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Published October 25, 2012, 10:48 AM

ND oilseed facility will be sold

A defunct oilseed processing plant in Northwood, N.D., will be sold at a sheriff’s foreclosure sale on Nov. 27, and the plant potentially could resume operations quickly, according to an official with the auction company handling the sale.

By: Jonathan Knutson, Agweek

A defunct oilseed processing plant in Northwood, N.D., will be sold at a sheriff’s foreclosure sale on Nov. 27, and the plant potentially could resume operations quickly, according to an official with the auction company handling the sale.

“By the end of the year, in theory, it could be up and running,” says Allison Guyton, operations manager for Maas Companies, a Rochester, Minn.-based auction company.

The former Northwood Mills opened in 2007 and closed two years later. Company officials pointed to weak demand for canola oil and higher-than-expected prices for oilseeds.

The plant initially crushed soybeans, but later expanded into canola, sunflowers, corn germ and flax, with a daily output of 200 to 300 tons. North Dakota is the nation’s leading producer of canola, sunflower and flax, and both soybeans and corn are increasingly popular with farmers in the state.

Guyton says the plant’s ability to crush a number of crops makes it more attractive to buyers.

Equipment at the 40-acre plant is in “pristine condition,” the company says.

Guyton says the facility has drawn strong interest from potential buyers inside and outside North Dakota, as well as internationally.

The plant is adjacent to the BNSF track, with space for a 30-car rail spur, according to Maas Companies.

Northwood is about 35 miles southeast of Grand Forks, N.D. Canola is grown in the Northwood area, although the majority of the state’s canola is raised to the north and west.

The plant, which employed 24 people, cost $10.2 million to design and build. Potentially, the plant could sell at a “significant savings,” according to Maas Companies.

The sale of the plant provides “a good opportunity for someone,” says Bruce Uglem, a member of the Northwood Economic Development Foundation.

The plant’s concept is sound, but it had the misfortune of “opening at the wrong time as far as commodity prices,” he says. “It’s sat idle long enough.”

The city of Northwood is hopeful the plant will reopen, according to Jeremiah Black, city auditor and administrator. He referred financial questions about the plant to Fargo, N.D.-based American Federal Bank, which has a Northwood branch. American Federal Bank was one of the original partners in the project.

Gary Hoots, senior credit officer for American Federal Bank, says the bank has foreclosed on the property.

It’s possible American Federal will end up buying the plant Nov. 27, but the bank would prefer that another party buy it, he says.

He couldn’t comment on the plant’s debts or ownership.

Russian connection

In 2010, the Sodrugestvo Group announced it had acquired a 26 percent stake in the Northwood plant. The company’s website currently lists the facility as a manufacturing asset, but it’s unclear if the company has further plans for it.

“The company is not in a position to comment at this time,” says Henry Feintuch, president of a New York City-based media relations firm that represents Sodrugestvo.

Sodrugestvo, based in both Luxembourg and Russia, describes itself as a “fast-growing Russian agro-industrial company with business partners around the world.” The company “focuses on soybean and oilseed rape processing, manufacturing of fishmeal and composite animal protein mix, imports of corn gluten and lysine, as well as distribution of products to the end consumer.”

New license is needed

When the plant shut down in 2009, it had $860,000 in unpaid bills, with most of the money owed to grain companies and area grain elevators, according to information on the North Dakota Public Service Commission website.

In February of this year, the PSC officially cancelled the plant’s warehouse license and ordered business discontinued, according to the PSC website.

Any purchaser of the Northwood plant would need to qualify for, and be granted, a new license, says Sue Richter, PSC licensing director.

The area’s canola industry would benefit if the Northwood plant reopens, says Kevin Waslaski, a Langdon, N.D., farmer and president of the U.S. Canola Association.

Demand for canola oil is strong, he says.

Typically, processing plants are more likely to succeed when their operators are well funded, Waslaski notes.

The Northwood plant will be available for inspection by appointment and at these times:

•Monday, Nov. 5 — 9 a.m. to 2 p.m.

•Monday, Nov. 26 — 9 a.m. to 5 p.m.

•Tuesday, Nov. 27 8 a.m. to 10 a.m.

More information: www.maascompanies.com

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