Charleston West Virginia Economic Development

Discussions on Economic and Community Development in West Virginia and the Charleston MSA as well as issues of the Charleston Regional Chamber of Commerce.

Friday, January 02, 2009

The article below appeared in today's Charleston Daily Mail. The Charleston Area Alliance participated in the voting.

Top 10 business stories of 2008

by George Hohmann
Daily Mail Business Editor

CHARLESTON, W.Va. -- The national economy closed out 2008 with an avalanche of negative stories but the top West Virginia business story for 2008 is good news: The state finished the year with a budget surplus.

Unofficially, as of the close of business Tuesday, the state had a budget surplus of about $79 million, Mike McKown, director of the state budget office, said Wednesday.

"At the end of October we were up $99 million," he said. "At the end of November we were up $72 million. Certainly we are going to end the first six months (of the fiscal year) with a surplus. Which is good news."

In fact, West Virginia is among fewer than a dozen states that expect revenues to cover spending during the current budget year, according to an analysis released last month by the National Conference of State Legislatures.

Gov. Joe Manchin has said West Virginia will not get through the economic downturn unscathed. However, "you need to get up, work hard, enjoy your life - continue to live," Manchin said last month. "If things get too bad, turn off your television. The only thing that can make it worse is if we start believing what we see on television."

Other top 10 business stories for 2008, according to the Daily Mail's annual unscientific poll of editors and movers and shakers in the business world:

2. Century Aluminum must cut costs or close

Century Aluminum told its 685 Ravenswood employees on Dec. 17 that it was immediately shutting down one pot line and may shut down the entire plant in 60 days unless the price of aluminum stabilizes and the company is able to reduce costs.

At a Dec. 23 meeting with Gov. Joe Manchin, U.S. Rep. Shelley Moore Capito and others, Century executives said the company needs to cut costs by 20 percent to avoid shutting down by February.

Manchin said he plans to organize a joint state-federal delegation to meet with executives of the plant's corporate parent to show the support the plant has from all levels of government. Manchin said the delegation also hopes to discuss long-term solutions to modernize the plant to make it more competitive in the future.

3. MATRIC keeps growing

MATRIC - the Mid-Atlantic Technology, Research & Innovation Center - keeps growing and now has a staff of 83. Keith Pauley, MATRIC's chief executive officer, said the organization has won $22.5 million in contracts to date.

MATRIC's immediate goal is to hire as many Dow Chemical researchers as possible in 2009 as Dow Chemical downsizes here.

4. Coal-to-liquids plants

A proposed $800 million plant in Marshall County faces financing hurdles after Synthesis Energy Systems Inc., one of the project partners, dropped out in October "due to the difficult financial environment." But during the Dec. 9 West Virginia Energy Summit at Stonewall Resort, Paul Spurgeon of Consol Energy said his company is still "fully committed" to building a coal-to-gas plant in West Virginia.

Spurgeon estimated that the project has been delayed by four to six months because Synthesis dropped out.

Also at the Energy Summit, Adam Victor, president of TransGas Development Systems of New York City, announced the company's plan to build a $3 billion coal-to-gas liquids plant in Mingo County.

Victor said his company's plant would be economically viable even at today's oil price. He said that unlike other projects, which rely on selling debt to investors, TransGas plans to finance the Mingo County plant by selling stock to investors in London.

He expressed hope that his company would get all the permits it needs to build the plant in 6 to 9 months. Victor estimated it will take 90 to 180 days after all of the permits are received to take his company public, and said ground for the plant would be broken soon thereafter.

5. National downturn results in layoffs

A growing number of West Virginia companies are being affected by the national economic recession.

In an effort to match production with reduced demand, Toyota announced in November that its plant would have non-production days Dec. 22 and Dec. 23 and would eliminate 120 part-time jobs. In December the company added 6 1/2 more non-production days to the plant's schedule.
Also in November Rite Aid Corp. laid off 26 associates at its distribution center in Poca.

The shutdown of a pot line at Century Aluminum's Ravenswood smelter last month will ultimately impact an estimated 100 hourly and 20 salaried employees, the company said.

6. (tie) Kureha breaks ground for Belle plant

Kureha Corp. of Japan announced plans one year ago to invest more than $100 million to build a specialty plastics plant at Belle, creating about 50 new jobs. The company said it expected to begin construction in early 2008. Although the project has been delayed, "I assure you that things are moving," Suzuki replied. Kureha PGA LLC President and CEO Mark Suzuki said last week.

Suzuki said the company now expects to start excavation early this month. "We do not believe that the delay of the start of the excavation should cause any serious delay in the overall project schedule," he said.

6. (tie) Patriot Coal buys Magnum

Patriot Coal Corp. bought Magnum Coal Co. in July for $695 million in July. The deal made Patriot the seventh largest U.S. coal producer and the second largest in Central Appalachia.
Patriot operates mines in West Virginia and eastern Kentucky as well as the Illinois Basin region in western Kentucky. Magnum had 12 mines in West Virginia. St. Louis-based Peabody Energy spun off Patriot as a separate company in late 2007.

8. Chesapeake nixes Charleston headquarters

Chesapeake Energy Corp. scrapped plans to build a $35 million eastern headquarters building at NorthGate Business Park.

The company had put the building on hold in January 2007 after a Roane County jury said Chesapeake and NiSource Inc. had cheated landowners and should pay $134.3 million in allegedly unpaid gas royalties plus $270 million in punitive damages.

In May, after the West Virginia Supreme Court refused to hear its appeal, Chesapeake scrapped its plan to build.

9. W.Va. exports jump

West Virginia exported nearly $4 billion worth of products in 2007 - up 23 percent from 2006.
Steve Spence, director of the West Virginia Development Office's International Division, said, "Everything we have indicates this is by far the biggest year ever" for state exports. He said the weak dollar in 2007 was a major factor behind the record number.

10. Competition begins for providing workers' comp

Workers' compensation insurance became a competitive product in 2008.

BrickStreet Mutual Insurance Co. took over the business from the state-run Workers' Compensation Commission on Jan. 1, 2006. Last July, the market opened to other carriers.
As of Nov. 7, 125 insurance carriers had issued about 3,500 workers' comp polices in West Virginia with an estimated annual premium of more than $83 million, according to the office of State Insurance Commissioner Jane Cline.

Other top vote getters:
- University of Charleston opens graduate school
- Gasoline prices top $4 a gallon for several weeks
- Wall Street's woes cost state investment board billions on paper
- American Electric Power's proposed $2.3 billion Mason plant in limbo
- Some banks with West Virginia operations line up for federal rescue funds
- Slow economy prompts Toyota to tap brakes on Buffalo plant production
- Coal industry faces mounting criticism
- Incumbent Attorney General Darrell McGraw wins tight race against Dan Greear
- CAMC, Thomas Memorial in multimillion dollar expansions


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