TAMA | A resuscitated beef plant at 2227 L Ave. in Tama resembled a hive Thursday morning, as workers busied themselves on finishing up work for an Iowa Premium Beef facility that is due to open by the end of the month.
CEO Jeffrey Johnson guided a group of about 30 media and other visitors through every part of the project, which he said will cost around $48.6 million by the time it’s done.
The new plant, designed to source as much as 800 heads of beef primarily from a 150-mile radius around this central Iowa town, is expected to provide jobs for more than 600 workers when it opens and will increase its workforce to more than 1,000 as production ramps up over a 20-month period, the company said.
“We have over 1,000 applications and have 120 employees in the plant today, plus about 200 contractors here today,” Johnson said.
Among the company employees at Thursday’s tour were Johnson, Dean Hanish, vice president and chief financial officer; Steven Armstrong, vice president of beef and trim fabrication; and Lance Bartley, vice president of sales for the U.S.
Work has been on schedule, he said.
“We’re ahead of schedule; we have a lot of construction still going on,” said Johnson, who moved into the CEO’s position in September after John Stewart, who had led the company, died.
“It was a huge loss; it was his vision,” Johnson said. “We are absolutely going to continue his vision and keep his model going.”
The operation will open about three years after Iowa Premium Beef formed and subsequently acquired the former Iowa Quality Beef plant, which closed in 2004.
It has been a long process, Johnson said.
“We sat down as a management team and talked about how we were going to rebuild this facility, how we were going to come to market, so we really did. We came back and the investors really backed up a bit to get truly, what is our plan, the whole thing, whether it’s environmental or food safety or how we were going to market. We put a lot of work into it before we really went out and said, ‘OK, now we’re going.’”
The Iowa Economic Development Authority board approved $4 million in state tax credits for the project.
Officials at the 200,000-square-foot plant report that it will start by processing about 1,100 head per day, with a maximum potential of more than 2,000.
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“We’re going to start up at five head an hour and we’re going to get to the 1,100 head in the space of 20 weeks,” he said.
The plant will operate on a five-day work week, although it could expand to six, if volume requires, Johnson said.
At full capacity, Iowa Premium Beef plans to buy about $1 billion worth of cattle each year, most of which will come from within a 150-mile radius of Tama, Johnson said.
Of the approximately 600 jobs, 120 are “incented” and are required to pay at least $15.42 an hour, per the agreement on the tax credits, according to IEDA. The company says the average line work wage is $13.50.
The work includes $29.7 million of building construction, $9 million of work renovation and $9 million of manufacturing machinery and equipment.
Seventy percent of the plant’s beef will go to domestic markets, with 30 percent exported, Johnson said.
“We’re really geared on making sure that we have a sustainable place where 600-plus people can provide for their families and their investors have a return on their investment and a community they can build and grow on,” Johnson said. “As we grow, the community grows.”
Johnson was asked about environmental concerns.
He said the company had spent $7.5 million on a new mechanical wastewater system.
“The investors and managers said we got to make sure when we go to market we’re very conscious of environmental concerns, we’re very conscious of food safety, we’re very conscious about employee safety, also,” he said. “So, we really based all of our designs in making sure we took care of those three of those things.”
The company has covered its anaerobic “lagoons,” as well, and that takes methane gas out of the environment and enables the company to retrieve the gas and put it to use in its boilers, Johnson said.
“Once it gets to the correct BTU (British thermal unit) value, we will bring it back and put it in our boilers, and it should offset 30 percent of our natural gas purchases,” Johnson said.