Mike
Well-known member
Aberdeen beef plant details revealed
Promoter aims to draw workers from reservations
By Russ Keen
American News Writer
While some workers at the Northern Beef Packers plant planned for Aberdeen could come from other states and nations, many will not if Dennis Hellwig's dream comes true.
"My first real goal is to hire quite a few Native Americans," said Hellwig of Aberdeen, one of those organizing the plant that is expected to have 500 employees. He spoke passionately about his goal.
"I am going to really work on that. I want to get some families off the reservations to work in this plant so they can have good jobs, good wages and a good home."
Hellwig, owner of the Hub City Livestock sale barn south of Aberdeen, said he has friends who are leaders on American Indian reservations in South Dakota. He plans to schedule meetings on reservations to get the word out he wants workers.
South Dakota's unemployment rate in June 2006 was 2.9 percent. That compares to these June rates in some counties with reservations: 13.1 percent in Dewey, 10 percent in Shannon, 6.8 percent in Todd and 7.2 percent in Ziebach.
Plant organizers also intend to advertise throughout South Dakota and neighboring states, he said. An experienced labor pool is available, he said.
"Lots of plants have closed and some closed not too long ago," he said. One example is Norfolk, Neb., where Tyson shut down its plant with 1,300 workers in February.
Illegal immigrants won't land jobs at Northern Beef if Hellwig's intentions to work closely with the South Dakota Department of Labor work out.
"With a real good screening mechanism in place with the labor department, we can really minimize our problems," he said.
More details emerge: Hellwig elaborated on other aspects of the plant he and others plan to build about a mile south of Aberdeen, west of the city's wastewater treatment plant. They intend to begin construction this fall and to start operations next year, possibly in the spring.
The schedule could change, however. Petitions were handed in last week calling for a public referendum on rezoning already approved by the city for the plant. If there are enough valid signatures, a referendum will be scheduled.
• Roads: The hope is to build a truck bypass that would hook up to U.S. Highway 12 east of Aberdeen Regional Report and extend south and west to the plant. The road would continue west from the plant to U.S. Highway 281.
Discussions are taking place with the state regarding the bypass, Hellwig said. The plan is for the state to build and maintain the bypass. In exchange, the state would hand over to the city the responsibility of maintaining U.S. Highway 12 through town. The highway is Sixth Avenue South.
City engineer Robin Bobzien said the city is willing to maintain Sixth Avenue if the state builds what would be called the south bypass as described by Hellwig. The first step is to get the bypass on the South Dakota Department of Transportation's five-year plan.
It's possible the plant will be operating before the bypass is built, but the city will push for getting it constructed as soon as possible, Bobzien said.
At full throttle, the plant would kill and process 1,500 head per day. That's 30 to 40 semi loads of cattle per day. Trucks would arrive on a staggered schedule so that cattle would wait to be slaughtered no more than three to four hours, Hellwig said.
"They won't all be in the yard at one time," he said. "And they won't come in the night before."
Total truck traffic would be about 100 per day, said engineer Robert Breukelman of Breukelman&Busch Marketing LLC, Sioux Falls. He's on board as the construction engineer for Northern Beef. The company has built and upgraded numerous beef plants, he said.
The 100 trucks daily includes those bringing in supplies such as cardboard and plastic and those hauling end products out, Breukelman said.
Northern Beef has teamed up with a food company that wants to buy 100 percent of the plant's meat products, Hellwig said. Plant workers will cut meat up into big chunks, but not into the individual steaks and roasts shoppers see in retail markets.
South Dakota Secretary of Agriculture Larry Gabriel said the lined-up buyer is a branded beef firm, which means its brand name is put on the products. Branded beef is higher priced than regular commodity beef sold by big corporate players such as Tyson, Gabriel said. But demand for branded beef is growing much faster than that for commodity beef, he said.
Gabriel and Hellwig said they cannot disclose the buyer's name yet.
