$555 million dairy processing operation will add nearly 300 jobs in St. Johns
ST. JOHNS — One of the largest dairy processing operations in the country is expected to open in St. Johns by 2020 creating nearly 300 jobs, state and local officials announced Thursday.
The $555 million project will sit on 146 acres in St. Johns, a portion of which was land that previously belonged to Bingham Township.
“This is a huge deal not only for the region but for the state overall,” said Jeff Mason, the director of the Michigan Economic Development Corp.
The project will have "a profound impact" on St. Johns and the agriculture development in the state for decades, said Bob Trezise, the president and CEO of the Lansing Economic Area Partnership. LEAP, a regional economic development agency that works in Ingham, Clinton and Eaton counties, first started working on the project three years ago.
“This isn’t just landing a couple businesses with jobs," said Bob Trezise, the president and CEO of LEAP. "This is establishing a new level of ag tech production that’s going to enormously impact the entire dairy ecosystem of our whole state.”
The 300 jobs will be created over three years, with positions raging from engineers to mechanics. The bulk of those positions will pay between $15 and $30 an hour, Trezise said.
Gov. Rick Snyder stood under a canopy in front of two large dairy trucks and acres of green land where the operation will be constructed in the St. Johns Industrial Park Thursday.
Snyder called the project a "huge achievement" for the state.
"The place to be is right here," he said. "I want to thank the people that are coming into our state to make this investment, and the hard-working dairy people in our state that are here that thought up the idea on how to put this great package together."
A $470 million facility will be owned by a partnership headed by Glanbia Nutritionals, a major Irish dairy producer with operations in several countries. Part of the project includes an adjacent $85 million adjacent facility belonging to Proliant Dairy Ingredients, an Iowa-based company.
Glanbia will produce primarily produce block American-style cheddar cheese and whey, among other products. The company produces cheese for several brands. Proliant produces dairy solids that are used in food and feed manufacturing.
Glanbia has partnered with Dairy Farmers of America and Select Milk Producers. Glanbia will own 50% of the milk processing facility. DFA and Select Milk, which are large dairy co-operative investors, will own the rest. The Michigan Milk Producers Association, a dairy co-op with a manufacturing facility in Ovid, will be among the milk suppliers.
The Michigan Strategic Fund board on Thursday approved an Agricultural Processing Renaissance Zone proposal, which would freeze state and local property taxes on the site for a 15-year period.
The project also will also likely receive $1 million in grant support from Michigan Department of Agriculture and Rural Development, $2 million in Community Development Block Grant funds and about $500,000 from the Michigan Department of Transportation for road work related to the project.
Trezise said the incentives and strong regional and state cooperation helped win the development for St. Johns.
"This company was looking all over the United States and all over Michigan for sites, so we competed and won," he said.
Glanbia has a similar set up at a processing facility in New Mexico called Southwest Cheese, which as of this year is processing 14 million pounds of milk per day, said John Dardis, the senior vice president of U.S. corporate affairs for Glanbia.
“The model has worked extremely well," he said. "It works. Why not bring that to Michigan?”
The project will be built on 146 acres in the St. Johns industrial park. Bingham Township transferred 55 acres of that land into St. Johns through a conditional land transfer agreement as part of the project. The project will break ground this fall, and construction should ramp up next spring. When complete, the plant is projected to process 8 million pounds of milk per day and produce 300 million pounds of cheese a year, Dardis said.
It will be in operation 24 hours a day, 365 days a year, Trezise said. Glanbia will build as part of the project a wastewater treatment plant to handle waste not used by Proliant.
Proliant has been looking for opportunities to work with Glanbia for several years, said Mark Peterson, the vice president of business development for Proliant.
Glanbia facilities are large enough that Proliant can get a "critical mass" of raw materials, Peterson said. A pipe between facilities will transfer byproducts from the Glanbia facility to the Proliant facility, he said.
“The other huge benefit is that it's fresh so the quality is at its peak," Peterson said.
The relationship between companies works like this: The Glanbia plant will take in milk and convert it into cheese, a process that results in a byproduct called whey. Glanbia will then concentrate the protein from the whey, creating another byproduct called permeate. Proliant will dry the permeate into powdered dairy solids used in making baked goods, confectionery products, beverages and animal feed.
Keeping milk in Michigan
Officials said the project could help stabilize the dairy industry in the state of Michigan. Milk prices have dropped in recent years nationwide due to an oversupply.
In recent years the Department of Agriculture & Rural Development has focused on creating more agriculture processing facilities in the state, said director Gordon Wenk.
"The more milk we can keep in Michigan, the better," he said.
About a quarter of the 2.6 billion pounds of milk produced in the state each year is sent out of state for processing, Wenk said. The new facility should be able to absorb that milk surplus along with about five years of growth, he said.
Dwight Nash's family runs a dairy farm in nearby Elsie. He said the newly-announced operation will keep milk at farms like his in Michigan, and cut back on costs associated with trucking it to sites outside the state.
Nash, 69, has been advocating for such a project in Michigan for a decade.
He said dairy farmers will feel the impact within a few years.
"It's going to feel like a breath of fresh air," Nash said. "Transportation and marketing costs will go down."
Michigan is the fifth-largest milk producer in the country. And 98% of the 1,700 dairy farms in the state are family-owned, Wenk said.
“We are encouraged by continued collaboration within the dairy industry as demonstrated by this announced investment in central Michigan," said Joe Diglio, general manager of the Michigan Milk Producers Association. "We look forward to working with the industry in servicing the needs of this project and other complementary investments we are involved with in the region.”
The size of Michigan's dairy industry and the central location in St. Johns both drew Glanbia to the area, Dardis said.
“Really it was about being where the cows are," he said. "That’s what brought us to the central Michigan region.”
The jobs created from the project will help bolster the local economy and could strengthen St. Johns' downtown, said St. Johns Community Development Director Dave Kudwa.
The facility also will offer another processing option for local dairy farmers, he said.
“Hopefully this facility will provide some incentives for the smaller dairy farms," he said. "They’re an integral part of our area. We need to have them.”
St. Johns City Commissioner Eric Hufnagel said he's hopeful the new operation could help restore some of the jobs lost when auto supplier Federal-Mogul Corporation closed its local plant more than a decade ago in the city. It employed at least 300 people, Hufnagel said.
"We're hoping to restore some of what we lost during that period in time," he said. "We see this as an important step in the development of the city."
Contact reporter Haley Hansen at (517) 267-1344 or firstname.lastname@example.org. Follow her on Twitter @halehansen.