It’s happening at Raven
H2O versus energy
Minot BREAKthru
pg.18
pg.40
pg.48
$ports are a gold mine Sports play a major role in the economy
www.prairiebizmag.com
pg.40
DISABILITY
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RECRUITMENT • RETENTION ~ RESULTS D I V I S I O N O F V O C AT I O N A L R E H A B I L I TAT I O N Recruitment & Retention
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CONTENTS
Volume 11 No. 10
22 A winning formula
The company has achieved success with a winning combination of a good product, an excellent reputation and employees who pay attention to detail. - By Dee Goerge
24 Shaping ND energy
EmPower North Dakota’s goal is to be creative thinkers for North Dakota energy. - By Jesse Bradley
39 Bountiful harvest expected
If there is a very good crop, farmers and rural areas could see money in their pockets this winter. - By Alan Van Ormer
26
Cover Story: Sports are a gold mine Sports have a major role in the economy of communities in our region through infrastructure, branding, and reaching sports enthusiasts. By Alan Van Ormer
Company Profile: 18 Raven Industries
Change is happening in a major Sioux Falls company. By Alan Van Ormer
48 BREAKthru in Minot
The 2010 North Dakota Governor’s Rural Community Summit not only provided community economic development leaders around the state an opportunity to network, but, it also provided a chance to educate these same economic development leaders. - By Alan Van Ormer
Profile: 34 Community Willmar, MN Willmar is a regional hub in central Minnesota and hopes to reach out to more than 3 million people within a two-hour driving distance. By Alan Van Ormer
40 H2O versus energy
As the demand for energy increases, water becomes an important part of the equation. - By Alan Van Ormer
IN THIS ISSUE 6 From the Editor’s Desk 8 Women in Business 8 Matthew Mohr
10 Prairie News 14 Prairie People 16 Question/Answer: Sen. Dorgan
NEXT MONTH Check out our November issue and find out what a couple of communities in the western Dakotas are doing to improve a standard of living, learn how a shovel-ready program helped a Minnesota community build a business park, and understand how two research corridors are growing driving an economy. It is all about rural and economic development.
4
October 2010
52 Viewpoint 54 By the Numbers
ON THE AIR Join Prairie Business magazine Editor Alan Van Ormer and host Merrill Piepkorn on Wednesday, Oct. 6 at 3 p.m. on any Prairie Public radio station to hear more about the October cover story on the major role that sports plays in our economy. To listen to Prairie Public, visit www.prairiepublic.org/radio/hear-it-now.
44 Blowing in the Wind
For each 10 wind turbines constructed in South Dakota, there will be one job. This is one form of economic development in a sparsely populated state. - By Alan Van Ormer
46 Nice option for moving oil Though they may lack the efficiency of a pipeline, railroad systems have become the next best option for moving large amounts of oil between regions. - By Maxine Herr
Almost 50 years ago, Basin Electric began its service to rural America as our membership developed the hydroelectric and lignite projects that are the bedrock of the Midwest’s energy foundation. Today, we build on that strong legacy, diversifying our energy portfolio to include wind, natural gas and zero-emissions waste heat. These green projects represent a capital investment of more than $1 billion in renewable resources. By 2011, we’ll have wind and green generation throughout North Dakota, South Dakota, Minnesota, Montana and 51%/ %!+# /3 !3-+/77'( )/0/)!+" 1& 41.' +#/3 86* 2$ , enough to power more than 262,500 homes on an annual average basis. Why? Because we believe being green is more than a catchy phrase. It has to be.
ALAN VAN ORMER
The dating game I
FROM THE EDITOR’S DESK
remember watching the Dating Game as I was growing up. It was the show that had either a woman or a man asking different questions to three others (of the opposite sex) trying to find the perfect date. The two groups were divided by a curtain so that the one person asking the questions could not see the other three behind the curtain. That one person just had to choose the date based on the answers. It seemed to work then. And it also seemed to work at the recent 2010 North Dakota Governor’ Rural Community Summit in Minot in August. This Dating Game was a bit different. There was still a host: in this case, Julie Curtin, partner, Development Counsellors International in Denver, CO, and two bachelors: Paige Webster, Foote Consulting in Phoenix, AZ, and John Castro, MaximusAlliance in Dallas, TX. There were also a few chuckles from the answers given to the questions asked. But the main difference was that six North Dakota communities were represented to win a date with one of the bachelors. In this case, the date was a dinner to sit and discuss economic development issues for the winning community. The questions helped provide an understanding of what each community had to offer and what would make a site selector, like the two bachelors, recommend that community to the groups they work with. It turned out to be a fun time for those involved and also those watching the reactions to questions and answers. More importantly, from my perspective, it showed me a lot about what these rural communities have to offer in the state of North Dakota. These economic development leaders are well versed in what their communities are and what they could become if the right situation occurred. Afterward, both bachelors agreed that they learned a lot about those six communities that they could bring back to the groups that they work with that are looking to expand or start up a new company. In fact, one mentioned there were neat things that he never knew about North Dakota; not only from the Dating Game, but also from the two-day conference.
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October 2010
An SBA Award Winning Publication Mike Jacobs, Publisher Alan Van Ormer, Editor Scott Deutsch, Sales Manager Tina Chisholm, Production Manager Jen Braaten, Marketing Coordinator Beth Bohlman, Circulation Manager Kris Wolff, Layout Design, Ad Design
NATIONAL ACCOUNT SALES/SALES MANAGER:
Scott Deutsch
They now know North Dakota’s story and can pass it along to others. Being it was my first time attending such a conference in the state, I was also impressed with what all of these communities have to offer. As an editor, there are many communities out there that have stories to tell. My hope is that I will be able to tell these stories in one form or another in Prairie Business magazine. The Dating Game was a fun way to get to know more about those six communities, but it also shows how tough it is for communities around North Dakota, South Dakota, and Minnesota to tell their stories. Welcome to energy As you all might know by now, this October issue is the first one that has pages that deal specifically with energy issues. In the following pages, you will learn more about water and energy around the region, oil and railcars in North Dakota, and wind energy in South Dakota. In the last month or so, our sales manager, account managers, and myself have talked to numbers of people associated with the energy industry to get their thoughts on what is out there. It is mind-boggling all of the information associated with the energy industry. Water and energy cannot be without each other. Where there is an ethanol plant, there has to be water to help make the ethanol. Where there is a coal-fired plant, there needs to be water to cool the plant. And water is also needed to help with oil fracking. As you can imagine, this use of water also puts a burden on other water users. There are issues and challenges, but it is good to know that everyone is working together to make it work. We, at Prairie Business magazine, are excited about this new opportunity to tell the stories of the energy industry. For us, it is going to be a learning experience. We hope that you will learn more about the energy industry, just as we are.
SALES:
Brad Boyd
701.232.8893 Grand Forks/Fargo/Moorhead/northwestern MN
800.641.0683 Bismarck-Mandan/ west central ND/north central SD
John Fetsch
701.232.8893 Fargo/Moorhead/eastern ND/western MN
Jeff Hanson
605.212.6852 Sioux Falls/southern SD/southern MN
EDITOR: Alan Van Ormer
Editorial Advisors:
701.232.8893 avanormer@prairiebizmag.com
Ann Reich, North Dakota Bankers Association, Bismarck; Hiram Drache, Historian-In-Residence, Concordia College - Moorhead; James Ferragut, Fargo,ND; Tom Shorma, President, WCCO Belting - Wahpeton; Karen Froelich, Professor, College of Business Administration, NDSU Fargo; Bruce Gjovig, Director, Center for Innovation, UND - Grand Forks; Steve Rendahl, Associate Professor, UND School of Communication Grand Forks; Matthew Mohr, president/CEO, Dacotah Paper Company Fargo; Julie Fedorchak, Communications Manager, North Dakota Department of Commerce - Bismarck, ND; Mary Batcheller - Greater Fargo Moorhead Economic Development Corporation, Fargo, ND;Megan Olson, President/CEO, Watertown (SD) Area Chamber of Commerce Prairie Business magazine is published monthly by the Grand Forks Herald and Forum Communications Company with offices at 808 3rd Ave. S., Ste. 400, Fargo, ND 58103. Qualifying subscriptions are available free of charge. Back issue quantities are limited and subject to availability ($2/copy prepaid). The opinions of writers featured in Prairie Business are their own. Unsolicited manuscripts, photographs, artwork are encouraged but will not be returned without a self-addressed, stamped envelope.
Subscription requests: Free subscriptions are available online to qualified requestors at www.prairiebizmag.com.
Address corrections:
Prairie Business magazine PO Box 6008 Grand Forks, ND 58206-6008 bbohlman@gfherald.com
Online: www.prairiebizmag.com On the cover: Regionally, sports are becoming such an important part of the economy that Midcontinent Communications feels it is large enough to start a sports network that covers all aspects of local sports.”
Dig. Dig harder. Dig deeper. Keep digging. If you own a business, hey, that’s what you signed up for. Today, it’s a lot harder. It’s not business as usual. It shouldn’t be banking as usual. At Bremer Bank, we’re ready to pick up a shovel and put our backs into it. Let’s work together. Let’s take action.
Call 1-800-908-BANK or visit Bremer.com. Member FDIC. ©2010 Bremer Financial Corporation. All rights reserved.