• Buildings: The main building will be the kill-and-process facility. It will operate five days a week, Monday through Friday with one eight-hour shift a day.
Cattle will be housed in a separate building. The rendering and hide-tanning operations will be inside a third building, Hellwig said. The total building complex will be almost 400,000 square feet, or almost seven acres of facilities alone, Breukelman said.
Rendering means bones will be converted into bone meal as a feed supplement for poultry, he said. The hide and rendering operations will need about 50 workers, which is in addition to the 500 plant workers.
The blood - about 8 gallons per animal or 12,000 gallons a day - will be purchased by IKOR, a blood research and processing company, Hellwig said. IKOR has a business sign on the east door of the east wing of the former Central High School complex in downtown Aberdeen.
• Financing: Three sources are lined up to provide the cash to build the operation. The state of South Dakota is one. Hellwig declined to identify the other two and the total cost, except to say it is "millions upon millions."
Gov. Mike Rounds and Gabriel "teamed up with us" on the project about eight months ago, Hellwig said.
"They both want this very bad."
Gabriel said the state has yet to commit to a dollar amount. It is contingent upon Hellwig getting signed papers for the rest of the financing. The state will likely pick up what the other investors don't, Gabriel said.
"I am optimistic," he said. "It would be a big win for South Dakota Certified Beef."
South Dakota Certified Beef is a trademark approved last year by the state Legislature. The program requires that cattle enrolled are born and raised in the state, and has certification standards for what the cattle are fed and for meat quality.
The program aims to give buyers assurance of quality and safety. The state's certified beef is in high demand in Japan, Taiwan and South Korea, Gabriel said. And the only reason it's not in high demand in other countries is that South Dakota hasn't yet marketed the concept in those nations, he said.
In North Dakota, the state's first modern beef processing plant is also getting off the ground. See story on Page 6A.
• Cattle sources: The least of his concerns is securing enough cattle to keep Northern Beef Packers running at full capacity, Hellwig said.
The goal is to process as much South Dakota Certified Beef as possible.
"We would like it to be 100 percent, but we don't think that will be possible," he said. It will probably take three to four years to get to the point where most of the beef the plant handles is state certified, he said. That's because the certified program is just getting off the ground among cattle producers.
Ninety percent of all Northern Beef cattle will come from within 100 to 150 miles of Aberdeen. Hellwig pointed to numerous large feedlots already operating in the area: one near Amherst that finishes about 20,000 head a year; another near Leola that puts out 25,000; one near Langford with 20,000; an Onida operation at 37,000; a Milbank outfit with 20,000.
The region is also dotted with numerous smaller operations that finish from 2,000 to 6,000 head per year, Hellwig said.
"I drew a line from the Minnesota border to south of Brookings over to Onida and up the Missouri River to North Dakota," he said. "That section has way more fed cattle than we could ever use."
At 1,500 a day, five days a week, 52 weeks a year, Northern Beef Packers would handle almost 400,000 head a year. For perspective, 25.8 million fed cattle were taken to market in the United States in 2005.
Numerous feedlot operators have already told him they want to bring their finished cattle to the Aberdeen plant, Hellwig said. Feedlots in southern North Dakota and western Minnesota are also interested.
Bringing the animals to Aberdeen will save regional feedlots transportation costs because their cattle are now shipped to Nebraska for slaughter, Hellwig said.
• Utilities: Either the city or WEB Water Development Association or both would provide water for Northern Beef.
"I think we will use city water, or we could hook up to both and switch back and forth," at times when one or the other is in short supply, Hellwig said. He said he has talked to both entities.
Northern Beef would need about 1.25 million gallons of water per day, Breukelman said. The most consumed in the city is about 8 million gallons a day, and that happens only on the hottest of summer days, city engineer Bobzien has said.
Almost all of the 1.25 million gallons that comes in would leave Northern Beef daily, going by underground pipes to the city's wastewater treatment plant immediately east of Northern Beef, Breukelman said. Northern Beef would treat its wastewater on site before it goes to the city's plant as essentially clean water, Breukelman said.
