JAMESTOWN, N.D. - A letter of intent from North Dakota Soybean Processors to the Jamestown/Stutsman Development Corp. paves the way for the project to move to the next step.
Scott Austin, general manager for Minnesota Soybean Processors, was in Jamestown Wednesday to sign the letter of intent.
The planned plant has an estimated cost of $240 million and will crush about 42 million bushels of soybeans each year into soy oil for biofuels and other uses and produce soy meal. The plant will employ between 55 and 60 people when operational.
Connie Ova, CEO of the Jamestown/Stutsman Development Corp. and SEPA, said the letter of intent will allow the JSDC to transfer land it owns south of the SEPA industrial park to SEPA. The letter also authorizes applications for loans to construct additional rail loop capacity at SEPA and in the land where the North Dakota Soybean processors plant will be built.
“This is the trigger for a lot of things to make sure the land is ready to roll when these guys are ready to build,” Ova said. “Everything is now in place to complete the lease agreement.”
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The planned North Dakota Soybean Processors plant at Spiritwood will have a huge advantage over other similar processors around the United States, Austin said
“This is the farthest-west crushing plant in the United States,” he said. “... there is a huge advantage to being this far north and this far west to get product to the Pacific Northwest.”
Austin said the start of construction is still on track to begin this fall but won’t start until the project meets its $60 million equity goal.
“The fundraising is going really well,” he said. “(North Dakota) Farmers Union and our partner in Mexico have put in another half million.”
The North Dakota Soybean Processors company is currently owned by Minnesota Soybean Processors, but a portion of ownership will be transferred to investors when the equity drive concludes.
Austin anticipated that up to 40 percent of the investment will come from individuals with the rest from corporate investors. Minimum investment in the project is $40,000 with the average investment so far about $50,000.
“We’ve had a really great reception within 50 miles of the plant,” he said, referring to the series of investor meetings the company has been holding.
There has been less interest in investing west of Jamestown, Austin said.
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“The farm economy is hurting us from an equity investment standpoint,” Austin said. “There is that immediate piece about the weather especially out west.”
Investors in North Dakota also have an advantage because investments in ag processing plants are eligible for North Dakota income tax credits and a Bank of North Dakota interest buydown.
“There shouldn’t be a lot of tax burden on their return,” Austin said, referring to North Dakota investors. “Can’t say that about investors from other states.”
Austin said planning and negotiations are continuing with suppliers and contractors for the project. He anticipated that all contracts for the construction and operation of the plant will be in place by the time the equity drive ends.
“It just makes sense to do this here,” Austin said.
