North Dakota Soybean Processors seeking final financing
JAMESTOWN, N.D. — Officials are in the last steps of finalizing plans for the North Dakota Soybean Processors plant planned for Spiritwood, according to Scott Austin, CEO of Minnesota Soybean Processors, the parent company of the North Dakota company.
Austin said the project is continuing to seek investors and has nearly completed negotiations for a strategic partnership with another company that he declined to name. Plans for the project were announced on Feb. 7, 2017, at the Northern Soybean Expo and Trade Show in Fargo.
The strategic partnership would eliminate some processes originally planned for the plant and reduce the number of products the soybean crushing plant produces, but would not reduce the amount of soybeans it purchases to process.
“The community won’t see much of a change in impact,” Austin said. “As far as the amount of money spent in the local community, those things won’t change.”
Partnering with another company would reduce the construction cost of the facility by about $30 million to $40 million, Austin said. The original engineer’s estimate for the plant was $287 million. Reducing the construction cost could improve the return on investment for the project to between 6 percent and 7 percent. The plant’s new design will require about 55 employees, about five people less than originally planned.
“I’m confident we can meet the date and move forward with the project,” Austin said, referring to a March 31 date for the closing of escrow to finance the project. “The financial piece is the last piece of the project. We have the utility agreements, we have the agreements with SEPA (Spiritwood Energy Park Association) and we have the air quality permits.”
When completed on land adjacent to the SEPA rail loop, the plant will crush 42.5 million bushels of soybeans each year, producing soy oil that can be used for biodiesel and soy meal used for livestock feed.
Approval of the strategic partnership by the boards of directors of both companies is the next step.
“The best deals are where there is an equal and mutual need,” Austin said, referring to the partnership. “We believe this is one of those times.”
Recruiting investors is continuing after a break late in 2017.
“The equity drive slowed during harvest and the holidays,” he said. “We would like to raise another $20 million but another $10 million would get us to the point we could possibly close escrow.”
While a groundbreaking ceremony could occur shortly after the closing of financing, construction wouldn’t start immediately. Instead, construction would be coordinated with work done at the facility of its strategic partner so both facilities begin operation at the same time.
"I’m confident we can meet the date and move forward with the project," said Scott Austin, CEO of Minnesota Soybean Processors, the parent company of North Dakota Soybean Processors. “In the end, a fourmonth delay to match up with another project for a 30-year life isn’t that much of a factor."
If the strategic partnership and the equity drive conclude in March, the plant would likely start buying soybeans during the summer of 2020.
Connie Ova, CEO of the Jamestown/Stutsman Development Corp., said the JSDC remains supportive of the project.
“The sooner the better,” she said, referring to any announcement on construction of the proposed crushing plant. “We just have to wait for the actual announcement.”
Austin said he realized the project has taken longer to materialize than people thought.
“The most difficult thing is to get people to stay calm because these things take time,” he said. “I’m more confident now than I’ve ever been in this project and I’ve been pretty confident since we started the equity drive.”