City engineer Bobzien said the city plant could not handle Northern Beef's untreated wastewater, but will easily be able to handle the 1.25 million gallon discharge if the beef plant preteats it.
"The developers are well aware they will need to pretreat," he said.
And the city's water treatment plant north of town can easily handle Northern Beef's demand for water.
"We will be OK," he said. "We need to develop additional water sources, but we need to do that anyway." The city intends to dig additional wells.
Electricity would come from Northwestern Energy. Hellwig said he met with Northwestern officials about a week ago to discuss details. Northwestern has a substation just west of the plant site, making hook-up convenient, Hellwig said.
City and WEB water pipes are nearby, too, he said, as are natural gas pipes.
• Viability: Meat-packing plants come and go, particularly when major corporations are involved.
As examples, Tyson closed its beef plant in Norfolk, Neb. in February. It had 1,300 employees. And the $100 million expansion of the John Morrell hog processing plant in Sioux Falls is on hold, making the entire city nervous about the plant's future.
And large corporate meat processors frequently change hands. In Grand Island, Neb. for example, the Swift and Co. beef plant began as a Swift plant in 1964, changed hands several times and is once again Swift. In-between owners were also big names such as ConAgra and Montford.
Sometimes big names leave the scene permanently. Tyson, for example, in 2001 bought out Iowa Beef Processors, which had been a major player in meat processing for years.
And sometimes little names depart. Minnesota Beef Industries, a small, locally owned beef plant in Buffalo Lake, Minn., closed in February. It had about 100 workers, according to the city office. The owner does have hopes of reopening at some point, however, according to the city official.
The big-corporation meat-packing industry is characterized by what Norfolk, Neb., city administrator Michael Nolan called a survival-of-the-fittest, "Darwinian ruthlessness."
"But, frankly, a locally owned plant in Aberdeen might be a different story," Nolan said.
Hellwig hopes so.
"We aren't building this to sell it," he said. "I guess you never know down the road, but we expect to have this for the long term."
Promoter aims to draw workers from reservations
By Russ Keen
American News Writer
While some workers at the Northern Beef Packers plant planned for Aberdeen could come from other states and nations, many will not if Dennis Hellwig's dream comes true.
"My first real goal is to hire quite a few Native Americans," said Hellwig of Aberdeen, one of those organizing the plant that is expected to have 500 employees. He spoke passionately about his goal.
"I am going to really work on that. I want to get some families off the reservations to work in this plant so they can have good jobs, good wages and a good home."
Hellwig, owner of the Hub City Livestock sale barn south of Aberdeen, said he has friends who are leaders on American Indian reservations in South Dakota. He plans to schedule meetings on reservations to get the word out he wants workers.
South Dakota's unemployment rate in June 2006 was 2.9 percent. That compares to these June rates in some counties with reservations: 13.1 percent in Dewey, 10 percent in Shannon, 6.8 percent in Todd and 7.2 percent in Ziebach.
Plant organizers also intend to advertise throughout South Dakota and neighboring states, he said. An experienced labor pool is available, he said.
"Lots of plants have closed and some closed not too long ago," he said. One example is Norfolk, Neb., where Tyson shut down its plant with 1,300 workers in February.
Illegal immigrants won't land jobs at Northern Beef if Hellwig's intentions to work closely with the South Dakota Department of Labor work out.
"With a real good screening mechanism in place with the labor department, we can really minimize our problems," he said.
More details emerge: Hellwig elaborated on other aspects of the plant he and others plan to build about a mile south of Aberdeen, west of the city's wastewater treatment plant. They intend to begin construction this fall and to start operations next year, possibly in the spring.
The schedule could change, however. Petitions were handed in last week calling for a public referendum on rezoning already approved by the city for the plant. If there are enough valid signatures, a referendum will be scheduled.
• Roads: The hope is to build a truck bypass that would hook up to U.S. Highway 12 east of Aberdeen Regional Report and extend south and west to the plant. The road would continue west from the plant to U.S. Highway 281.
