The Bean Counter - Volume 2, Issue 5, November 2002

Minnesota Soybean Processors
Box 100 Brewster, MN 56119-0100
Ph: 1-507-343-6677 Fax: 1-507-727-2677

The Bean Counter

Volume 2, Issue 5

www.MnSoy.com

November 2002

From the Desk of the CEO

Construction Is Finally Under Way!

WOW! Finally after months of working to get all permits in place, MnSP's future 100,000-bushel soybean processing plant is under construction! Official groundbreaking was held in conjunction with MnSP's board meeting on Monday, Nov. 18, 2002. The ceremonial picture of the first dirt turn on Monday, Nov. 18, fails to show the scurrying of contractors in the background. MnSP started work on the site Oct. 24 after receiving its permit to construct from Minnesota Pollution Control Agency (MPCA). Dirt has been flying, and MnSP's goal of getting foundations in before a heavy freeze is on target as I write. I was personally impressed with the progress in just the last week.

Modeling requirements by the Environmental Protection Agency and MPCA certainly delayed MnSP's efforts to start construction this fall. I am a strong supporter of these requirements. It is important for our neighbors to know that the environmental footprint left by your investment will not detract from their quality of life. But when months and thousands of dollars are spent to prove 1) that pollution from existing highways in rural Minnesota landing on MnSP's property line should not prevent MnSP from building and 2) that the City of Brewster meets U.S. Air Quality Standards today without our facility being built, something is wrong! MPCA is addressing this issue. I must express my appreciation of the effort of MPCA's employees, once approval was received, to expedite MnSP's permit. It seems MPCA was suffering from budget constraints and heavy workload. Air modeling was the biggest obstacle.

Completing construction in 12 months and starting operation in the fall of 2003 remains MnSP's target. The

schedule is aggressive and we need a little help with the weather this winter if we are to be successful. Your construction management team will work diligently to this end. Time is money! On the budget from MnSP has received quotes and bids on over $45 million of your project. The total of the combined bids versus our budget for the bid items is within 0.3% as of this writing. We are on track but not with a lot of breathing space. Since our last communication MnSP has also entered into a loan agreement with Co-Bank for construction costs and the on-going operations of MnSP. While disclosing terms in a public forum is inappropriate, I do want MnSP's members to know that we receive excellent rates, exceeding our expectation.

MnSP still has areas to finalize in the overall infrastructure development of the site. The old adage of which came first, the chicken or the egg? certainly plays out in our project. Members' funds and permitting were required first in our case before all public funding sources and support could be secured. And as we all know, applications with government agencies work on a standard timetable, not an expedited one. In the area of water, MnSP will take ownership of the local water source for our facility. This action will lower initial up-front capital cost substantially for water development. Since water supply in the southwestern region of Minnesota is always questionable, MnSP has already identified and is in the process of securing additional water rights for our long-term needs.

Thank you for your patience as we have worked through the hurdles of getting your project underway.

Rodney Christianson
CEO, Minnesota Soybean Processors

Second Equity Payments Due

Second equity payments will be due Jan. 15, 2003, according to MnSP Treasurer Paul Henning of Okabena, Minn. He said invoices for the second 30% payment will be in the mail about Dec. 15.

MnSP President is Optimistic Over Fast Start After Groundbreaking

Contractors haven't lost any time getting busy at the site of Minnesota Soybean Processors plant at Brewster, reports President Bob Kirchner of Brewster. "Several footings for storage bins have been poured, and they made a large (3,000 sq. yd.) pour for the prep building on Nov. 25," he said, noting dirt moving began Oct. 24.

Reflecting on the groundbreaking ceremony, Kirchner said it was a moment of "tremendous satisfaction for officers, board members and stockholders to see something tangible take place after four years of talking among ourselves,

planning and countless meetings to raise equity for this value-added enterprise."

"Now we're hoping for a normal winter which will permit good progress on the construction so we can have a fall 2003 startup," he said.

"This winter we'll be making several decisions on biodiesel: First, if we're going to get into refining it, and if we do, what size and capacity facility to construct," he predicted.

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These Minnesota Soybean Processors directors grabbed a plated shovel and participated in the groundbreaking ceremonies, timed to coincide with a director's meeting.

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Pausing during groundbreaking ceremonies Nov. 18 at the Brewster site are (from left): MnSP Director Bruce Hill, Worthington; Treasurer Paul Henning, Okabena; President Bob Kirchner, Brewster; Lt. Gov.-Elect Carol Molnau, Chaska; Minnesota Commissioner of Agriculture Gene Hugoson, St. Paul, and Director Ron Obermoller, Brewster.

MnSP Board of Directors

District 1

District 2

District 3

District 4

District 5

District 6

District 7

Robert Kirchner Brewster MN 507-842-5592	Ron Obermoller Brewster MN 507-842-5467	Bob Crowley Iona MN 507-425-2021	Greg Nieuwendorp Sheldon IA 712-348-5646	Steven Hansen Clear Lake SD 605-874-2313	David Bunde Stewartville MN 507-533-4928	Paul Henning Okabena MN 507-853-4669
LeRoy Kellenberger Beaver Creek MN 507-673-2283	Bruce Hill Worthington MN 507-842-5402	Don Louwagie Marshall MN 507-532-6081	Galen Van Beek Inwood IA 712-753-2286	Todd Stroschein Clear Lake SD 605-876-3721	Gary Dieterich Rudd IA 641-395-2383	Darol Schmitz Brewster MN 507-842-5413
Steffen Van Westen Reading MN 507-478-4552	Bill Fest Heron Lake MN 507-793-2585	Jim Sallstrom Winthrop MN 507-647-2546	Keith Waltner Parker SD 605-648-3224	Edward Verhelst Huron SD 605-352-5564	Eric Thorn Chatfield MN 507-862-1427	Adam Schumacher Heron Lake MN 507-793-2588