Morehead-based AppHarvest claims to operate some of the world’s largest high-tech, indoor farms. The company promotes itself as a grower of affordable, healthy fruits and vegetables.
Since the company began operations in Eastern Kentucky in 2020, AppHarvest has been growing at a fast clip, with facilities in Morehead, Richmond, Berea, and Somerset. However, the company has been struggling financially, and last week filed for what is known as chapter 11 bankruptcy protection.
App Harvest officials would not offer any comments for broadcast, but they did respond to our questions about the future of the organization via e-mail. In a statement, they said - quote:
“Essentially, we just weren’t making enough money fast enough to keep up with the bills. We’ve been making great progress on core operations though under the leadership of former COO and now CEO Tony Martin—with increasing volume, quality, and sales. So, we believe that farms can emerge from this Chapter 11 as a healthy business.”
Kentucky governor Andy Beshear was an early cheerleader for the company and their former CEO Johnathan Webb. In a video released in February 2021, Governor praised Webb’s company and what it could mean for Appalachia.
“But I think he has also created what will be the anchor for so much economic development, for so many jobs of the future, for right here and right now.”
In that same video, the governor even compared the arrival of AppHarvest to when the vehicle manufacturer Toyota arrived in the commonwealth.
“And everything changed. The economy changed, the jobs available changed, and I believe we are living that right now, and it is occurring in eastern Kentucky.”
During a press conference, Governor Beshear said despite the AppHarvest bankruptcy filing, there is ongoing progress happening in the region.
“I’m disappointed because there was a lot of momentum behind this company. My disappointment, I believe, is going to be short term, in the long term, agri-tech, these large greenhouse operations are absolutely going to be necessary. They’re going to be necessary because we can not grow enough food to feed the world’s population at the rate it’s without operations like this.”
Signs that operations will continue are evident at the Berea App Harvest location. Berea Mayor Bruce Fraley said the process is already underway for the facility there to be transferred over to Canada-based Mastronardi Produce who is a distributor for AppHarvest.
“So Mastronardi is the new owner, and the Berea facility will transition from the AppHarvest name to Mastronardi, and people who may know the Mastronardi name through the way they distribute under the Sunset label. So, if you’ve seen Sunset tomatoes or greens with the Sunset label on them, that would be from Mastronardi.”
Fraley said even though the facility is changing hands, the initial arrival of AppHarvest has already benefited his town.
“Them locating here has opened the door to current industries that are expanding and others that are interested in Berea. So, their presence in choosing Berea has a benefit and a positive impact beyond just the searing of AppHarvest.”
Fraley said he has had some assurance from AppHarvest about the fate of the workers in the Berea facility.
“Workforce would stay the same and the salary and benefits should stay the same. So, we’re optimistic they’ll continue operations and continue with their current employees, but I have not heard from any officials at Mastronardi at this point.”
That is the hope for the Richmond facility as well. David Stipes is the executive director of the Richmond Industrial Development Corporation with the city.
“Our hope is that that large greenhouse facility that’s a state of the art technology, even if AppHarvest doesn’t stay and occupy that maybe there will be another entity that comes in and take that over and retain those jobs.”
When asked about what will happen to the workers in the other facilities, AppHarvest officials in a written statement said - Quote
“Employees at Morehead, Somerset and Richmond are focused on business as usual and can expect to be compensated as usual and continue to have access to benefits such as their vacation days.”
Officials say they have funding to keep the business running for the next two months. Here's more from their statement. Quote:
“Over the next 60 days, we’ll be working to sell the farms to investors with the goal of keeping them operational, so they continue to employ about the same number of folks as now. The goal is to minimize any disruption to employees.”
Officials say work will continue at the farms, including shipping product to top national grocery store chains, restaurants, and food service outlets.
AppHarvest currently employs around a thousand people throughout eastern Kentucky. It's unclear how many of those employees will lose their jobs when the company is expected to run out of operating cash in September or sooner.
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