siouxland business journal march 2011

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Nitrogen demand keeps Port Neal plant humming

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    Vol. 21 No. 11

    PO Box 118, Sioux City, Iowa 51102

    March 2011

    Growing demand

    Port Neal nitrogen plant manager Nick DeRoos

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  • 2 Siouxland Business Journal, March 2011 www.siouxlandbusinessjournal.com

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    Ron Peterson, publisherDave Dreeszen, editor

    Siouxland Business Journal is published monthly by Sioux City Newspapers Inc., in cooperation with the Siouxland Chamber of Commerce.

    Requests for a free subscription or address changes should be sent to:Nan StettnichSiouxland Business JournalBox 118Sioux City, Iowa 51102

    Editorial copy should be sent to:Dave DreeszenSiouxland Business Journal editorBox 118Sioux City, Iowa 51102dave.dreeszen@lee.net

    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: www.SiouxlandBusinessJournal.com

    Index

    BusinessJournal

    Business Know How ........................................page 16

    Business People .................................................page 8

    Chamber anniversaries ................................... page 14

    Chamber investors........................................... page 14

    Home & Office ..................................................page 12

    On the move .......................................................page 7

    Ribbon cuttings ................................................page 18

    ON THE COVER

    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.

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  • 4 Siouxland Business Journal, March 2011 www.siouxlandbusinessjournal.com

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    BY DAVE DREESZENBusiness Journal editor

    Earlier this month, the city unveiled plans to demolish the former John Morrell plant, which closed last April.

    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.

    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.

    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

    month.Globals new 67,000-square-foot plant

    would occupy about 10 acres in the Yards 1-29 Business Park. There will be room for

    Demolition to pave way for new jobsGlobal Foods plans to build pork processing plant at former Morrell site

    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.

    Deal saves utility relocation costsGaining control of the former John Morrell site gives the city of Sioux City an added bonus.

    Morrells owner, Smithfield Foods, has agreed to turn over the 23-acre site to the city.

    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.

    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.

    Dave Dreeszen

  • www.siouxlandbusinessjournal.com Siouxland Business Journal, March 2011 5

    two other shovel-ready sites, city economic development director Marty Dougherty said.

    City officials say they are talking to other prospects interested in expanding in the park, which will be heavily landscaped.

    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.

    A weathered wood fence, erected years ago to shield the Morrell complex from the view of interstate motorists, would be removed.

    REMOVING AN EYESOREThree years ago, the city put a together a

    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.

    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.

    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.

    If all goes well, demolition could begin as early as this summer.

    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.

    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.

    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.

    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.

    TIMING IS PERFECTGlobals expansion was several years in the

    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.

    He acknowledges being wooed by other states, including neighboring South Sioux City, which offered land in its Roth Indus-trial Park.

    While he preferred to stay in Sioux City, Guest said he was running out of viable

    options until the city struck a deal for the former Morrell site.

    The timing is perfect, he said. It all hap-pened quite rapidly.

    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.

    Guest said a second plant would allow Global to diversify, adding other cuts of fresh pork, including loins and butts.

    Demand for those products are growing overseas, particularly in Australia and Japan, he said. Canada, Mex