Discussions are taking place with the state regarding the bypass, Hellwig said. The plan is for the state to build and maintain the bypass. In exchange, the state would hand over to the city the responsibility of maintaining U.S. Highway 12 through town. The highway is Sixth Avenue South.
City engineer Robin Bobzien said the city is willing to maintain Sixth Avenue if the state builds what would be called the south bypass as described by Hellwig. The first step is to get the bypass on the South Dakota Department of Transportation's five-year plan.
It's possible the plant will be operating before the bypass is built, but the city will push for getting it constructed as soon as possible, Bobzien said.
At full throttle, the plant would kill and process 1,500 head per day. That's 30 to 40 semi loads of cattle per day. Trucks would arrive on a staggered schedule so that cattle would wait to be slaughtered no more than three to four hours, Hellwig said.
"They won't all be in the yard at one time," he said. "And they won't come in the night before."
Total truck traffic would be about 100 per day, said engineer Robert Breukelman of Breukelman&Busch Marketing LLC, Sioux Falls. He's on board as the construction engineer for Northern Beef. The company has built and upgraded numerous beef plants, he said.
The 100 trucks daily includes those bringing in supplies such as cardboard and plastic and those hauling end products out, Breukelman said.
Northern Beef has teamed up with a food company that wants to buy 100 percent of the plant's meat products, Hellwig said. Plant workers will cut meat up into big chunks, but not into the individual steaks and roasts shoppers see in retail markets.
South Dakota Secretary of Agriculture Larry Gabriel said the lined-up buyer is a branded beef firm, which means its brand name is put on the products. Branded beef is higher priced than regular commodity beef sold by big corporate players such as Tyson, Gabriel said. But demand for branded beef is growing much faster than that for commodity beef, he said.
Gabriel and Hellwig said they cannot disclose the buyer's name yet.
• Buildings: The main building will be the kill-and-process facility. It will operate five days a week, Monday through Friday with one eight-hour shift a day.
Cattle will be housed in a separate building. The rendering and hide-tanning operations will be inside a third building, Hellwig said. The total building complex will be almost 400,000 square feet, or almost seven acres of facilities alone, Breukelman said.
Rendering means bones will be converted into bone meal as a feed supplement for poultry, he said. The hide and rendering operations will need about 50 workers, which is in addition to the 500 plant workers.
The blood - about 8 gallons per animal or 12,000 gallons a day - will be purchased by IKOR, a blood research and processing company, Hellwig said. IKOR has a business sign on the east door of the east wing of the former Central High School complex in downtown Aberdeen.
• Financing: Three sources are lined up to provide the cash to build the operation. The state of South Dakota is one. Hellwig declined to identify the other two and the total cost, except to say it is "millions upon millions."
Gov. Mike Rounds and Gabriel "teamed up with us" on the project about eight months ago, Hellwig said.
"They both want this very bad."
Gabriel said the state has yet to commit to a dollar amount. It is contingent upon Hellwig getting signed papers for the rest of the financing. The state will likely pick up what the other investors don't, Gabriel said.
"I am optimistic," he said. "It would be a big win for South Dakota Certified Beef."
South Dakota Certified Beef is a trademark approved last year by the state Legislature. The program requires that cattle enrolled are born and raised in the state, and has certification standards for what the cattle are fed and for meat quality.
The program aims to give buyers assurance of quality and safety. The state's certified beef is in high demand in Japan, Taiwan and South Korea, Gabriel said. And the only reason it's not in high demand in other countries is that South Dakota hasn't yet marketed the concept in those nations, he said.
In North Dakota, the state's first modern beef processing plant is also getting off the ground. See story on Page 6A.
• Cattle sources: The least of his concerns is securing enough cattle to keep Northern Beef Packers running at full capacity, Hellwig said.
The goal is to process as much South Dakota Certified Beef as possible.
