BROOKINGS — People love their Babybel cheese products, so much so that the increasing demand is a major reason for a $200 million expansion of Bel Brands USA’s manufacturing plant in Brookings.
The groundbreaking ceremony for the project — which is expected to produce 150 to 160 new, high-paying jobs — took place March 11 amid fanfare and the presence of such dignitaries as South Dakota Gov. Larry Rhoden, Bel Groupe CEO Cecile Beliot, Mayor Oepke “Ope” Niemeyer and Bel North American CEO Peter McGuinness.
All that said, it’s not just the insatiable demand for cheese that spurred France-based Bel’s decision to expand in Brookings: Another key player was the area’s hard-working population, of which around 260 currently work at the plant.
“Really, it starts with the people. We have a great team here … (it’s) is top-notch, and the product we produce here is some of the best quality in the organization,” Project Director Jacob Anderson told The Brookings Register in an interview. “We’ve seen the success of the plant, the success of the team here.”
He spoke about the product’s popularity factor, too.
“Certainly, the demand in the U.S. has outpaced the production of the facility here, and so we want to continue to produce for the U.S. in the U.S., and certainly it makes sense to do that here in Brookings,” Anderson noted.
The project’s timeline spans several years, but it’ll be noticeable within weeks, he said.
“We’re planning to start construction very soon, and we would start to see some of the equipment being installed in 2027 with the anticipation of starting up production in 2028.”
And if you think the facility is big now at roughly 170,000 square feet, the expansion will increase that by another 100,000 square feet. People certainly won’t be able to miss it when driving or walking by.
“Really, we are proud that we’ll bring something really concrete to the region, to the community, in those jobs — skills development then also, much longer, I would say business relationships with our suppliers and dairy farmers in the area,” Plant Manager Vlad Homola said at the same interview.
Besides job seekers, the other big winner will be dairy farmers in the Brookings area. The plant currently uses 650,000 pounds of milk daily, and that will double once the expansion is operational. The nine to 12 milk trucks that come through each day will grow to 20 per day with the new capabilities, according to Anderson.
“We work with a couple of different cooperatives that supply our milk,” he said. “The I-29 corridor is one of the fastest growing dairy regions in the nation. We know there’s a lot of dairy producers out there are ready to expand their herds as well as dairy producers that want to move their herds to South Dakota.”
Anderson noted an ample dairy supply was a main reason Bel first opened in Brookings and that, in the years since, that supply has only grown.
“Certainly, we’re confident the milk supply is there,” he said, adding that Bel works with three cooperatives, with most of the milk coming from within 25 to 30 miles of Brookings.
Bel Brands USA is also confident in its ability to attract workers, even with Brookings County’s tight labor market, noted for its low 2.5% unemployment rate as of December.
“We’ve really worked hard to put ourselves toward the top of organizations in the community,” Anderson said. “We feel we’ve put a lot of things in place to help with recruitment. Right now, when we have positions that open, the best recruitment is our current team — whether it’s family members or friends that they recommend and that’s who’s applying. That’s the best kind of recruitment that we can have — our own team.”
He continued, “The total (annual) income from those 150 to 160 employees should be about $12 million that’s going directly from our team into the community.”
According to information from the Brookings Regional Growth Alliance, those jobs would be:
• Hourly positions totaling 145 with wages ranging from $55,000 to $100,000.
• Fifteen salaried positions with wages ranging from $80,000 to $120,000.
For comparison, the current total annual payroll is $20 million, per from the BRGA.
Incentives offered
Both the state and the city provided incentives to Bel for the plant’s initial construction in 2012, and the state is also helping the company with its current expansion.
Local incentives in 2012 were intended to help with both initial construction and the eventual expansion.
“When Bel Brands originally selected Brookings for its U.S. production facility in 2012, the city … and the Brookings Economic Development Corp. partnered to provide a development incentive package designed to support both the initial plant and future expansion phases,” Stephanie Mason, business development director for the BRGA, said. “Many of those incentives were structured to support both Phase I and Phase II of the project.”
