Wednesday, October 31, 2001

Brewster lands $2.3 million project

WREDC speaker discusses manufacturing, growth

A South Dakota co-op started construction Tuesday on an oil storage facility at the future site of the Minnesota Soybean Processors' crushing plant in Brewster.

Officials with the South Dakota Soybean Processors made the announcement Tuesday evening at the annual meeting of the Worthington Regional Economic Development Corp.

The $2.3 million project will include storage tanks, shipping and receiving equipment and roughly 1,600 feet of rail siding.

"It's a step forward toward completion of the plant," SDSP commercial manager Tom Kersting said. "Once the facility is completed over there, that'll become part of the soybean plant."

The Volga, S.D.-based co-op already has an agreement with MnSP to provide construction management, marketing and operational management for a 100,000-bushel-per-day plant in Brewster. The agreement also allows SDSP to invest in the plant.

"By making our investment today, SDSP will gain a strategic marketing advantage and MnSP will improve its long-term earning potential; this is truly a win-win for both cooperatives," CEO Rodney Christianson said in a statement Tuesday.

Completion of the storage facility is scheduled for June 1, Kersting said.

Soybean oil will be received and loaded out periodically at the site. The oil could come from SDSP's crushing facility in Volga, which already has storage tanks, or from other plants, he said.

The storage facility will staff one to five employees depending on market activity, he said.

SDSP board members approved the project this summer in light of favorable market conditions, Kersting said.

"There's currently a large supply of soybean oil in the United States, and storing oil is a good marketing alternative right now," he said. "There are premiums for deferred sales, meaning the market will pay you to carry it."

Another deciding factor was the location along the Union Pacific railroad, he said.

"That rail line that goes through Brewster is a heavy-axle and a Class 1 railroad, which makes it beneficial to be located on that kind of rail," he said.

SDSP merchandising manager DuWayne Bauman said the decision to build in Brewster reflects the co-op's commitment to the MnSP project.

MnSP needs a minimum of $18.7 million in farmer equity to construct an 80,000-bushel-per-day soybean crush, and the co-op has raised nearly $17 million so far. Chairman Bob Kirchner of Brewster said he's confident they'll reach that goal before the share price jumps from $2.25 to $2.40 on Dec. 1.



©Worthington Daily Globe 2001