"We would like it to be 100 percent, but we don't think that will be possible," he said. It will probably take three to four years to get to the point where most of the beef the plant handles is state certified, he said. That's because the certified program is just getting off the ground among cattle producers.
Ninety percent of all Northern Beef cattle will come from within 100 to 150 miles of Aberdeen. Hellwig pointed to numerous large feedlots already operating in the area: one near Amherst that finishes about 20,000 head a year; another near Leola that puts out 25,000; one near Langford with 20,000; an Onida operation at 37,000; a Milbank outfit with 20,000.
The region is also dotted with numerous smaller operations that finish from 2,000 to 6,000 head per year, Hellwig said.
"I drew a line from the Minnesota border to south of Brookings over to Onida and up the Missouri River to North Dakota," he said. "That section has way more fed cattle than we could ever use."
At 1,500 a day, five days a week, 52 weeks a year, Northern Beef Packers would handle almost 400,000 head a year. For perspective, 25.8 million fed cattle were taken to market in the United States in 2005.
Numerous feedlot operators have already told him they want to bring their finished cattle to the Aberdeen plant, Hellwig said. Feedlots in southern North Dakota and western Minnesota are also interested.
Bringing the animals to Aberdeen will save regional feedlots transportation costs because their cattle are now shipped to Nebraska for slaughter, Hellwig said.
• Utilities: Either the city or WEB Water Development Association or both would provide water for Northern Beef.
"I think we will use city water, or we could hook up to both and switch back and forth," at times when one or the other is in short supply, Hellwig said. He said he has talked to both entities.
Northern Beef would need about 1.25 million gallons of water per day, Breukelman said. The most consumed in the city is about 8 million gallons a day, and that happens only on the hottest of summer days, city engineer Bobzien has said.
Almost all of the 1.25 million gallons that comes in would leave Northern Beef daily, going by underground pipes to the city's wastewater treatment plant immediately east of Northern Beef, Breukelman said. Northern Beef would treat its wastewater on site before it goes to the city's plant as essentially clean water, Breukelman said.
City engineer Bobzien said the city plant could not handle Northern Beef's untreated wastewater, but will easily be able to handle the 1.25 million gallon discharge if the beef plant preteats it.
"The developers are well aware they will need to pretreat," he said.
And the city's water treatment plant north of town can easily handle Northern Beef's demand for water.
"We will be OK," he said. "We need to develop additional water sources, but we need to do that anyway." The city intends to dig additional wells.
Electricity would come from Northwestern Energy. Hellwig said he met with Northwestern officials about a week ago to discuss details. Northwestern has a substation just west of the plant site, making hook-up convenient, Hellwig said.
City and WEB water pipes are nearby, too, he said, as are natural gas pipes.
• Viability: Meat-packing plants come and go, particularly when major corporations are involved.
As examples, Tyson closed its beef plant in Norfolk, Neb. in February. It had 1,300 employees. And the $100 million expansion of the John Morrell hog processing plant in Sioux Falls is on hold, making the entire city nervous about the plant's future.
And large corporate meat processors frequently change hands. In Grand Island, Neb. for example, the Swift and Co. beef plant began as a Swift plant in 1964, changed hands several times and is once again Swift. In-between owners were also big names such as ConAgra and Montford.
Sometimes big names leave the scene permanently. Tyson, for example, in 2001 bought out Iowa Beef Processors, which had been a major player in meat processing for years.
And sometimes little names depart. Minnesota Beef Industries, a small, locally owned beef plant in Buffalo Lake, Minn., closed in February. It had about 100 workers, according to the city office. The owner does have hopes of reopening at some point, however, according to the city official.
The big-corporation meat-packing industry is characterized by what Norfolk, Neb., city administrator Michael Nolan called a survival-of-the-fittest, "Darwinian ruthlessness."
"But, frankly, a locally owned plant in Aberdeen might be a different story," Nolan said.
Hellwig hopes so.
"We aren't building this to sell it," he said. "I guess you never know down the road, but we expect to have this for the long term."