According to the BRGA, they included such things as:
• Construction of a wastewater solution system to support dairy processing capacity.
• A land grant of $1.6 million.
• A job creation cash grant of $2,500 per job for up to 400 jobs.
• 32nd Avenue infrastructure improvements and paving.
• Utilities extended to the site.
Mason noted that additional elements included a sales and use tax refund program tied to equipment purchases, property tax abatements, and a tax increment financing structure that returns a portion of new tax revenue after Brookings has recovered its initial investment.
On the state’s side, its 2012 package included:
• A $5 million loan from South Dakota’s Revolving Economic Development and Initiative Fund.
• An Economic Development Finance Authority bond/loan totaling $5 million.
• A $1 million grant from the South Dakota Future Fund.
The state has also stepped up to the plate for Bel’s Phase II expansion, ponying up:
• A $5 million loan from the REDI Fund.
• $10 million in EDFA bonds.
• Workforce development totaling $160,000.
The help, naturally, is appreciated by Bel.
“Certainly, any incentive helps. We’re very happy to have worked with the state of South Dakota and the city of Brookings. They’ve been fantastic partners to work with,” Anderson explained. “There’s some tax incentives that will help out with the project as well as a low-interest loan from the state because it is an expensive project — so anything to help incentivize certainly helps to build the confidence that what we build here and what we produce here is going to a great, long-standing operation for years to come.”
Regarding the construction itself, BRGA numbers indicate that the one-time impact will be impressive:
• Construction-related jobs totaling 566 positions.
• Indirect and induced jobs totaling 162 positions.
• One-time tax revenues through construction payroll of $805,000.
• One-time equipment and materials sales tax of $1.6 million to $1.9 million, with Bel estimating equipment and materials at $100 million to $120 million.
• Ongoing annual operations impact of $208 million.
• The aforementioned 160 jobs from expansion operations.
• Another 202 indirect and induced jobs.
• Ongoing annual city tax revenue of $633,000.
Lasting impressions
During the groundbreaking ceremony, dirt literally flew, but what flew beforehand were testimonies to the economic strength of the Brookings area and South Dakota, along with a tale of another city that lost the race to entice Bel Brands USA.
“Projects like this are proof positive that we’re open for opportunity in South Dakota, and we’ll continue to be open for opportunity,” Gov. Rhoden said. “We have the lowest unemployment rate in America, South Dakota has the second fastest-growing GDP, we have the third fastest-growing incomes. More than that, our people are embracing economic development.”
He went on to say that Bel’s expansion and its jobs tells the world a one thing.
“It will send a clear message to this community, that this community — and our state of South Dakota — is open for opportunities,” Rhoden added.
Mayor Niemeyer shared his observations as well, along with a “tale of two cities” of sorts.
“This expansion is especially exciting to me because I was a new City Council member when the city and BEDC were in negotiations to bring Bel Brands here — a lot of those faces are here today,” he began. “We were excited when they announced in 2012 that Brookings would become home to its newest manufacturing facility.
“I remember the pride our community felt knowing Bel’s leadership had chosen Brookings after exploring several other cities and states as options,” Niemeyer continued. It was his next sentence that brought laughter and clapping: “I happened to be working on a project in Sioux City, Iowa, and the gal that was the CEO of that facility came up to me and said, ‘I understand you took our dairy plant from us.’ Yes, we did!”
Right now, roughly 1.6 million Babybel products are produced daily, and the expansion will double that number, Niemeyer said, requiring even more milk than it uses now, from an additional 10,000 cows each day. “That’s a lot of cows.”
“That’s not just impressive,” he said. “It’s a powerful example of how this plant strengthens South Dakota’s dairy industry and agricultural community.”
— Contact Mondell Keck at [email protected].
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