WOMEN IN BUSINESS BON WIKENHEISER – DIRECTOR, NORTH DAKOTA SMALL BUSINESS DEVELOPMENT CENTERS, BISMARCK, ND What was your career path? I have a degree in nursing, but after graduating, there were no nursing jobs. I started working in a small North Dakota town doing home health consultation. As my children grew older, I started a restaurant and catering business. I did that for 17 years before earning my MBA. While working at the Harold Schafer Leadership Center at the University of Mary, I started an internship program with the ND Small Business Development Center. When the state director resigned, I took the position in 2006. What do you like most about your job? I am amazed at the ingenuity that North Dakota businesses have, the expansion plans, and the innovation. That creativity and zeal are contagious. It is inspiring to hear the stories companies share and the plans they are working on. What does it mean to be in charge of small business development? SBDC is there to support entrepreneurs. When someone has an idea, SBDC consultants help them refine their plan. A big part of what we do
involves working financing options and preparing businesses to get the money they need to operate. The ND SBDC is one of 63 nationally accredited programs, and is based at the University of North Dakota since 1986. My role is to support the regional offices and maintain the integrity of the program. What impact do the centers have on the region? Currently, there are nine full-time centers and two satellites. We will be adding 11 satellites in 2011. Last year, our clients realized $83 million in funded projects, worked with more than 1,200 clients and spent more than 9,000 hours of direct one-on-one consultation with our clients. We will surpass those metrics in 2010, easily. What is the fun part of the job? Three things: the clients, the SBDC team and the diversity. The clients are the reason we exist, and they drive every initiative I work on. The business consultants are incredibly gifted and experienced. Every area is it own microcosm of activity. I like the bright eyes, big ideas and the diversity I see. What is the challenging part of the job? Two things: telling the client success story and the lack of timely business research. When told, I think those stories will encourage others, spur economic development, and probably inspire more creative innovation. Traditional sources do not provide industry-specific data quick enough. All businesses need that information to grow. SBDC needs that research to better prepare to help our clients. What are some lessons that you have learned? The lesson that helps me most is surrounding myself with a team that is better than I am; people who are smart and speak their mind. Our success is built on trust and mutual respect, and an atmosphere that fosters growth for everyone associated with the SBDC.
MATTHEW MOHR
Working with Parents F amily owned and operated businesses seem to be an endangered species. Working in a family business has unique challenges and may offer special opportunities for family members. Allowing a new generation of the family to participate in a business endeavor can be easy or hard for the older generation used to having control. Younger family members often come with new ideas and opinions which seem foreign or doomed to fail by the older more experienced business owners. As a result of the inherent conflict of family ownership, along with financial pressure and changing market conditions, few businesses survive the transition from first to second generation family ownership, and fewer still from second to third. Family ownership by a fourth or fifth or longer line is rare. Most people who have worked in a family owned business will share tales of experiencing conflict (slammed doors, loud arguments, drug/alcohol abuse) and a host of other family issues arising during business hours. My story is pretty typical of a family business ownership transition, though I hope to make it better for my children than it was for me. Being the third generation owner of an enterprise, I have a great desire to pass the torch to one of my children, and I have made it clear to my children that only one will work with me at any particular enterprise. My plan is to treat my children fairly and equitably based on their contributions and ability. My eventual goal is to help each of my children become established, independent, and societal contributors. Moving from the third generation (me) to a fourth (my children) will
8
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not be easy nor is it assured. A great local example of a super successful business transition was demonstrated when John Runsvold bought the family funeral home from his father. According to John, his father, who is still living) never interfered with John or John’s plans, and as a result John has had the ability to continue a long standing tradition of business success and their high local family reputation. John’s father was unique in his “hands off ” approach to the business transition, perhaps because he wasn’t afforded the same flexibility. Children do not always treat parents with respect during or after times of transition, I have two business associates who are third generation owners who have built great enterprises; one doesn’t have a place for his father in the business, the other insures his father comes into the office regularly despite the father having substantial disabilities which resulted from a stroke. Both took different approaches to dealing with their fathers and work, yet both have experienced tremendous success. Each family business deals with ownership and control transitions differently, some successfully, others not. Regardless of how a business transition is attempted, few succeed and those that do are very fortunate, but each family must blaze its own path. Mohr can be reached at mmohr@dacotahpaper.com.
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PRAIRIE NEWS
(Press releases and photos about business news and events in North Dakota, South Dakota and western Minnesota can be e-mailed to avanormer@prairiebizmag.com for consideration)
MOORE ENGINEERING CELEBRATES 50 YEARS Moore Engineering, Inc. (MEI) celebrated its 50th anniversary with an open house highlighting projects, clients, and the employees who have been key to the firm’s impact on water, municipal, and transportation infrastructure in the region. Kip and Marshall Moore founded the company on Sept. 1, 1960. Both served in the North Dakota National Guard and both pursued civil engineering at North Dakota State University. More than 900 employees have been part of the company since 1960, and the longevity of the staff has factored in the long-term relationships and reputation of the company. The firm offers professional engineering, management, and consulting services for airports, geographic information systems, land and site development, municipal, surveying, transportation, water resources, and water and wastewater systems.
RESEARCH FUNDING REACHES $35 MILLION AT SD TECH In Fiscal Year 2010, researchers with the South Dakota School of Mines and Technology in Rapid City, SD, were awarded more than $35 million in research and development funding. This is the highest amount in the history of the university, according to a university press release. The university received nearly $21 million in FY-2009. University researchers received 91 awards averaging more than $388,000 from federal and state agencies, corporations, and direct Congressional appropriations. The awards represented 23 departments, centers or labs, and were awarded to 47 principal investigators.
MINNESOTA’S FIRST HEALTHCARE HOMES CERTIFIED The Minnesota Department of Health has certified the first 11 healthcare homes in regions around the state. Also known as ‘medical homes’, the facilities offer a team approach to primary care making it easier for patients to communicate and partner with their care team, according to a MDH press release. Care teams include clinicians, nurses, specialists, pharmacists, care coordinators, and community resources.
MINER COUNTY DEVELOPMENT CORPORATION SELECTED FOR FUNDING The Miner County Development Corporation broke ground on a new hotel and convention center complex recently with assistance from the American Recovery Reinvestment Act funding through a USDA Rural Development Business and Industry loan. The $3.2 million loan is guaranteed through the Miner County Bank in Howard, SD. The loan is just one of several sources of funding to build the complex in downtown Howard.
NDSU CENTER AWARDED $10.7 MILLION The North Dakota State University Center for Visual and Cognitive Neuroscience has received a five-year, $10.7 million competitive grant renewal from the National Center for Research Resources, a component of the National Institutes of Health. The grant will allow the university to enhance its research on how the brain processes visual information, how factors such as attention, individual differences, and emotions affect visual perception and cognition, and how memory and attention work. 10
October 2010
13 STRAIGHT YEARS FOR MINNESOTA COLLEGE RANKING The University of Minnesota, Crookston has been recognized as one of the top four public regional colleges in the Midwest in its category by the Best Colleges by U. S. News Media Group. It is the 13th consecutive year for the distinction, according to a university press release. The category consists of 319 public and private institutions that focus on undergraduate education and offer a range of degree programs but grant fewer than 50 percent of their degrees in the liberal arts.
ND STUDENTS AWARDED $37,000 IN SCHOLARSHIPS More than 50 North Dakota college-bound students will receive $37,000 in scholarships through the North Dakota Dollars for Scholars. The partnership between NDDFS and the Bank of North Dakota, along with Scheels Foundation, and many donations from businesses and individuals throughout the state, allows the North Dakota State Chapter to offer more scholarship to North Dakota students.
DIGI-KEY CORPORATION NAMED ‘DISTRIBUTOR OF YEAR’ Digi-Key Corporation has been named Distributor of the Year for active components for 2010 by readers of Elektronik magazine, based in Germany. It is the second straight year the company has received this recognition. Distributors were assessed based on product portfolio, product availability, delivery, technical expertise and support, and overall impression. Digi-Key Corporation serves a global customer base from its 600,000 square foot facility in Thief River Falls, MN.
YOUNG PROFESSIONALS NETWORK RECEIVES GRANT The Sioux Falls Area Chamber of Commerce recently received a grant from the Sioux Falls Area Community Foundation to be used for a special project entitled PlugIn Sioux Falls. The goal is to use social media and technology to raise a level of civic participation, create a conversational network that disseminates facts on civic issues, conduct opinion polls that will ascertain young professionals opinions, and increase the number of 18-40 year old registered voters.
