A New Era

January 1, 2007
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A New Era

By Andy Hanacek, executive editor

Beef Products Inc. announces plans for an expansion that will take its production to new levels and new segments.

Angling itself to expand its product line and enter new markets in the future, Beef Products Inc. (BPI), unveiled its plans for a $400 million expansion of its flagship plant in South Sioux City, Neb., slated to begin this year.
The announcement, made at a news conference Dec. 19, is expected to create 300 new jobs in the area. It comes 14 years after BPI moved its corporate office to Dakota Dunes, S.D., and caps the company’s first 25 years of business.
The new facilities will position BPI, which is best-known for its boneless lean beef products and has grown to a multimillion-dollar processor and boneless lean beef supplier, to enter new markets with innovative products. The move allows BPI to extend its unique enhancement technology beyond ground beef and into new segments.
During the event, BPI offered its latest product innovation — a new product that made this expansion necessary — lean ground beef with a fat content of only five percent. News conference attendees were offered burgers made with the product, which professes to cut the fat without sacrificing the taste. The five-percent lean ground beef product is a key driver for BPI’s upcoming expansion.
The expansion project will take up 57 acres just north of the existing South Sioux City complex, and the first phase is scheduled to break ground in early 2007. This portion of the project will help to open new markets for BPI’s product line, as it will feature a $20 million cooked meats and pizza toppings facility.
Second on the docket is a new utilities facility, which will be constructed on the site at an estimated cost of $15 million to $20 million, in order to boost operations and make the plant more self-reliant for utility needs.
The final two phases figure to be the most costly, but also the most focused on the future. First, BPI will build a $175 million production facility, which is expected to produce BPI’s new five-percent lean ground beef product. The final phase of the entire project will be construction of a beef-enhancement plant, a facility is expected to cost as much as $200 million to complete. This production facility will utilize BPI’s flavor- and safety-enhancement injection technology on beef cuts, an area BPI has been researching for years.
Of the $400 million project price tag, facility construction will take up roughly $100 million, with the rest of the investment coming from equipment and technology additions.
Recruitment of employees for the new facilities is expected to be a challenge, but local universities have pledged to help train prospective workers, and BPI is confident that it can find the qualified workforce in the Siouxland (Sioux City, Iowa) area.
The project is expected to be completed in the next three to five years.
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