Siouxland Business Journal March 2011

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Nitrogen demand keeps Port Neal plant humming


<ul><li><p>Simplified. Secure. Networking.see the difference with us.</p><p>See our ad on the next page.</p><p>Vol. 21 No. 11</p><p>PO Box 118, Sioux City, Iowa 51102</p><p>March 2011</p><p>Growing demand</p><p>Port Neal nitrogen plant manager Nick DeRoos</p><p>AGRI-BUSINESS ISSUE</p></li><li><p>2 Siouxland Business Journal, March 2011</p><p>the rules of</p><p> networkin</p><p>g.</p><p>Elite Partner</p><p>Networking</p><p>HP is changing networking.</p><p>Gone are the days of networks that are hard to manage, vulnerable to attacks, and expensive to maintain. With HP game-changing solutions, the status quo is history.</p><p>The New Rules of Networking</p><p>#1 Simplified network designs that are twice as secure1</p><p>#2 Up to 2x better performance for greater flexibility2</p><p>#3 Up to 65% lower cost of ownership3</p><p>Put the new rules to work for</p><p>Outcomes that matter.</p></li><li><p> Siouxland Business Journal, March 2011 3</p><p>20% Off a Regular Priced Item Every MonthThe latest top fashions at Midwest prices.</p><p>Great gift ideas and gift cards.Ring and Bling, Accessories, Purses, Shoes, Belts, </p><p>Sunglasses, Chunky Jewelry for all occasions.</p><p>Locations: Urbandale, Centerville, Mt. Pleasant, Muscantine, Oskaloosa and NOW Sioux City.</p><p>Monthly Give-A-Aways, Sales and New Merchandise Arriving Monthly.</p><p>Locally owned: Tami Smith - Owner</p><p>Ladies Are You Ready For Some Cute Stuff?THERE IS A NEW GIRL IN TOWN!!</p><p>Securities and Insurance products offered through Primevest Financial Services an </p><p>We listen to your goals, then we create a strategy designed to help you get there.</p><p>Mutual FundsRetirement PlansLong Term Care InsuranceLife InsuranceFixed and Variable AnnuitiesTax-Advantaged Investments</p><p>Contact one of our Financial Consultants today about carefully considered solutions. Call (712) 277-6769</p><p>Ron Peterson, publisherDave Dreeszen, editor</p><p>Siouxland Business Journal is published monthly by Sioux City Newspapers Inc., in cooperation with the Siouxland Chamber of Commerce.</p><p>Requests for a free subscription or address changes should be sent to:Nan StettnichSiouxland Business JournalBox 118Sioux City, Iowa 51102</p><p>Editorial copy should be sent to:Dave DreeszenSiouxland Business Journal editorBox 118Sioux City, Iowa</p><p>For more information:Editorial: (712) 293-4211 or 800-397-9820, ext. 4211Advertising: (712) 224-6275 or 800-728-8588Circulation: (712) 293-4257 or 800-397-2213, ext. 4257On the web:</p><p>Index</p><p>BusinessJournal</p><p>Business Know How 16</p><p>Business People 8</p><p>Chamber anniversaries ................................... page 14</p><p>Chamber investors........................................... page 14</p><p>Home &amp; Office 12</p><p>On the move 7</p><p>Ribbon cuttings 18</p><p>ON THE COVER</p><p>Business Journal photo by Jerry Mennenga Nick DeRoos is shown at CF Industries Port Neal nitrogen complex. DeRoos was promoted to plant manager last October. </p><p>Nicpla</p></li><li><p>4 Siouxland Business Journal, March 2011</p><p>If youre uncomfortable with your teeth, you could be holding back who you really are. But Invisaligns clear, custom-designed aligners can be an inconspicuous way to get a beautiful new smile. So check with an </p><p>experienced Invisalign provider and let the real you bloom with a new smile.</p><p>New patients are welcomed!</p><p>HOLDING BACK IS A THING OF THE PAST A NEW SMILE LETS YOU BLOOM</p><p>March is</p><p> monthSAVE DURING THE WHOLE MONTH OF MARCH WITH OUR </p><p>SPECIAL PROMOTIONAL PRICING!</p><p>Call today to set up an initial consultation.</p><p>WHEELOCK, BURSICK &amp; GIESEDentistry</p><p>4100 Morningside Ave. (Across From McDonalds)</p><p>(712) 274-2038 OR (800) 728-2038</p><p>BY DAVE DREESZENBusiness Journal editor </p><p>Earlier this month, the city unveiled plans to demolish the former John Morrell plant, which closed last April.</p><p>The 23-acre site will be redeveloped as an attractive business park. The city has signed up its first tenant, Global Foods Processing, which plans to build a new pork processing plant there.</p><p>The project would allow Global, which has operated in Sioux City for 17 years, to expand its product line and nearly double its work-force. The family-owned business, which sells 85 to 90 percent of its products abroad, will keep operating its 175-employee plant along Cunningham Drive.</p><p>I have more demand than I can satisfy at our current location, not only for prod-ucts we produce now, but for others, Glob-al owner David Guest in an interview this </p><p>month.Globals new 67,000-square-foot plant </p><p>would occupy about 10 acres in the Yards 1-29 Business Park. There will be room for </p><p>Demolition to pave way for new jobsGlobal Foods plans to build pork processing plant at former Morrell site </p><p>Submitted renderingThis rendering shows the new landscaping and buildings planned for the former John Morrell site. The largest building depicted would be Global Food Processings proposed pork processing plant. </p><p>Deal saves utility relocation costsGaining control of the former John Morrell site gives the city of Sioux City an added bonus.