AN OPEN LETTER TO CONGRESS
ON SUPPORTING THE ECONOMY & JOB GROWTH
BY STOPPING A TAX HIKE
ON DIVIDENDS We strongly urge Congress to take action to stop an impending tax hike on dividends. Today’s lower tax rates on dividends are good for the economy, consumers, American businesses, retirees and other investors. But unless Congress acts, this tax rate will surge at the end of the year—by as much as 164% on dividend income—discouraging job creation and investment in the recovering U.S. economy. We agree with Treasury Secretary Geithner, who recently said, “Our job now is about growth. Now, all the government can do is to make sure we’re providing a bridge to the recovery. It’s businesses that create jobs; governments don’t create jobs.” Raising taxes on dividends would starve U.S. companies of the investment capital required to help create much-needed American jobs. We believe that maintaining lower tax rates on dividends is sound public policy that fosters capital investment. Congress should stop a tax hike on dividends to encourage long-term investment in our nation’s economy and growth. You can help. Please visit www.defendmydividend.org and make your voice heard.
www.mdu.com
PRAIRIE NEWS
(Press releases and photos about business news and events in North Dakota, South Dakota and western Minnesota can be e-mailed to avanormer@prairiebizmag.com for consideration)
LOCAL MADISON COMPANY MOVING TO NEW HOME (SBS) Secure Banking Solutions will expand into a new location and facility in Madison, SD. SBS offers comprehensive information security consulting and products to community banks. Acting as a general contractor, SBS designs and builds security systems for the bank. The company will occupy half of a 7,000 square foot office building, allowing for continued growth over the next several years. Secure Banking Solutions will create up to 10 jobs and then an additional 30 positions over the next 2-4 years.
PROGRAM RECRUITS LEADERS FOR HEALTHCARE IN MINNESOTA The Minnesota Consortium for Advanced Rural Psychology Training, in partnership with Sanford Health, has actively recruited and prepared students for positions of healthcare leadership in rural communities for the past four years. The program reaches out to doctor-level psychology residents. All of the program’s graduates have assumed clinical and leadership roles in rural communities around Minnesota. These communities include Detroit Lakes and Thief River Falls.
APPAREO SYSTEMS AMONG 500 FASTEST GROWING COMPANIES Appareo Systems has been named to this year’s Inc. Magazine 500 list as one of the 500 fastest growing privately-held companies in the nation. Appareo is rated 159th with a three-year revenue growth rate of more than 1,700 percent and is the fastest growing engineering company on the list. Appareo is also the only North Dakota company to have made the list. Appareo Systems designs and manufactures electronic, mechanical and software products for aerospace, defense and transportation applications worldwide.
BEEF VERIFICATION PROGRAM ANNOUNCED Agriculture Commissioner Doug Goehring has announced a new, voluntary program to help market North Dakota beef domestically and abroad. The North Dakota State Legislature authorized the start of the program. Rather than build an entirely new program, the North Dakota Department of Agriculture opted for a five-year contract with an AgInfoLink. The federally-licensed, Coloradobased company has extensive experience with similar programs in other states.
BANK OF NORTH DAKOTA HAS POSITIVE RATING Standard & Poor’s Ratings Services recently provided Bank of North Dakota a Counterparty Credit Rating of A+/Stable/A-1, a rating that reflects the bank’s good capital and strong asset quality, according to Bank of North Dakota press release. The bank’s diverse loan portfolio and strong asset quality is better than those of its comparably rated peers, according to the release. Standard & Poor’s cites North Dakota’s steadily growing economy and the state’s low unemployment as further factors in the stable outlook.
A&B BUSINESS EXPANDS A&B Business, Inc. has acquired the assets of Office Equipment Company, Inc., in Aberdeen, SD. The company will add 15 new employees and also expand its line of equipment. The company sells office equipment, furniture, and supplies. A&B Business has 16 locations and services six states with a line of leading manufacturers. 12
October 2010
MINNESOTA SECONDARY SCHOOLS ADOPT SUSTAINABILITY PRACTICES A first-ever survey has documented a wide range of sustainability practices at the Minnesota State colleges and universities that include scheduling classes to increase energy efficiency, lowering water consumption, purchasing local foods, composting food waste, using nontoxic cleaning products, and reducing carbon emissions. The report establishes a baseline of sustainability accomplishments and projects. Plans call for the report to be updated annually. The system can make a significant impact by improving sustainability of campus buildings, which comprise about one-third of the state’s square footage. Sustainability experts say buildings typically account for 40 percent of energy use and 60 percent of global warming emissions. The other 10 areas that were assessed are energy, water, food, recycling and waste management, transportation, landscaping, culture, purchasing, carbon emissions, and academic programs and research.
INNOVATION EXPO ON OCT. 13 The 7th annual Innovation Expo will be held on Oct. 13 at the Ramkota Hotel and Conference Center in Sioux Falls, SD. The event is a combination Inventor’s Congress and Venture Capital Forum to celebrate inventors, entrepreneurs, and investors who grow new technologies and businesses in the region. There will also be an Exhibit Hall for entrepreneurs, service providers, and vendors, as well as educational sessions on various topics. The event features a keynote presentation entitled: ‘Reality or Hype? SD Universities inspire the innovation economy, tradeshow highlighting new inventions and businesses, and educational sessions and workshops.
GRANTS AWARDED TO IMPROVE ND AVIATION INFRASTRUCTURE The U.S. Department of Transportation (DOT) has awarded two federal grants to improve aviation infrastructure in North Dakota. Jamestown Regional Airport will use a $742,150 federal grant to expand its terminal building in order to provide adequate space for current passengers as well as bring the building into compliance with the Americans with Disabilities Act. The Park River Municipal Airport Authority will receive a $934,170 federal grant to rehabilitate critical infrastructure at Park River WD Skjerven Field. Reconstruction of the runway, taxiway and apron will extend the useful life of the facility.
PRAIRIE PEOPLE
(Please e-mail photos and press release announcements of hirings, promotions, awards and distinctions received by business leaders in North Dakota, South Dakota and western Minnesota to avanormer@prairiebizmag.com for consideration)
NEW LABOR COMMISSIONER NAMED
BANK PROMOTES MASTRUD
Tony Weiler has been selected by North Dakota Governor John Hoeven to lead the North Dakota Department of Labor. Weiler has been an attorney with the Maring Williams Law Office in Bismarck since 2002. His focus was personal injury, business, and corporate law. Prior to that, he served as a general practice attorney with the Wheeler Wolf Law Firm in Bismarck and worked as a labor standards inspector with the State Labor Department. Weiler replaces Lisa Fair McEvers, who was appointed by Hoeven in May to serve on the East Central Judicial District Court, chambered in Fargo.
Greg Mastrud was recently promoted to Fargo Market President for First International Bank and Trust. Mastrud has been part of the banking industry for 20 years, including the last seven with First International Bank and Trust. In his new role as Fargo Market President, he will be responsible for overseeing and managing the existing four local offices along with expected future growth.
STATE RETAILERS EXECUTIVE NAMED NATIONAL RETAIL COUNCIL CHAIR Shawn Lyons, executive director of the South Dakota Retailers Association, has been elected chair of the Council of State Retail Associations during its annual meeting earlier this year. The Council of State Retail Associations’ mission is to improve and advance the retail industry with the help of state retail associations around the nation. The Council acts as a forum for discussion of issues of concern on state legislation and regulations affecting the retail industry.
SCHABEL JOINS ENTERPRISE MINNESOTA BOARD OF DIRECTORS Tom Schabel, president and CEO of Alexandria Extrusion Company in Alexandria, MN, has joined the Enterprise Minnesota Board of Directors. Schabel also sits on the Board of Directors for the Aluminum Extruders Council, and the Board of Directors for the Minnesota Chamber of Commerce. Enterprise Minnesota works with small and medium size manufacturing companies to improve efficiencies, contain costs, and achieve growth in sales revenue and earnings. 14
October 2010
NELSON ELECTED TO ULTEIG BOARD OF DIRECTORS Associate Vice President Kevin Nelson has been elected to the Ulteig Board of Directors. He will serve a three-year term and help guide the company-wide decisions in the growing organization. Nelson is an associate vice president in Ulteig’s Bismarck office. He has more than 20 years of engineering experience, including the design and management of airport, municipal, and land development projects. He has specialized in nurturing the growth and development of Ulteig’s aviation practice throughout the Midwest.
WILLISTON NAMES DEAN FOR INSTRUCTION AND DISTANCE EDUCATION Dr. Pamela J. Gardner has been named as the founding Dean for Instruction and Distance Education at Williston State College in Williston, ND. Dr. Gardner played an integral role in the transition to new role assignments and Carnegie designations of two higher-education institutions in Utah. Under her leadership, enrollments exhibited significant growth providing additional opportunities for students to expand their career and educational choices, according to a WSC news release. She has written and acquired more than $10 million in grants and appropriations at her previous Utah University.
Discovering new worlds
When good ideas start spinning, other ideas often take flight. These ideas can change the landscape and our lives. Or both. At Sanford Health, we believe in ideas. That’s why we are building children’s clinics in underserved places. That’s why we are performing maternal fetal surgery. That’s why we are pursuing cures to Type I Diabetes and Batten Disease. Ideas like these could impact lives for generations. It’s why people around here see us as today’s pioneers.
