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Published December 28, 2008, 06:00 AM

Plans for Aberdeen beef plant remain in place

ABERDEEN, S.D. (AP) - Dennis Hellwig said he remains committed to building a beef processing plant at Aberdeen, even though a credit squeeze has affected financing for a plant that is bigger and more costly than originally envisioned.

ABERDEEN, S.D. (AP) - Dennis Hellwig said he remains committed to building a beef processing plant at Aberdeen, even though a credit squeeze has affected financing for a plant that is bigger and more costly than originally envisioned.

Hellwig said he is still the primary investor in Northern Beef Packers and hopes it will begin processing cattle in May - a year later than first thought.

The size of the plant has been expanded from a daily processing capacity of 700 head to 1,500 head. Hellwig said that led to extra site preparation and extra cost.

As the cost increased, the financing remained unfinished. As the economy started to sour, financial institutions restricted their lending. Now, getting the needed money is difficult and slowed work at the plant, Hellwig said.

He said he had access to all the needed money early in the process, but he didn't finalize it.

"That's my mistake," he said.

Early reports of the plant costing $40 million are low, but Hellwig declined to give a final total, in part because the cost isn't yet final.

Hellwig said 66 Koreans have invested through a program called EB-5 that allows them green cards for $500,000 investments in certain agricultural endeavors. Four more investors are expected, Hellwig said. With them, the plant has access to $35 million.

A financial aid package from the state has not been finalized.

The state is willing to contribute roughly $8 million in the form of bonds and/or other financing, but no money has yet been committed, according to the Department of Tourism and State Development.

When processing starts, the plant will slaughter 200 to 300 head of cattle a day. Much of that meat will be shipped to Korea, Hellwig said. Some will also go to the United States and Japan. Some might even go to Mexico, he said.

Hellwig said 200 to 300 employees will be needed initially, with employment growing to 500 or 550 as the plant reaches production capacity.

Three mechanic's liens have been filed against Northern Beef Packers, including one for $2.1 million. The plant and Scott Olson Digging of Huron are in a dispute over how much the contractor is owed for site preparation work.

The two newer claims are from North Dakota contractors - one for $920,916 for erection of a pre-engineered steel structure and other work, and the other for $592,767 for work on a carcass cooler.

Hellwig said the two smaller liens involve minor disputes about charges and will be "very easy to settle."

Northern Beef Packers and Scott Olson Digging are not close to an agreement, he said.

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Information from: Aberdeen American News, http://www.aberdeennews.com

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