</p><p>Morrells owner, Smithfield Foods, has agreed to turn over the 23-acre site to the city.</p><p>The acquistion creates an immediate savings of $463,000 in utility work related to the reconstruction of the adjacent Interstate 29, according to city officials.</p><p>The Iowa Department of Transportation, which plans to widen and improve the inter-state through the downtown area, is requir-ing the city to relocate water and sewer lines that run beneath the existing pavement. If not for the Morrell deal, the city would have been required to acquire right-of-way from the meatpacker.</p><p> Dave Dreeszen </p></li><li><p> Siouxland Business Journal, March 2011 5</p><p>two other shovel-ready sites, city economic development director Marty Dougherty said.</p><p>City officials say they are talking to other prospects interested in expanding in the park, which will be heavily landscaped.</p><p>A site plan prepared by the city shows a new tree-lined street along the western boundary of the Morrell property, parallel to Interstate 29. The design also calls for the planting of additional trees and green spaces.</p><p>A weathered wood fence, erected years ago to shield the Morrell complex from the view of interstate motorists, would be removed.</p><p>REMOVING AN EYESOREThree years ago, the city put a together a </p><p>multimillion-dollar incentive package, in-stalled extensive utilities at a new site and worked to pass at least two new state laws in a herculean effort to convince Smithfield to relocate its aging plant to an industrial park in the southern part of town.</p><p>The $200 million project, which would have been the richest economic develop-ment deal in the citys history, would have created 400 new jobs. But in the summer of 2008, Smithfield Foods abruptly walked away from the negotiation table and never returned.</p><p>After the plant closed last April, city lead-ers spent months negotiating with Morrell officials about the future of the site. The company eventually agreed to turn over the property to the city.</p><p>If all goes well, demolition could begin as early as this summer.</p><p>To finance the tear down and other clean-up costs, the city has applied for a $2 mil-lion grant from the Economic Development Administration. City officials expressed op-timistic about securing one of the competi-tive grants the federal agency awards for job creation projects.</p><p>Because of the large job losses from the Morrell closing, the EDA has designated Sioux City as an economically distressed community, which raises the citys ranking on a formula the federal agency uses to award the federal dollars, City Manager Paul Eckert said.</p><p>In addition to its unsightly appearance, lo-cal residents had long complained about foul odors from the Morrell plant, which had the capacity to kill up to 14,000 hogs per day. That is not an issue with Global, which buys its fresh meat from other companies.</p><p>Theres absolutely no odor produced by our operation, either here or at the new one, Guest said. Were not even doing any cook-ing or curing.</p><p>TIMING IS PERFECTGlobals expansion was several years in the </p><p>making. Guest said he initially considered building an addition to his existing plant, but there was not sufficient adjacent land to do so, partly due to the facility abutting the Floyd River channel.</p><p>He acknowledges being wooed by other states, including neighboring South Sioux City, which offered land in its Roth Indus-trial Park.</p><p>While he preferred to stay in Sioux City, Guest said he was running out of viable </p><p>options until the city struck a deal for the former Morrell site.</p><p>The timing is perfect, he said. It all hap-pened quite rapidly.</p><p>The Morrell land, he said, has all the at-tributes that are essential to our future plans for expansion and diversification, including close proximity to the companys existing plant, and access to rail. A main line of the Union Pacific runs through the Morrell site, which also features a track switch.</p><p>Guest said a second plant would allow Global to diversify, adding other cuts of fresh pork, including loins and butts.</p><p>Demand for those products are growing overseas, particularly in Australia and Japan, he said. Canada, Mexico, Russia and New Zealand are among other countries Global exports to.</p><p>In addition to added processing, the new facility would for the first time provide Glob-al with its refrigerated warehouse space. The company currently sends its meat to local public cold storage warehouses.</p><p>Guest said Global will be ready to start construction as soon as the city finishes preparing the site. Groundbreaking likely will begin late this fall or early next spring, with completion anticipated eight to nine months later.</p><p>The new plant would initially employ around 60 people, and create up to 175 to 200 new jobs in the first two years, Guest said.