This is Sanford Health. pioneers.sanfordhealth.org %&&$%%&&&$&""# %!#&
BYRON DORGAN
Q&A:
Sen. Dorgan continues research efforts By Alan Van Ormer orth Dakota Sen. Byron Dorgan has made it one of his goals to help the Red River Valley Research Corridor continue to prosper. In December 2002, Sen. Dorgan met with North Dakota college and university presidents to outline his vision of the research corridor. The decision was to focus on world class, cutting edge research, and build capacity in areas that would attract new industries and new jobs. Since 2002, more than $300 million of funding has been directed to North Dakota to build research centers, support the growing high-tech sector, build infrastructure and specialized facilities, and train skilled workers for emerging industries. In 2006, North Dakota State University researcher Dr. Larry Leistritz released an economic impact study showing the growth of the high-tech industry in North Dakota since 2002. According to his report, the initiative has generated $759 million in positive economic impact and added 10,600 jobs to the regional economy. In October 2008, Sen. Dorgan set a goal of doubling the Red River Valley Research Corridor job impact by 2015, which would bring the total number of jobs to 20,000. Also in June 2008, a Milken Institute study showed that the North Dakota research industry is the fastest growing in the nation. The Milken Institute is a nationally recognized, independent economic think tank. Before a luncheon in August honoring Sen. Dorgan, Prairie Business magazine sat down and talked to the Senator about the research corridor. The following are excerpts from the interview.
N
YOU RECENTLY ANNOUNCED NEW FUNDING FOR THE CORRIDOR. FIRST, HOW DO THESE NEW FUNDING PROJECTS FIT WITH THE CORRIDOR? The funding I have tried to do each year is designed to support the programs that are 16
October 2010
underway, new programs that have been created in recent years, but also additional programs and research programs that have the capability to provide commercial opportunities and therefore attract industry and jobs. I am not interested in having research be done just for the sake of research.
HOW WOULD NEW MONIES IMPACT WHAT IS ALREADY GOING ON? It just builds upon it. We are building centers of excellence in a range of areas and continuing to strengthen them. What we have done in a short period of time is very significant.
WHAT HAS BEEN THE MOST SATISFYING ACCOMPLISHMENT TO YOU? I have had many accomplishments over the years in the areas of helping family farmers, boosting energy production in North Dakota, strengthening schools and so much more. However, the accomplishment that I think will have lasting impact on the future of our state is one that started with an idea I had nearly nine years ago to create an energy research corridor in North Dakota. I predicted that the effort would both strengthen our universities and attract new industries and businesses to our region to colocate near the world-class research capability, which had already happened in a number of other areas across the country in a very successful way. During the past eight years, I have steered nearly $800 million dollars in research funding to help create the Red River Valley Research Corridor. We are now doing world-class research in the areas of micro technology, nano technology, energy, deep brain research, vaccine research, and much, much more. We have had companies move to North Dakota to be near that research and we have also now seen a good number of start-up
THE DORGAN FILE Name: Byron Dorgan Title: United States Senator U.S. Congress Age: 68 Hometown: Regent, N.D 18 years in the U. S. Senate (12 more as a member of the U.S. House) companies created in our state as a result of this research corridor. In fact, several national sources including Inc. Magazine and the National Science Foundation have identified the Red River Valley Research Corridor as one of the fastest growing areas of world-class research in the United States. I think my work to build the Red River Valley Research Corridor will have a lasting impact in our state by keeping our best and brightest students here in North Dakota where they can pursue career ladders and professional jobs doing the things we’ve previously exported them to do in other major population centers around the country. The Red River Valley Research Corridor will likely have a lasting impact in changing our economy for the better and I am proud to have created it and steered the funding for it to our state.
WHAT PART IN THE FUTURE WILL YOU PLAY IN THE RESEARCH CORRIDOR? Although, after 30 years not seeking reelection to Congress, I want to add another chapter in my life. I don’t expect to discontinue my interest in or my work for goals have established here in public service. I believe we have laid a strong foundation. There is much yet to build and I hope to be involved.
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Prairie Business
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COMPANY PROFILE - RAVEN INDUSTRIES
Change happening
By Alan Van Ormer n the cover of Raven Industries’ 2010 Annual Report a quote says “Even in a bad economy, you can find good opportunities.” And the leadership group at Raven has done just that by focusing the efforts of the corporation on the key niche markets they serve. Those markets are precision agriculture, persistent surveillance, and high value plastic films for barriers and protection. The new President and CEO Dan Rykhus says by doing this we have been able to return to growth in 2010 and are on a record pace for sales and profits this year. “Five years ago we started to emphasize our precision ag business highly. We were able to grow that more rapidly than the rest of our divisions,” he explains. “In doing so, it started changing our profile to be more oriented toward proprietary products that we designed and manufactured here and sell worldwide.” Raven Industries has been in Sioux Falls, SD since the mid 1950s. And during that period the company has been successful, but has not really promoted those successes, according to Rykhus, who took over the helm as only the company’s fourth President and CEO on August 20th, replacing Ronald Moquist. “It is humbling. This is a tremendously successful company with a strong history and it is humbling to consider that our board Dan Rykhus, President and CEO has selected me to move
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Cab shot of field computer EnvizioProTM. (Photos courtesy of Raven Industries)
us forward,” he says. “We don’t have to implement a turnaround program. We have an opportunity to keep transforming ourselves to be more organized around these specific niche market opportunities. Our challenges going forward will be in the areas of continued product and service innovation. Our competitive distinctions today and in the future are in the technology and value delivered through our products and services.” Rykhus says a major challenge is developing the team required to take advantage of these great opportunities. “We are not lacking talent,” he states. “We have to keep adding to what we already have and keep people focused on opportunities.” Rykhus feels that people deserve to know about the successes in this region and in addition, he hopes it will help with the challenges growing in attracting talent. “More and more of our employee base are engineers, marketing professionals, service professionals, managers, supervisors – all the professional staff,” he explains. “This building used to be almost all manufacturing, now it is almost all professional staff.” The change started 10 years ago when the previous CEO, Ron Moquist started implementing a strategy of pairing down businesses. “We really focused on the business units we felt had a niche that had a lot of upside potential,” Rykhus states. Now, there are 1,050 employees; with nearly 50 percent of those employees being professional staff. The main office is in Sioux Falls, but there are also branch offices located in Austin, TX and St. Louis, MO; manufacturing locations in Madison and Huron, SD; as well as sales and service employees in locations around the world. Challenges involved with competing on low cost in a global marketplace brought about change. The company decided to distinguish itself through product design, system design, the service around those products, and the distribution channels put in place, rather than trying to be the low cost producer. “We’ll never be the lowest cost producer. Low cost labor in Asia and other parts of the world will win that battle. We can’t compete solely on prices,” Rykhus explains. “We can do well domestically, but it isn’t only a (continued on page 20)
Prairie Business
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COMPANY PROFILE - RAVEN INDUSTRIES
(continued from page 18)
Dave Schwalm working on GPS field computer.
domestic challenge anymore. It is a global challenge. We believe very strongly that we have to be competitively differentiated based on our design, our quality, and our service we wrap around our products.” One business division the company is building its future on is the Applied Technology Division, which serves the precision agriculture market. This is a $100 million division that Rykhus states has tremendous upside. “It has over a 1 billion dollar current annual marketplace. We have our share to take. It is a growing market,” he states. “When you look at the challenge we face in this world, we have more than 6 billion people on the planet. The projections are for global population to grow to around 9.5 billion in the next 40 years. We don’t have lots of additional acres to grow food on and we are also losing acres to urbanization.” Rykhus states the challenge for the world is to grow more food off the same number of acres to feed a world population that is not only growing; but is increasing its dietary expectations. Precision ag products are helping the farmer by allowing them to optimize the fertilizers they put on the acres, to keep records of the cause and effect relationship between what input they choose to put on an acre; the seed, the fertilizer, the herbicide, the tillage practices, and then what the outcome is in that yield. “Our products help them optimize that combination of input costs and output.” Another business division the company is counting on is the Aerostar Division. This business serves the persistence surveillance market with a range of aerostats and other lighter than air products. According to Lon Stroschein, Division Vice President, in charge of Aerostar, this part of Raven holds the core business that the company was founded on in the mid-1950s. Two years ago Raven made a strategic decision to manufacture a 25,000 cubic foot aerostat that has a tetherline with fiber optic communications between the ground control station and the various cameras, sensors and other communication equipment suspended from the aerostat. “The Department of Defense is looking for something that provides protection for the forward operating bases in Afghanistan,” explains Stroschein, adding that DOD had been using helicopters. Persistence surveillance provides a lesser price tag, according to Stroschein. To date, Raven has delivered 14 systems to the Office of the Secretary of Defense for security operations in Afghanistan. A third strong division involves multi-layer barrier film. “Our Engineered Films Division is growing very fast again this year, serving the agriculture, energy exploration, construction, and geomembrane markets,” says Rykhus. “The way we are going to grow this division going forward is through expansion in the multi layered films markets. These high value films combine various layers of films with properties that provide protection from UV, Radon, Methane, Oxygen, and other gases.” Additional layers are used to provide the right thickness and texture for the application. It is estimated that only about 10 percent of the
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company’s capacity can produce those films used in various applications including landfill liners and covers. Raven has made an $8 million investment in capacity expansion over the next 12 months to triple capacity for the manufacture of these high value multi layer films. Raven Industries faces challenges and the challenges are different in each of the company’s different marketplaces. “When you look at precision ag, we are realizing great growth internationally,” says Rykhus. “But the international challenge is to customize the product and service to be appropriate and effective in the different international market places, as well as build distribution channels and partners in the international market.” Another challenge is attracting technical and engineering talent into the design effort for our precision ag product line. The company pulls heavily from South Dakota State University in Brookings, SD, and the South Dakota School of Mines and Technology in Rapid City, SD. “We work hard at recruiting,” explains Rykhus. “One of our longterm goals is to continue to refine ourselves such that we are the employer of choice for technical talent and professional staff that are interested in the kinds of jobs that we offer. I recognize it is a multiyear improvement effort that we are going through. Part of it is making our story known and continuing to provide challenging opportunities for our employees in an environment of trust and respect.” A part of Raven’s success throughout the years stems from being a
Aerostats are designed and manufactured in Sioux Falls.
conservative company and not carrying debt. “We have a very strong balance sheet that allows us to make an acquisition when we need to and to invest in our growth opportunities while returning a strong dividend yield to our shareholders” states Rykhus. “The challenge going forward is to continue to grow our revenues.” Raven’s investment in facilities and capital equipment will be around $15 million this year, compared to $3.3 million in 2009.The company is preparing for a similar level of investment in capital equipment and facilities in 2011. In addition, the research and development spending has increased by over 40% this year over 2009 and all of these investments are being focused on the great opportunities Raven sees in this difficult, general economy. Raven considers itself a growth company and the goal each year is 10 percent. “We are prepared for it. We are ready financially,” explains Rykhus. “There are opportunities in the region.”
