3M stokes boom in Brookings with $70M deal

Brookings has hit it big again.

As the city prepares to officially welcome cheese maker Bel Brands USA today, longtime employer 3M Company will announce a $70 million expansion.

"It makes for one heck of a day," Mayor Tim Reed said.

The 3M deal, while it had been discussed for years, came together only within the past two weeks.

"And we've been working with them for the better part of a year and half," said Pat Costello, commissioner of the Governor's Office of Economic Development. "Once it became clear very, very recently this convergence was coming together, we decided: Let's really celebrate in Brookings."

In a statement from his office, Gov. Dennis Daugaard said, "Christmas came early for Brookings this year," adding that the Bel project is the largest capital expenditure in the company's history.

"That is something we here in South Dakota are very proud of," Daugaard said.

On a day designated nationally to recognize the manufacturing sector, Brookings will be an epicenter of activity in the state.

■ Paris-based Bel Group will inaugurate its Mini Babybel facility, a $144 million investment that is expected to employ 250 people by the end of the year.

■ 3M will announce a $70 million expansion of its plant that will be done in phases through 2018 and create almost 90 new jobs.

■ South Dakota State University will break ground on a new swine teaching and research facility. The $5.5 million project will include advanced learning and research capabilities.

■ Local manufacturer Counterpart will open its most recent addition, a 30,000-square-foot expansion.

"We've stopped talking brain drain and realized we've got brain gain," said Reed, who points to the city's workforce for helping attract so much new industry.

Costello credits cooperation. The state and city put various packages of incentives together for the businesses, and business leaders encouraged their counterparts to invest in Brookings even if it meant competing for workers.

"This is what happens when all those people get together and work for a common goal," Costello said. "Everybody got behind it. Competitors in the marketplace for workforce got behind the deal. They understood the greater good of attractive business to the community in the name of providing better jobs and better opportunities."

Medical growth drives 3M

Since 3M began operating in Brookings in 1971, the plant has produced medical products. The sector's growth combined with the plant's productivity allowed it to land millions in new investment ahead of operations in Canada, Mexico, Germany and China.

"There's a lot of competition inside 3M for this kind of large investment," said Ann Getting, the plant's manager.

Getting, a 25-year 3M veteran, accepted the job in Brookings from Kentucky without having visited the plant based on its reputation in the company.

"The people in this plant have delivered fantastic results over a long history," she said. "This plant really delivers."

Part of the expansion is almost operational. The company invested $11.7 million in new equipment that is being installed and scaled up as 29 jobs will be added. The equipment, however, is being squeezed into the current facility.

The new addition will add 44,000 square feet and more than $40 million in new equipment to manufacture medical tapes and dressings. Construction is expected to start in April, and equipment installation will last through 2018. It's the first significant addition since the building was completed in 1991.

"In the last 18 months, we've had an unprecedented number of new 3M medical products in this plant, and we're very excited because they're taking off and getting terrific market acceptance, so we're seeing the business grow," Getting said.

Incentives from the state and city helped get the deal done, those involved said. 3M Brookings will get a sales tax rebate on equipment and building construction materials from the state as well as help with job training costs. The city of Brookings is expected to provide a sales tax rebate, and Brookings County is providing a five-year property tax discount.

"That got attention with our corporate executives," Getting said. "And there is a comprehensive plan with 3M Brookings being the hub for North America."

Manufacturing cluster

There's also some synergy with newcomer Bel. The cheese producer is a 3M client that uses 3M food safety products in testing.

Representatives of both businesses have toured each other's facilities.

"I think we already have a wonderful relationship," Getting said. "It's wonderful for our people to see how our products are used and how very important they are in the quality of food products."

The new 170,000-square-foot Brookings facility will produce Mini Babybel cheese. The product represents one third of the company's volume. Sales last year increased 24 percent.

"The inauguration of our third plant in the United States is a historic event for the group," said Antoine Fievet, Bel's chairman and CEO, in a statement. "It incarnates our willingness to dare, which is one of our company values."

South Dakota competed with four other states for the plant. An expansion in a few years might increase the Brookings workforce to 400 people, depending on market conditions.

"Having an international brand like Bel Brands in the state of South Dakota in a significant way, providing very good jobs, helps the state market ourselves to like or similar businesses in manufacturing," Costello said. "Other people considering the state can look at that and say there's a reason why these guys just invested $140 million. There must be something there. We should go look."

The community also is celebrating manufacturing on a smaller scale.

Industrial metal fabricator Counterpart Inc. has expanded three times since it was founded in 1996, most recently added 30,000 square feet for a total of 80,000.

"We help make our customers make their parts manufacture-able today's technology," said Don Deibert, president and general manager. "We have probably the most state-of-the-art equipment, period."

The company employs more than 70 people and has customers that include large regional employers such as Daktronics and Raven Industries.

"The town is very workable in what we do," Deibert said. "They've been very supportive in industry growing."

While much of the day will be spent celebrating new jobs and buildings, economic development in an ongoing process and the next big deal might come from the project breaking ground, Mayor Reed said.

The new swine teaching and research facility is designed to appeal to industry.

"One of the major things Bel liked was we have a strong dairy program," Reed said. "The swine unit will help improve our swine program. What's the next business we will get here because of that facility? Anywhere in the region. It doesn't have to be Brookings. We all win."

Read more: Brookings builds on success to draw more business