</p><p>Dougherty said the city is preparing a de-velopment agreement to assist Global Foods with its expansion. The city has provided fi-nancial incentives to the company on two previous occasions, when the plant first opened and then for a later expansion.</p><p>The Morrell demolition and redevelop-ment is the citys latest investment in the former stockyards area, which the city has renamed The Yards.</p><p>In recent years, the city has razed a series of antiquated packing plants, including KD Station last year. The cleanup has led to the development of a new Home Depot, and two warehouse distributors Johnston Supply and Van Meter Industrial.</p><p>IMAGINE THE VIEW...PRIME OFFICE SPACE</p><p>FOR LEASING INFORMATIONTerra Real Estate CorporationTerra Centre - 600 Fourth St.Sioux City, IA</p><p>- Fully Furnished 1 &amp; 2 Room Executive Suites Ready for Occupancy</p><p>- Larger Offices Designed to Your Specifications</p><p>- Competitive Pricing- Onsite Building Management</p><p>Journal photo by Dave Dreeszen / Find more photos and buy copies at Global Foods Processing employs about 175 people at its existing pork processing plant, above, along Cunningham Drive. The company plans to nearly double its workforce by building a second plant at the former John Morrell site, which the company acquired earlier this month.</p><p>By the numbers</p><p>0Cost, in dollars, for the city of Sioux City, to </p><p>acquire the former John Morrell site</p><p>2Size of federal grant, in millions of dollars, </p><p>the city is seeking to help finance demolition of the antiquated plant</p><p>10Cost, in millions of dollars, of the new plant Global Foods Processing is planning for a </p><p>portion of the former Morrell site</p><p>175-200Number of new jobs Global expects to create </p><p>over the first two years </p></li><li><p>6 Siouxland Business Journal, March 2011</p><p>BY DAVE DREESZENBusiness Journal editor </p><p>Area farmland values soared to all-time highs in recent months, with few signs of peaking yet.</p><p>In Iowa and eastern Nebraska, average values rose 16 percent and 10 percent, respectively, in the last half of 2010, compared to a year earlier, according to a survey by Farm Credit Services of America, the largest agriculture lender in the two states.</p><p>Some of the nations most ex-pensive land is found in Northwest Iowa, where a series of post-har-vest auctions have netted $9,000 or more per acre. One 80-acre tract in Sioux County brought an eye-popping per-acre price of $13,950 in November.</p><p>Skyrocketing agricultural com-modity prices, historically low interest rates and hot demand for scarce high-quality ground are combining to the land boom. In the latter half of 2010, prices for corn </p><p>and other crops nearly doubled, as exports from emerging nations and increased domestic etha-nol production boosted demand, while droughts and other weather </p><p>calamities reduced global supplies to near record lows.</p><p>The big run-up in prices came as most area corn and soybean pro-ducers brought in above normal </p><p>yields last fall.We have some farmers who have </p><p>done extremely well, said Roger Klingensmith, an ag lender at Se-curity National Bank in Sioux City. That means they have cash that they can reinvest in land, which can continue to support the price going forward.</p><p>Producers looking to expand far outnumber existing landowners wanting to sell, however.</p><p>Were seeing very strong de-mand for farmland with a very limited supply, said Lee Vermeer, vice president of real estate sales for Farmers National Co., which specializes in agricultural real es-tate. In most areas, were seeing the amount of land available down a third or half from historical lev-els.</p><p>The same low interest rates that have reduced borrowing costs for purchases have given retired farm-ers and absentee owners an incen-tive to put their land on the market. </p><p>If youve got ground, why would you sell it when theres nowhere else to put your money, where it would earn any better? said Iowa State University Extension econo-mist Mike Duffy, who conducts an annual farmland value survey. Outside investors, such as large hedge-fund managers, have in-creasingly become bullish on farm-land because it offers a better rate of return than government-insured instruments such as U.S. Treasury bonds and less risk than even blue-chip stocks.</p><p>Amid growing fears over a de-clining U.S. dollar and record fed-eral budget deficits, many investors view farmland as a hedge against inflation fears.</p><p>It makes more sense for me to invest in land than gold or silver or anything else, Le Mars auc-tioneer Bruce Brock said. At least while youre holding on to it, youre </p><p>ANKRUPTC USINESS LA OMMERCIAL LA ONSTRUCTION LAMPLOYMENT LA NERG NVIRONMENTAL LA WILLS, TRUSTS, ESTATE PLANNING AND PROBATE AMILY LA OVERNMENT CARE </p><p>LA NSURANCE NTELLECTUAL PROPERT ITIGATION ERGERS AND ACQUISITION RODUCT LIABILIT SSIONAL LIABILIT EAL ESTATE SECURITIETAXATION WORKERS COMPENSATION</p><p>R O. GREGERSON WILLIAM G. TAYLOR ARY P. T SEN RADLEY C. GROSSENBURG AMES M. OMET ARALDSON OGER W. DAMGAARD AVID C....</p></li></ul>