BOTTOM LINE: Headquarters: Sioux Falls, SD Founded: 1956 Employees: 1,050 One the web: www.ravenind.com
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21
MaxBat — A winning formula WINNING TEAM
By Dee Goerge
O
ther than a baseball bat protruding from the building, the business MaxBat blends in without notice in Brooten, MN, a small farming community. Located two hours from the Twin Cities, storefront traffic is limited, but that is more than offset by Internet traffic and word-of-mouth advertising by satisfied minor and major league baseball players and amateur league managers. While the bats may not be as well known as the Louisville Slugger, MaxBat is the largest Internet retailer of bats direct from a manufacturer (Glacial Wood Products). On April 12, Jason Kubel hit the first homerun in the new Target Field with a sugar maple MaxBat. It’s just one of many firsts for a company that has achieved success with a winning combination of a good product, an excellent reputation and employees who pay attention to detail.
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Dick Johnson started Glacial Wood Products (GWP) in 1991 in Starbuck, MN, and the largest N.A. custom wood turning business for large cabinet manufacturers soon outgrew its location. An old school ag shop in Brooten met their needs so the business moved in 1996. The business was growing and planning to move to a larger facility when Jim Anderson approached them about manufacturing bats. “We liked his logo, and he seemed knowledgeable about marketing,” says Paul Johnson, Dick’s son, and MaxBat VP and production manager. Johnson also programs and works the CNC lathe to turn the bats. The family business had previous experience making bats and had been contemplating designing their own line. They moved GWP into a new facility, and MaxBat moved into the old building. “It’s been good,” Johnson says. “The bats have gained a little notoriety for Glacial Wood Products.” There’s new exposure for the GWP-made product every time a major league player’s photo is taken with a MaxBat bat. Among MaxBat fans are Doug Mientkiewicz, the first to use a MaxBat bat, Jimmy Rollins of the Philadelphia Phillies and Twins players including Joe Mauer and Kubel. Several articles have been written because of the bat’s story. Anderson, a Wahpeton, ND, native and Minnesota State University Moorhead design major enjoyed woodworking, and he made a bat to commemorate his son’s birth. After he lost his job as a traveling salesman after 9-11, he wanted a job closer to home. “I got the bug to make bats so I got a lathe,” Anderson says. He made a couple for himself, the first out of ash and the second out of maple. “At the time maple was new for a wood bat,” Anderson explains. “I know maple is a better wood. It’s got more pop and the bats last longer. It just felt better.” Other league players asked him to make bats for them, and Anderson decided to contact the MLB officials to see if his bat met regulations. He was surprised when he found out all he had to do was move the logo a quarter-inch. “I started looking for a partner,” he says. The name Glacial Wood Products came up
repeatedly in his quest. By 2003, the MaxBat (named after Anderson’s son, Max) was in serious production.
THE PROCESS Whether it becomes a bat for a summer league or a major league player, all MaxBat bats are made of the same quality wood, says Jason Speidel, in-house sales manager at MaxBat. Maple bats have been their mainstay, and the company purchases the best quality round billets of rock and sugar maple available, from New York and Pennsylvania as well as Canada. The shop is kept at 40 percent humidity to keep the wood in prime condition. “Bats are traditionally made of ash,” Speidel explains, “but the maple bat craze started with Barry Bonds when he used a maple bat.” Maple is denser than ash and more expensive. Maple MaxBat bats average $100. In addition to maple, MaxBat makes ash and birch bats. The process begins at high-tech Italian CNC lathes. Johnson or another lathe operator slips in the disk with the computerized information to cut out a specific model. The 2 ¾-inch- by 36-inch billets are loaded and the lathe peels out a bat starting at the handle. From there the bat moves to a hydraulic profile sander, which operates on pistons to ensure the same amount of pressure sands the bat evenly. Ends are sanded by hand. Weight is crucial, so each bat is weighed before cutting off the end to see if it needs more sanding. After the end is cut off, the bat is weighed again to determine how much to cup the end — up to 3/4 ounces — to get the correct final weight. Sanded bats move to the building next door where a worker hand paints them with translucent dyes. The bats are placed on a moving line, hit with a lacquer in a spray booth, cured in an infrared oven, sanded by hand, decaled, then sprayed and heated again. Bats go back to the workshop for computerized laser engraving and shipping.
MARKETING “The biggest challenge of manufacturing bats is finding an adequate material supply,” Johnson says. “It’s market driven, and we’re competing against the veneer market for the maple.” He or other managers fly out East a couple of times a year to maintain contact with suppliers. They travel to sporting good and
trade shows and take their bats to major league spring training in Arizona and Florida. Recently MaxBat has been promoting less expensive ash and birch bats to grow other markets such as minor league teams. Just over 20 percent of the bats go to the professional players market in the U.S. and Mexico. The rest of the bats are sold to amateur players worldwide from Italy to Japan. MaxBat expects to sell about 30,000 bats this year. “A lot of people can make a bat, but we can get a lot of them quicker,” Johnson says. “And we offer far more models. We have way over 300 models.” Besides a professional website, MaxBat has a showroom with a variety of their products for clients who fly in from major league teams. It’s also handy for local amateur teams — there are more than 300 men’s teams in Minnesota. We’ve tried everything including Louisville Sluggers and we like the pop out of MaxBat, the way the ball comes off the bat,” says Kevin Hoy, general manager for the Minnetonka Millers, which have won nine state championships since 1997 in the Minnesota State Class A Amateur League. The team goes through 40-60 bats a summer in 60 games, and Hoy says MaxBat offers good service and fast turnaround time. The maple bats are competitively priced with other companies. “If we weren’t pleased with them, we wouldn’t keep buying from them,” Hoy says. Goerge is a Parkers Prairie, MN-based freelance writer. She can be reached at dee_goerge@yahoo.com.
Prairie Business
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EmPower ND 14-member Group Helps to Shape North Dakota Energy By Jesse Bradley eaders from nearly every major energy company in North Dakota meet regularly to share insights and ideas. They have one common goal: to be creative thinkers for North Dakota energy. In 2007, the Legislature created and Gov. John Hoeven appointed the EmPower North Dakota Commission to make recommendations to enhance the state’s existing comprehensive energy plan, also known as EmPower ND. The group is composed of a 14-member commission which includes representatives from all of the state’s energy sectors. “The beauty of what we do at EmPower is to bring individuals from traditional and renewable energy together all at the same table,” Randy Schneider, chairman of the North Dakota Ethanol Producers Association and one of the EmPower members, says. “Our goal is simple. We need to create a very cohesive and synchronized energy development plan for the state of North Dakota based on sound science and economics.” Partnerships between traditional energy industries and the emerging renewable industries are a central component of North Dakota’s approach to energy development. This strategy recognizes that meeting our state’s and country’s energy needs requires all players in the energy industry to be engaged in the process together. “Historically, each energy sector would show up at the Capitol with their legislative agenda every other January and often times conflict would occur, resulting in less than perfect legislation for everyone,” Ron Ness, president of the North Dakota Petroleum Council and a member on the commission, explains. “Now, these groups are at the same table on a regular basis, learning and questioning each other on best practices and how to work together to deliver better results for North Dakota.”
