2015 opening eyed for beef plant

Farm Forum

The massive beef plant on the southern edge of Aberdeen was mostly quiet on a recent December morning, but the two men charged with getting the facility running again hope to change that next year.

“It’s going to be a dance when this place is flowing,” said New Angus CEO Doug Cooper. “When a plant like this is going, it’s a beautiful thing. We say we want it to be clean, cool and moving, that’s the rule.”

Though Cooper and New Angus Executive Chairman Keith DeHaan refrained from setting a specific opening date, the duo is confident the plant will be operational in 2015. Land for the plant was secured in 2006.

Known then as Northern Beef Packers, the 425,000-square-foot complex was open for a brief period in 2012 before declaring bankruptcy, shutting down and laying off most of its staff. At a bankruptcy auction in Sioux Falls a year ago, the facility was sold to California-based investment firm White Oak Global Advisors, the financial backers of New Angus.

On May 4, New Angus was incorporated in South Dakota, according to records on the secretary of state’s website.

Alexandra Tarrant, a spokeswoman for the U.S. Department of Agriculture’s Food Safety and Inspection Service, said in an email that New Angus has applied for a grant of inspection. That, she said, is one of the first steps the plant must take with the agency to become operational.

On Dec. 16, the only noticeable sounds at New Angus came from a power washer operated by one of the plant’s 14 employees. Eventually, Cooper said, the plant’s operators would like to employ close to 600 people.

“When we hire those 500 to 600 people, we want those jobs to last for the next 15, 20 years,” Cooper said. “We are very, very confident that our plan has legs, and we’re getting close to the point where we drive it out. This plant features the most pathogen intervention steps of any that I’ve seen in the world. It’s beautiful.”

In other words, many precautions are in place to combat viruses and bacteria.

Cooper pointed out some of the steps the plant will take to prevent disease-causing agents from entering the slaughter and packing processes. They include various wash and rinse stations for the carcasses and an underground locker room and pre-shift wash and rinse area for workers.

Cooper said New Angus has recently hired five new employees. He added that an announcement will likely come in early 2015 further detailing future hiring plans.

“People have to understand that in this industry, the market is very, very fluid,” DeHaan said. “It changes every day. Some decisions that we make will be made in a short period of time. We have to obviously be ready for that, but there are market opportunities that will be there, it’s just difficult to predict two or three months out what those will be.”

Saying New Angus is looking for “talent, not warm bodies,” Cooper said the pool of employees will be similar to what it was when the plant was open in 2012.

“It’s a global search,” he said. “We’re not just talking about Aberdeen or South Dakota. If those people happen to be here in Aberdeen, that’s great. We’ll look from within before we look elsewhere.”

Cooper said that the plant is also waiting on a number pieces of equipment — some of which had to be custom-built — that have been ordered. He declined to get more specific about the equipment.

“Some of these things take four months to build, then they have to be delivered, installed and tested,” Cooper said. “We’re not going to open this plant and harvest the first animal without those things proving to work. That is the major time constraint in my mind. We’re going to also take our time to fill out our management team and executive team because we will not finish any better than the employees we surround ourselves with.”

‘If it opens, it opens’

Talk about the beef plant opening again is nothing new, a point that Cooper acknowledges. But the plant’s CEO said he’s more concerned with doing thing right than quickly.

“We’re not going to run from anything that happens here,” Cooper said. “We will always stand up and be accountable for what’s being done here, but we just want to fit in and blend into the community. In business, you go through stages where you plan, verify and then vet. Since August, we have vetted our assumptions and vetted them globally.”

Cooper and DeHaan said they’ve been in contact with a number of beef producers in South Dakota and the surrounding region and report that producers are excited about the prospect of the plant again opening.

South Dakota Cattlemen’s Association President Todd Wilkinson said he spend some time with Cooper recently in Huron and came away impressed.

“He certainly seems to know what he’s talking about,” said Wilkinson, who raises cattle near De Smet. “I’m quite impressed with (Cooper). This plant is going to be opened at some point, it’s just a matter of when. For producers, timing is a big question mark because we’ll need to know some time in advance.”

While there’s little doubt that providing a new market for producers would be a positive for cattlemen, the beef plant saga — with its ties to the EB-5 foreign investor program that was the source of political controversy leading up to the November election — is one that has been long-lasting.

The federal EB-5 program allows green cards to foreign investors and their families in return for contributions of at least $500,000 to qualified economic development projects. Under previous owners, EB-5 funds were used to help finance the beef plant. That, combined with the struggles of past ownership groups, has soured some on the plant and left others unsure what to think about its future.

“If it were to open, it would help some with regard to spending money on shipping,” said Lee Schneider, who has a registered Angus herd south of Britton. “It would be nice, but, at this point, I think if it opens, it opens. This has been a long process.”

Steve Masat, who raises cattle near Redfield, said he has heard nothing in his beef producer circles about the plant, but would welcome its opening.

“If it opens, it would affect us, I’m just not exactly sure how,” Masat said. “It would give us another market for beef cattle, and it’s hard to see how that wouldn’t be a good thing, but it’s just a wait-and-see type of thing right now.”

Looking the part

Last fall, the plant completed the landscaping specifications that were required by the city of Aberdeen, said city forester Aaron Kiesz. From the outside, the property looks the part with new trees and shrubs and a parking lot waiting to be filled by vehicles.

Aberdeen Mayor Mike Levsen said the city is, like so many others, waiting and watching.

“The plant owners are complying with city regulatory requirements and doing what needs to be done, as would any other project,” Levsen said. “It is understood that their self-interest in managing the investment they have in the plant is parallel with the potential benefit to area producers.”

During a plant tour, Cooper and DeHaan couldn’t mask their excitement about what is planned for inside the building. Both men described the facility as state-of-the-art. Cooper spoke of potential market opportunities in Asian countries like Japan and South Korea. Previous plant owners also saw a demand in Asia.

While leading a walk through the warehouse portion of the facility, Cooper said it has the capability to store 40 loads of chilled, boxed beef.

Boxes of beef produced will be generally be 40 or 60 pounds, but there will also be other sizes for export to Asian markets, Cooper said. The off-sized boxes will contain parts not generally desired by Americans — tongues and livers, for instance — but coveted in other cultures, Cooper said. That will allow the plant to capitalize on what he calls the “fifth quarter” of a carcass.

“This is going to be an export culture,” Cooper said. “Hopefully, we’ll be shipping to three continents. With my experience in the business and Keith’s experience, we’re on the track and we’re going to put together a great team.”

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New Angus beef plant

Facility square footage: 425,000

Number of football fields that could fit inside plant: Six

Current number of employees: 14

Target staff size: 500 to 600

Handling capacity: 1,700 head of cattle per day

Target number of operational days per year: 250.