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Brookings lands Bel cheese plant

Modified: Wednesday, Feb 1st, 2012

• Cheese production plant to employ 365-400 workers

The Laughing Cow is coming to Brookings.

Brookings Economic Development Corporation (BEDC) officials revealed today that Bel Brands USA has selected Brookings as the site for its third U.S. cheese manufacturing plant.

Bel Brands, a subsidiary of Paris-based Fromageries Bel, this summer will begin construction of a 170,000-square-foot cheese production plant in the city’s Foster Addition north of the Swiftel Center.

Bel will invest $36 million in the plant building and another $126 million in equipment, said Al Heuton, BEDC director.

In a press release issued this morning, the company reported that it will invest “approximately $100 million” to build its manufacturing plant.

Heuton said the project will mean between 365 and 400 new jobs for Brookings.

Heuton noted that the plant would begin with about 200 employees initially, then ramp up its hiring as the plant begins production. The plant should reach the 365- to 400-employee number within 2 1/2 to three years after the plant opens in 2013.

The company indicated in its press release that plant construction, and reaching the 400-employee level in Brookings, would happen in two phases.

The Bel Group is a family-controlled, international company that specializes in the production of quality branded cheeses. The French parent has plants in 22 countries and sells its products in 120 countries. Bel is known worldwide for its iconic Laughing Cow trademark.

Bel Brands USA is headquartered in Chicago, and the city last year named it one of the “101 Best and Brightest Companies to Work For.”

The Brookings manufacturing facility will be devoted to producing the wax-wrapped Mini Babybel line of semi-soft snack cheeses. The company currently offers nine flavors in the United States.

Brookings will join plants in Leitchfield, Ky., and Little Chute, Wis.

• Big city investment

The City of Brookings will have a substantial investment in the project. In addition to providing Bel Brands with a 48-acre industrial site, the city will provide a total of $11.7 million for various aspects of plant construction. A large part of that investment will be recovered, however.

In a special meeting this morning, the Brookings City Council approved an economic development agreement with Bel Brands and authorized the issuance of $7 million in bonds to finance improvements at the site of the manufacturing plant and for various other construction-related purposes.

One of the major expenditures for Brookings is $5.5 million for a waste pretreatment facility – an anaerobic digester – without which the city would not have been able to service the new plant.

Heuton and city officials prefer to think of the city’s costs to acquire the plant as an investment, since most of the money will be returned in the form of tax increment district revenues, sales and use taxes and a $1 million grant from the state Department of Environment and Natural Resources.

“Our return on investment will be nearly $1,000 for every dollar we put in,” Heuton said Monday.

BEDC’s economic investment model shows that the new plant will be worth more than $163 million to the community.

With the funds the city will collect – not to mention the huge community benefit from a 200-400-person payroll – Brookings’ net cost in its participation will amount to about $3.3 million – about $165,000 a year for the next 20 years.

Among best bargains

Heuton says that ranks the project among the best bargains in Brookings’ history.

Besides its direct impact on the local economy, the Bel Brands cheese plant will give another boost to an already-flourishing dairy industry.

In the 24-hour, seven-days-a-week cheese-making process, the Brookings plant will require the milk from 12,000 to 14,000 dairy cows each day.

Brookings County is already the leading dairy producer in the state, with 30,000 milk cows. Heuton says current local production can meet the needs of the Bel plant, but there will probably be some dairy expansion. He says he “wouldn’t be surprised” if another major dairy were to locate here.

With Bel Brands in operation, Brookings will become the hub for the cheese industry in South Dakota. Davisco International Foods operates a plant in nearby Lake Norden and Valley Queen has a cheese-making plant in Milbank. The area has a long history in cheese making, too. Until about 10 years ago, Volga was the home of a Land O’Lakes cheese plant.

The importance of cheese making to the dairy industry is reflected in South Dakota State University’s commitment to dairy production.

In fact, Heuton said, SDSU’s state-of-the-art production and research facility was one of the things that captured the attention of Bel Brands USA representatives.

The dairy science program at SDSU is one of only two in the country that trains students in both dairy production and processing operations.

“The new dairy science laboratory was a big plus in the selection,” Heuton said. The classroom building and dairy plant were completely renovated during the past year, the new facilities dedicated Oct. 21.

Heuton says the new manufacturing plant in Brookings will undoubtedly be able to help the community retain some of the graduates of SDSU’s dairy program.

• Plans not finalized

Detailed plans for the new production facility in Brookings have not yet been finalized. The plant will be located on a tract of land between 32nd and 34th Avenue in the industrial park north of the Swiftel Center and Larson Ice Arena.

Construction is expected to begin this summer, and the plant should be operational by late 2013, Heuton said. A lengthy testing period will begin, and the plant should be in full production by the following summer.

The construction will be done in two phases. In the first, Bel will spend about $30 million on the plant structure, and the second will consist of a $6 million investment in the production line. Equipment adds $126 million to the company’s $162 million investment in Brookings.

The city has asked that as many local contractors as possible be involved in the construction, something Bel Brands USA had already indicated it would do.

The economic development director said the site will include the plant, the pretreatment unit, a storm water retention pond and several other storm water features.

The Bel Group prides itself on being a “green,” sustainable industry, Heuton noted, and the plant will be built to LEED (Leadership in Energy and Environmental Design) certification. The company will preserve a tree line on the south of the property.

The plant site will include room for expansion.

• Waste treatment a hurdle

One of major challenges in landing the project was the city’s waste treatment capacity. Brookings Municipal Utilities treatment facilities can’t handle the raw waste that will be produced by the processing plant, so the city agreed to build an onsite pretreatment system, an anaerobic digester.

Anaerobic digestion is a series of processes in which microorganisms break down biodegradable material in the absence of oxygen. It is used as part of the process to treat waste and sewage sludge.

The pretreatment facility will carry a price tag of about $5.5 million

In the competition for the project, all other cities considered already had waste treatment systems that would handle the cheese-making material, Heuton said.

“This was our primary hurdle, and by agreeing to this, we put ourselves on a level playing field with all the other locations.”

The competition for the plant is a story in itself. Brookings got involved in the effort in December 2010, when BEDC was notified by the Governor’s Office of Economic Development that Bel Brands was conducting a national competition for a new facility.

• Brookings beat out Sioux City

By spring of 2011, after looking at sites in Kentucky and throughout the Upper Midwest, the company had narrowed its choice to four finalists. By late in the year, only South Dakota and Iowa sites – Brookings and Sioux City – were still in the running.

The final decision wasn’t made known until this week.

The Bel Brands-Brookings partnership makes sense for three key reasons, Heuton explained:

• “It diversifies the city’s economic base. Although we have excellent durable goods manufacturers here, we have very little production in Brookings County of non-durable goods. Non-durables weather recessions better than durables, and maybe we’re getting some recession resistance with this.

• “This is a new industry tied to existing production – our dairy industry. There’s a tremendous value added with a processing plant.

• “There’s a connection with SDSU. Our goal is always to include the university, to find a tie. A dairy processing plant will keep more dairy graduate students in the area.”

Heuton added that he’s pleased that Bel Brands USA “recognized the importance of the I-29 corridor.”

Heuton says local housing and workforce will be more than able to meet the needs of the new plant.

“We have plenty of lead time to adjust to those kinds of numbers,” Heuton explained. “The local labor market can handle it. We’re in a much better position to recruit labor than we were three to four years ago.”

Contact Ken Curley at kcurley@-brookingsregister.com.

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