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“One thing we have all learned from the EmPower process is that 90 percent of our issues are the same. We all need better infrastructure, workers, positive business climate, and other resources,” Ness adds. The commission conducted work on its first EmPower ND policy prior to the 2009 Legislative session. This provided the framework for policy changes and initiatives that have helped spur growth throughout the state’s energy sector. “Almost their entire first set of proposals and goals were met with success in the Legislature, with bills being passed that were supported by and endorsed by EmPower,” Todd Porter, a state representative from Mandan, says. “Prior to EmPower they all fought to gain their own ground. Now they approach us on a unified plan that has already met the muster of the industry leaders. It takes all the fight out of the process and puts energy development as the goal, not a specific industry.” “It’s really about educating each other and then working together to find solutions and produce results,” Ness adds. “This is a unique approach that could be used for many industries to find solutions by bringing together the various industry segments that have more in common than they realize. As a result of the process, we are all developing a much better understanding of the core issues that each industry needs in order to be profitable and attract the necessary capital for continued growth.” Ness explains the EmPower members have found common ground on nearly every issue as a result of the education process. Commerce Commissioner Shane Goettle, who chairs the group, agrees. “The entire process has helped everyone work together,” Goettle states. “We have taken an in-depth look at the strengths, weaknesses and opportunities in a number of key sectors and developed policies to overcome obstacles,
eliminate barriers and encourage growth. EmPower members have fully embraced this approach. These are busy business leaders with demanding schedules, yet they have made this a priority and that’s ultimately why it works. “ “Everyone who used to have a specific agenda realizes that going alone or against the EmPower Commission will be unsuccessful,” Porter says. “This has forced everyone to pitch their idea prior to a legislative hearing and gain support from competitive energy industries prior to a legislative bill draft and hearing. This model has proven its success and should be the showcase of how an industry with many facets can be brought together to produce policies that fit a statewide plan.” Because of this approach, energy projects resulting in significant investments in all sectors of the energy industry are underway across the state. From 2006 to 2010, natural gas processing companies have more than doubled their ability to turn North Dakota’s valuable natural gas resources into a safe and clean energy source for America. As of May 2010, North Dakota had five ethanol plants with a rated capacity of 350 million gallons of ethanol per year. Wind production capacity is greater than 1,200 megawatts, with another 6,000 megawatts in planning. Thirteen natural gas processing plants are operating in western North Dakota, located near Arnegard, Ambrose, Killdeer, Knudson, Lignite, Marmarth, Midway, New Town, Ray, Rhame, Stanley, Tioga, and Trotters. In May 2010, oil production hit an all-time record high of nearly 291,000 barrels per day.
At the same time there were 4,905 producing wells, another all-time record. The group’s success has not gone unnoticed. The concept for the North Dakota Ethanol Council grew out of the EmPower North Dakota Commission. The North Dakota Ethanol Council includes representatives from all of the state’s major ethanol producers, including ADM Corn Processing, Walhalla; Blue Flint Ethanol, Underwood; Hankinson Renewable Energy, Hankinson; Red Trail Energy, LLC, Richardton; and Tharaldson Ethanol, Casselton. EmPower ND Commission members think people outside of North Dakota should also take notice. “The nation really needs to look, learn and listen to what we have done in North Dakota,” Schneider explains. “Why we can’t do this on a national level, when the nation needs a national energy policy, is beyond me. We have proven that it can be done. North Dakota is a perfect model for what the folks in Washington D.C. should be doing.”
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Bradley is a Bismarck-based freelance writer. He can be reached at jb@jessebradley.com.
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25
COVER STORY -
By Alan Van Ormer
$ports are a gold mine ports fans are passionate. They are excitable. They live and die with every play of their favorite sports team. “I don’t think that sports are going away, interest-wise or economically, they’re just changing,” says Dave Rolling, Assistant Professor of Sport and Recreation Management in the Department of Business at the University of Minnesota, Crookston. Rolling is also involved in consulting for bid proposals, event management, and contracts. “Different sports industries (recreational, health and fitness, professional) are all thriving financially. Sports products are both tangible and intangible, and their complexity adds to the mystique and demand which we witness today.” Regionally, the business of sports is creating a different culture. Midcontinent Communications feels that there is enough there to launch Midco Sports Network to more than 230,000 subscribers. JLG Architects has had a hand in building several new sports facilities in the region. And Insight Marketing was involved in the launching of a new name for what was then the Sioux Falls Canaries and has now become the Sioux Falls Fighting Pheasants. “The interest is there,” says Sherry Barkley, Assistant Professor and Department Chair of the Health, Physical Education, and Recreation Department at Augustana College in Sioux Falls, SD.
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(continued on page 28)
Dave Rolling, Assistant Professor, Sport and Recreation Management, Department of Business, University of Minnesota, Crookston
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October 2010
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“Sports are so big. It is entertainment. It is participation. It is a huge part of our culture. It is just there. It has become so much of what people do.” Rolling adds that businesses are devoting an entire personnel division to studying sports consumers and incorporating a sports relationship into its strategic management. “These companies with no official relationship with a particular sports property can still adjust their marketing mixes to effectively reach their target markets through sports,” he says.
MIDCO SPORTS NETWORK REACHING THREE STATES Midco Sports Network is a new all-local sports TV network that will cover sporting events of colleges, universities, and high schools in Minnesota, North Dakota, and South Dakota. The new network will deliver local content focused on sporting events that are not typically televised in both standard and high-definition. “I don’t know if it is ground-breaking or earth-shaking, but it is an idea that has never been tried and supported at this level in this area,” says Tom Nieman, Programming Manager and play-by-play announcer for live events. “Midcontinent’s ownership saw a way, to not only set the company apart from the competition, but add a service and fill a void in the region. Sports are a big part of a lot of people’s lives and Midco’s leaders recognized that this endeavor could be valuable to the customers and the company.” The impact the network will have will not be known at this point, but Nieman believes Midco Sports Network can have a positive influence in different areas. “Colleges can show themselves off to prospective students. A local golf show can not only bring new players into the fold but can be an economic and PR spark for the company producing the show and the sponsors that support it,” explains Nieman. “Smaller, local entities like the high schools or junior football or youth soccer could gain a boost in support when advertisers realize that there are a lot of eyes on the little guys and not just on the pros.”
BEMIDJI LOVES ITS HOCKEY Enthusiastic hockey fans are abound in Bemidji, MN, especially after the school went Division I and also are set to open a new arena this season. You cannot get a single game ticket to the season opener against the University of North Dakota unless you purchase season tickets to the new $65 million, hockey arena. In addition, there are 25 suites in the facility and all 25 are sold out for five years. If that isn’t enough, the Beavers end the hockey season against the University of Minnesota. UND and the University of Minnesota are big opponents for Bemidji State. 'The economy of sports is huge for Bemidji,” states Dr. Rick Goeb, Director of Athletics for the school that has 5,000 students. “Selling out 25 suites in the building for a five year commitment shows the interest and the excitement this community has for hockey.” Now that the hockey team has moved into a new facility, the old facility is being renovated to benefit all of the sports programs on campus. Bemidji State University has 400 student-athletes participating in 15 Division II sports associated with the Northern Sun Collegiate Conference and two Division I sports associated with the Western Collegiate Hockey Association. Many consider the WCHA the most competitive league in hockey. Women’s hockey has played Division I hockey for 10 years. The men’s program is skating into its inaugural season in Division I. “Sports provide entertainment value,”
(Photo courtesy of Insight Marketing Design)
says Goeb, adding that the university, along with the local hospital, are the largest employers in Bemidji. “The value is appreciated by the community, the students, and those that come in from surrounding areas to see the games and participate in activities.”
HELPING REBRAND A BASEBALL TEAM Insight Marketing Design was involved in the launching of the Sioux Falls Fighting Pheasants including the new logo and uniforms. It also included coming up with a new mascot ‘Ringer.’ The new brand was launched on Feb. 17. Candy Van Dam, Client Service Director and Partner at Insight Marketing Design in Sioux Falls, says branding is important for any type of business. “For a sports franchise, it is the hook, the personality that is going to build their connection with the fan base,” she states. “They are devoted fans.” Insight Marketing Design does not have a history of branding for sports franchises, but Van Dam states the company has worked with many companies in rebranding them and used that experience to help with the Fighting Pheasants branding. “Branding helps develop that fan base that keeps those fans buying season tickets, following their team in a newspaper, on TV, on Twitter, on Face book, as well as going to the games,” Van Dam explains. “Sports marketing is a business. If done well it is a profitable business. Branding is the most important component in launching a new entity.”
(Photo courtesy of Insight Marketing Design)
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(continued on page 30)
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As well as professional branding, high school and college branding also creates a fan base and fan loyalty. “People like to be part of something,” Van Dam says. “And that is part of the sports marketing aura, it creates something you can be part of.” Sports itself is a big business. In Sioux Falls, along with the Fighting Pheasants baseball team, there is the Stampede hockey team, Storm football team, and the Skyforce basketball team, as well as several college and high school squads. “People are loyal to their brand,” Van Dam says. “Sports teams are something that people follow so closely.” Because the business of sports is so huge, last year, Augustana College implemented a sports administration and leadership program as a master’s program to go along with its sports monument undergraduate classes. Barkley says that there are just so many aspects about sports and sports management that the college needed to pursue other programs. “We think we have developed a program that is flexible,” says Barkley. The Masters program will prepare individuals for leadership roles in sports-related professions.
FACILITIES ALSO PLAY A LARGE PART IN THE ECONOMY OF SPORTS In the last 10 years, JLG Architects has seen and been involved with designing a fairly large number of sports facilities in the Dakotas and Minnesota, says Randy Lieberg, AIA, JLG Architects. “Traditionally, the Dakotas have been home to more community and youth-based athletics. You will see an occasional larger facility for collegiate activities, but the majority have been high school gymnasiums, community hockey rinks, and some outdoor football stadiums,” he explains. “The trends toward a healthy lifestyle, however, have driven larger scale fitness centers in both the community and higher education areas, and even into the high schools. Colleges are seeing the importance of revenue generation from sporting events, which helps justify and fund much larger facilities with all of the amenities for fans and athletes.” The economics of facilities are huge. “Owners and operators are understanding the idea of cash flow and revenue generation and getting much more sophisticated when researching options and studying different scenarios,” Lieberg says. “Existing buildings are expanding and adding premium seating, team stores, club areas which bring in more revenue. It never used to be that way. Now facility managers are taking cues from professional-level operations and incorporating those revenue sources all the way down to park board level buildings.” Sports-specific buildings are becoming more common. However, Lieberg states that JLG is finding that many owners are depending on multiple uses to keep these large arenas running all year round. “We are asked to design the ability for hockey one night, basketball the next, a concert over the weekend, and a week-long trade show after that,” he 30
October 2010
Fans enjoy a football game in the FargoDome. (Photo Courtesy of FargoDome)
explains. “Operators are much savvier in terms of change-over costs and the best way to use the buildings on non-sports days. It is no longer a matter of a “build it and they will come” mentality.” Anything that can draw revenue will be huge in the future, according to Lieberg. This could include special club areas, advertising space, and sponsored spaces within the stadium. “Also, there is maximizing efficiency and turnover for multiple events,” he adds. “There is a race for the biggest and best in video screen and scoreboard technology as well. Texas Stadium is the most visible example of that. Specialized conversion techniques, such as sports floors moving and storing, seating sections with the ability to change configuration, big ticket items that change the space in big ways are probably one thing.” In Fargo, the FargoDome is just the type of facility that hosts much more than sporting events. However, when it comes to sporting events and especially North Dakota State University football, the FargoDome can hold nearly 19,000 folks. In addition, the venue hosts up to three state high school tournaments that could include football, wrestling and basketball, as well as USA wrestling during the summer and Minnesota and North Dakota High School football games and playoffs during the winter months. Rob Sobolik, general manager for the FargoDome, says that a study conducted a few years ago and if adjusted for the 2010 season, one Bison football game would provide approximately $72 per person in total economic impact. If 15,000 people attend a Bison game, this would mean close to $1 million of revenue generated from that one football contest. For all events at the FargoDome, Sobolik estimates there is a $25 million to $30 million annual economic impact. He also suggests that as little as one third or as much as two-thirds could be attributed to sporting events. “Sports have a built in audience. With Bison football or other sporting teams who have a loyal fan base, they are going to every home game,” Sobolik explains. “As the team does better, you have people that want to be involved.” Sobolik says the FargoDome itself is important to the community. Without it there would not be the 19,000 capacity for a Bison football game. Without it, there may not be the state football championships, which would be spread out around the state. Without it, USA wrestling wouldn’t have a venue. Without it, Minnesota sectional and other football games would not be played in Fargo. The more people in the FargoDome, the better for the FargoMoorhead area, says Sobolik. Surveys estimate that 48-55 percent of people in attendance are from out of town. “That has an economic impact on the Fargo-Moorhead region,” Sobolik says. “For sporting events you don’t have to work as hard to get the amount of people you need as you do for other events. At times sports sells itself.” (continued on page 32)
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CHANGE WILL CONTINUE INTO THE FUTURE Rolling thinks that there will be leagues searching for new revenue streams with high net yields, meaning corporate sponsors’ logos, names, or both appearing on professional league uniforms. “The NCAA might then consider a similar relationship that could help schools meet Title IX requirements without cutting sports,” he explains. “At the high school level, it could mean the elimination of pay-for-play requirements and provide a source of funds that could be used to further enhance educational programs and opportunities.” Another change could involve cell phones and PDAs. Rolling says there are interesting plans in the works in which they will become the credit cards and ticket accepted at sport venues. “Cash and tickets for
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National Hockey and Event center in St. Cloud, MN. (Photo courtesy of JLG Architects)
food and beverage will be transferred electronically to our business clients, family, and friends,” he adds. “Phones can be swiped at the entry gates, and merchandise offers can be accepted with a click, with prompt delivery to the seats.” Rolling concludes that obviously, there are people and organizations that have created an abundance of wealth from sports. “From purely a regional or local perspective, sports events will generally inflict economic costs on the host community and region as well as deliver economic benefits,” he states. “I think that as free time continues to progressively dominate total activity, the dollars from various sports industries will also increase.”
COMMUNITY PROFILE - WILLMAR, MN
Regional hub in central Minnesota
By Alan Van Ormer
A view of Willmar, MN. (All photos courtesy of Willmar Lakes Area Convention & Visitors Bureau.)
illmar Lakes Area Chamber of Commerce President Ken Warner likes to use the word ‘cooppetition’, which is not actually a word, when talking to groups about his community. “I see a lot of competition cooperating with each other,” Warner explains. “They work together to help better the community.” Willmar, with a population of 18,000 people, is considered a regional hub in central Minnesota. It is far enough away from major population centers like Minneapolis or St. Cloud, MN, or even Sioux Falls, SD, so that it has its own economy. “Our economy is not affected dramatically by other people’s economy,” says Steve Renquist, Executive Director, Kandiyohi County and City of Willmar Economic Development Commission. “We have 18,000 jobs with 10,000 adults. It gives you an idea of what a job magnet we are.” Being a regional hub, Willmar is able to reach out to an estimated 200,000 people. Within a two-hour drive there are 3 million people, and the goal is to get those people under the community’s radar. Last year, Willmar had $500 million in retail sales and in Kandiyohi County, there was 2 billion inMonth retail sales. Chief Kandiyohi 34 0000There is 34 Month 0000
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also a diverse culture as is evident by 40 new businesses being created by minority owners. The community has a 200 acre city-owned industrial park with infrastructure in place, as well as rail industrial sites. The ag industry includes turkey hatching, turkey and feed processing, agricultural equipment and supplies manufacturing. Other major industries are steel fabrication, transportation, component and plastics manufacturing, printing, cookies and nuts, concrete products, bottled water, as well as automotive, electrical, steel, and industrial supply distributors.
HUB OF ECONOMY STILL AGRICULTURE Renquist says that agriculture will always be the core strength, and you can never get away from it, but there is much more than just (continued on page 36) agriculture in the area.
Ken Warner, President, Willmar Lakes Area Chamber of Commerce
Steve Renquist, Executive Director, Kandiyohi County and City of Willmar Economic Development Commission
(continued from page 34)
The first tier of economic drivers includes agriculture and agriculture services, as well as a booming healthcare and technology industry. Just below those three stable economic strengths are tourism, manufacturing, regional government services, and distribution centers. Community leaders say that the community has grown culturally and there are more opportunities for those who live within Willmar and in the county. “Willmar offers a complete package,” Renquist states. “There is high quality education, arts community, and museum. Willmar has been solid in creating jobs, has a high quality of life, and is a great place to live. There is no reason it won’t continue.” Agriculture continues to lead the way with the help of technology. Willmar boasts one of the largest turkey processing companies in the nation. Because of that distinction, the community took an old mental facility and developed a 114-acre technology campus that houses 19 companies and has more than 260 employees. The MinnWest Technology Campus has the capability to house up to 50 companies and as many as 800 employees. Life-Science Innovations is the executive and administrative parent for companies whose focus is in innovation in the life sciences and engineering. Some of the notable technology companies in the complex are Epitopix, Nova-Tech Engineering, Syntiron, and Willmar Poultry Company dba Ag Forte. “When any technology company comes out this far they say we can’t survive out here because there are not enough employees of similar technology,” states Scott Norling, Vice President Administration, LifeScience Innovations. “It is always a big risk for them to move out here. The cluster idea is to keep like technology companies in a given area that can feed off each other and share ideas.” Epitopix is a company that started from the turkey business as the laboratory division of Willmar Poultry Company. The company has two USDA licensed vaccines for cattle and has a dozen in various stages to handle salmonella and other diseases in poultry and cattle, as well as E. coli 0157 in cattle. It has grown to 50 employees; 35 work in manufacturing and 15 are involved in research and development. This year, Epitopix started a marketing partnership with Pfizer, a worldwide marketer of cattle vaccines. “Locally our impact on the ag community is through what we do Scott Norling, Vice President for our parent turkey company,” says Administration, Life-Science Innovations
Ridgewater Community College
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Rice Community Hospital
Jim Sandstrom, General Manager, Epitopix. ”Our Epitopix impact on the cattle industry is national in scope. The local Willmar ag economy has floated our business through the startup phase.” MinnWest Technology Campus Sandstrom says there are 10 vaccines in product development currently. “Our manufacturing facility will produce enough capacity for another 3-4 years and then will need to move to another facility,” he states. “We intend to continue growing and working together with Pfizer, blending our vaccines in with their vaccines and making vaccine combinations. That will give them competitive advantage against the other animal health companies. They would like to bring our vaccine technology to the international market also.”
HEALTHCARE IMPORTANT PART OF COMMUNITY The community is seeing people retiring and moving to the area because of the medical services that are offered. The community boasts the largest municipal hospital, as well as two local medical centers. There are more than 100 physicians and other medical facilities that are a huge draw to the community. Terry Tone, Administrator, Affiliated Community Medical Center, says almost 22 percent of services are provided to people of diverse cultures. “We are very cognizant of the fact that we have to be prepared to meet those challenges,” says Tone, adding that it has been a growth for the company. “We have a lot of support personnel that deal with health issues unique to minority populations.” Affiliated Community Medical Center is a multi-specialty clinic that covers 11 counties. In some of the counties they are the only providers of healthcare. There are 1,000 employees and 160 providers. It is the largest physician-owned clinic in the state. The Southern Minnesota Area Health Education Center is designed to help rural communities and underserved areas growth their health services. The company has equipment to help with training and assimilation in communities, as well as for specific programs such as child obesity and dental assistance. According to Steven Moburg, Interim Director, Southern Minnesota AHEC, a quarter of the patients are underinsured or need assistance. The main program is what we call pipeline development – from 8th grade on try to encourage them into healthcare careers. “If we can get some people from the rural areas they have a greater tendency to return to the rural areas,” he says. The health education center works with doctors, nurse practitioners, (continued on page 38)
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pharmacists, lab technicians, and other healthcare careers. They touch as many as 1,000 people during a course of a year. We are finding they are more likely to come back to a profession,” Moburg states. “Healthcare is one of the major factors in any community economic development. It helps to be able to maintain that in a community such as Willmar is extremely important because the future of the whole community is based on access to healthcare and to get it when they need it.”
OTHER ECONOMIC DRIVERS ASSIST GROWTH Right behind the top three tiers of economic development are several others that help the community grow. Beth Fischer, Executive Director, Willmar Lakes Area Convention and Visitors Bureau, says tourism is important to the area. Within our county we have over 100 lakes. There are 30 recreational lakes, 41 city, county and state parks with beaches, boat landings, camping, hiking, biking, horseback riding, snowmobiling, and cross country skiing trails. In addition, there are three 18-hole golf courses, and two 9-hole golf courses, as well as baseball and softball diamonds, soccer fields, tennis courts, indoor shooting range, and archery range. In addition, government services have a big presence in the community. In the 1980s the city of Willmar used extra revenues from a series of general obligation bonds to set up a community investment fund. The fund has reached $9 million and the interest earnings are used to spur more improvements. The money is being used to help develop and expand the industrial park, build a $22 million airport improvement project, $86 million wastewater treatment project, $52 million Rice Memorial Hospital expansion, and $30 million on improvements in the technology park. “We have been able to maintain major industries and businesses leaving the community or getting out because of the economy,” says Michael Schmit, Willmar City Administrator. “We have been able to hold our own in this economy.” Schmit adds that local governments are struggling and always have to cut budgets and services. “Willmar is in a Beth Fischer, Executive Director, Willmar Lakes fairly strong, financial Area Convention and Visitors Bureau
Willmar offers a variety of outdoor activities.
position. Willmar historically has seen very modest growth. It has been a slow, steady growth,” he explains. “I don’t’ think we have ever taken on projects that over extended our resources and our ability to pay. It probably is the result of strong, conservative fiscal management policy.” Ridgewater College helps bolster the education in the Willmar region. The comprehensive community and technical college have campuses in Willmar and Hutchinson, MN. The college serves more than 5,800 individuals each year and offers more than 100 programs. In addition, Customized Training and Continuing Education is the business and workforce training arm of the college. It served nearly 16,000 individuals last year, providing over 101,000 hours of training. The college employs around 400 people, including faculty, support staff, and administrators. Sam Bowen, Director of Communications and Marketing, believes it is a safe assumption that the college has a major economic impact in the community. “Simply looking at the number of students attending classes at our campuses – whether commuting or moving to town – there is an incredible amount of money that changes hands (rent, food, fuel, entertainment, etc,” he explains. “Another incredible statistic is the number of alumni who live and work in the region. The vast majority of alumni in the College Foundation’s database lives and works in the seven county region around Kandiyohi County.”
STILL CHALLENGES TO FACE Education issue, cultural issue, bilingual issues, and mainstreaming issues, as well as finding physicians wanting to work in rural parts of Minnesota, transportation issues, and finding funding for rural communities are all challenges. Renquist says that the community is fortunate that with the agriculture entity intact we don’t see the highs in the hot times of the economy nor the lows in cold times. “We don’t see expansions that we like to have, but one of the things we have found is that the real strong companies don’t turn anybody away,” he says. “They recognize that in a time like this there are opportunities. They can get high quality help.” 38
October 2010
Bountiful harvest expected By Alan Van Ormer f the weather cooperates and everything else works out well, farmers in the region could see a very good crop. Not only will farmers see money in their pockets from a good harvest, but rural areas will also see more spending in their communities. Tom Lilja, Executive Director of the North Dakota Corngrowers Association, believes this year’s harvest “will be a record gang-buster.” The previous record was 129 bushels per acre of corn in 2007. Statewide projections show that it could be 140 bushels per acre this year. “Anytime you increase a statewide average by five bushels, it is very big,” he states. “We’re increasing it by over 10. We really have a phenomenal crop that is sitting to be harvested.” North Dakota Ag Commissioner Douglas Goehring, says agriculture is still the number one economic driver in the state; its 25 percent share of the state’s economy is twice as large as the energy sector. Even more importantly, rural communities are going to reap rewards of a bountiful harvest, Goehring explains. “There are a couple of things helping right now,” he adds. “Russia and Mongolia are not having a great crop this year because of severe drought. That changes the dynamics of the world market and people are coming to the United States to buy wheat, which pushed the wheat prices up to a scenario that is getting above the cost of production. That is encouraging to producers.” Goehring also says that with the price being up there is a skip in a farmer’s walk. “You see a glow about harvesting a big crop and knowing there is some value there,” he says. “You can see it in their spending habits in town.”
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There was a good crop last year, but prices were in decline, states Goehring. “In some cases, the producers said they couldn’t meet the costs of operating,” he explains. “This year there is some hope. Solid row crops are pretty good and prices aren’t so bad.” Just to the east, Douglas Hartwig, Director, USDA, NASS, Minnesota Field Office, says that based on Aug. 1 conditions, Minnesota’s corn production is forecasted at just over 1.2 million bushels, which is slightly above the 2009 production. The yield forecast of 178 bushels per acre is up four bushels from 2009. Other crops are also expected to increase in Minnesota. Soybean production is forecast at 326 million bushels, which is up 14 percent from last year’s production, spring wheat is estimated at 90.8 million bushels, up 10 percent, and the sugar beet crop is estimated at 11.5 million tons, which is up eight percent. North Dakota is the number one producer of 14 different commodities including spring wheat, barley, canola, sunflowers and durum. It is number two in potato and sugar beets.
Corn and soybeans are increasingly important. Lilja states that what is happening in the past 15 years in the farming industry is a textbook example of supply side economics. “As you increase the supply, the economics trickle down from the farmer to the trucker to the elevator manager or ethanol plant to the railroad,” he explains. “All that money goes into the local economy. It is very difficult to put a number on it. If you take 2 million acres and add another 50 million bushels, take corn market increasing 1.50 on average the last four to five years, you are looking at a minimum of $150 million before a multiplier effect.” Goehring agrees that communities and businesses could be looking at a bumper year themselves. “I think I can safely say it is going to be a good year for our rural communities because there will be money moving through the economy,” he says. “Every $1 made generates 3 ½ times. That stimulates your rural communities.”
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Water, energy work together By Alan Van Ormer nergy projects cannot occur without water. “Coal mining and the utility industry in this state (North Dakota) is largely here because of Lake Sakakawea,” explains Dr. Gerald Groenewold, Director, Energy & Environmental Research Center. “You need a fair amount of water to cool a coal-fired power plant. You can air-cool a coal-fired power plant, but you pay a significant penalty in efficiency.” Garland Erbele, Chief Engineer, Water Rights Program in South Dakota, says the biggest impact he sees concerning water and energy are coal-fired plants and the ethanol industry. In South Dakota, Erbele says the demand for energy is continuing to go up. “The energy industry has plateaud at the moment,” he explains. “However, as our population grows and the demand for energy increases, the development of renewable fuels in the states will continue to grow. “Water is an important part of the power generation process,” he adds. “On a different level, particularly in the southwestern states, like California, the amount of energy that is consumed moving water is tremendous. There is a huge connection between energy and water. We see it to a lesser extent in South Dakota. Our biggest mover of water is rural water systems. They are especially important to our ethanol industry because they provide the water needs to approximately one half of our ethanol plants.” As chief engineer, Erbele’s primary function is to manage the beneficial use of water for the state of South Dakota. “Any energy project that is going to use water has to obtain a water right,” he states. With the booming oil needs in western North Dakota, there is a major need for water not only to help with fracking in the Bakkens, but also for people that are moving in. Jobs are being created and infrastructure needs the water supply. (continued on page 42)
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“The biggest problem right now is finding water for drilling and hydro-fracking oil wells,” states Todd Sando, State Engineer for the North Dakota State Water Commission. “Large quantities of water are needed particularly for the hydro-fracking process. Other than the Missouri River and Lake Sakakawea, water sources in western North Dakota are limited.” There are seven coal-fired plants that all rely on the Missouri River to cool their plants. “Except for wind energy, water is required for other sectors of energy development in North Dakota,” Sando says. