Winsted-Lester Prairie Journal, March 2, 2001

Natural Nutrients hopes to close deal in March

By Patrice Salmon

Bob Salazar, president of Natural Nutrients, spoke with enthusiasm of its impending purchase of the DairiConcepts milk processing plant in Winsted.

Tuesday's public hearing before the Winsted City Council was held to consider Natural Nutrients' request for industrial revenue bond assistance in its pursuit of six million dollars worth of bonds.

The current plan, following a favorable public hearing is to seek the bonds, with hopes to close on the purchase of the plant, by the end of March, Salazar explained.

When a company seeks industrial revenue bonds, a public hearing is required to ensure public support for the project. The state, which issues the bonds, is safeguarding the interests of the city, to ensure new projects, funded with industrial revenue bonds, will be supported.

The plant was originally known as Pure Milk Products and was known for many years as Mid-America Dairymen. Most recently, it was called Dairy Farmers of America (DFA) before recently becoming DairiConcepts.

Jerry Roberts, who will be the plant's general manager, was given the assignment of finding a plant for the company's production. The firm's engineers found the Winsted plant to be ideal for its purposes.

"A key for the company is the spray drying technology,"said Salazar.

"If we had called two weeks later, the dryers would be in pieces and travelling down the highway," he continued.

"We want to thank DFA for giving us the time to really fully explore options, to make sure everything would work for us," Salazar said.

Natural Nutrients is engaged in producing crude natural glycerin and value-added Nutri-Ferm feed supplements from agricultural products and by-products.

After the acquisition, the company will be known as Natural Nutrients Plant - Minnesota.

When the building itself was discussed, it was explained that the cheese coolers presently in use in the plant will be leased to DFA, for continued use.

Eventually the evaporators will be expanded, but not in the first phase. That was the attraction of this plant - the wonderful evaporator and dryers of this plant, Salazar commented.

Duplicating the plant with its existing equipment would cost 30 to 40 million dollars, he said.

"It would be a terrible waste to see the plant become just a storage facility," said Roberts.

Salazar invited the fire department members present, Chief Paul Herbolsheimer, and Brad Millerbernd, to visit the plant early-on to ensure that all things are as they should be.

The in-take section of the building would receive heavy use, three to four trucks per day in the first six months, and then 10 to 12 trucks a day as production increased.

An informal get-together was held at the Blue Note in Winsted, to meet with the former employees who may be interested in returning to work at the plant. There was a very favorable response among those present, about returning to work at the Winsted plant.

"Our hope is that within two years we will have 50 full-time jobs," said Salazar.

"We've been working with the state on job credit monies and other incentives to bring in new business or retain businesses in the community. The state has different benchmarks, and if you're going to average $12 per hour, then you are eligible for different job creation benefits. We've assured the state that we're going to do that," said Salazar.

This $12 per hour rate is to satisfy the state requirement, but we are going to maintain the wage scale that people are accustomed to, explained Salazar.

"We are definitely trying to hire back as many of the former employees as we can; they already know the equipment," he explained

Roberts also explained that there would not be an excess of employees at start-up, and that each employee would probably be cross-trained in several areas.

We estimate that in say, two years, when we have a workforce of 50, that only three to five people would be from outside of the region.

The city council gave unanimous support of the project.

A $60,000 refundable deposit will be given to the city, to be forwarded to the state, as a way to follow through with the project.

A $1,200 non-refundable fee will be paid to the city, then to the state for administrative costs.

It was reiterated that the city is showing its support for the project, but is in no way responsible for repayment of the bonds.

The city requested an extra deposit, of $2,000 to $3,000, to be kept in a separate fund, for administrative costs. The money would be returned to Natural Nutrients, possibly in full, if it is not needed.

"We want you to be proud to have Natural Chem as a part of the business community," concluded Salazar.

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