's a group called the Ashland Alliance that had done a report on labor that proved to us there were eight times more metal-working families in this general geographic area than anywhere else in the United States. And they were ready to work, meaning the unemployment level was high among them. All the coal miners are still there, and they are very skilled people in safety and operations. So there's a lot of energy and expertise in the area.

For our 600 full-time jobs in the mill, we've had 5,500 job applications already. Anywhere else, we would've had to go steal the 600 people from other companies. In Ashland, they're just knocking down the door to come work for us.

Do you plan to hire additional workers?

Since we chose Ashland, roughly 10 companies have come in and are in the process of building or negotiating to build around the mill. Metalworking companies of one sort or the other. But we're going to be so big with so much activity around us that I think our 600 jobs are going to be matched by about 2,500 additional jobs.

Have you started taking orders yet?

Our mill is now 180 percent sold out from day one through the first seven years of its existence — 300,000 tons of sheet is what we're producing in our Phase 1. Six of the largest OEM automakers are part of that founding customer base.

How did you know there would be such immediate demand for aluminum?

There's a shortage of high-quality, series-6000 aluminum to serve the automotive industry. That's what they need to design their cars to replace steel with aluminum — you can't spec a car and design it unless the metal is available.

There's also a shortage of high-quality, pristine sheet aluminum that can go on the outside of cars and so we're making that. We choose our capacities, in essence, to match the demand-supply shortage that already exists in North America.

This is your first aluminum mill. How much confidence does it take to invest so much in your "first" anything?

It's a process. It starts with an idea. There are thousands of great ideas each day, and only a few turn into companies. But you have an idea, and then you get a team of people who believes in that idea, and they have a great sense of hope around that — which is the most important quality. When you believe and start hoping, at some point, it turns into a state of determination: We're going to make this happen.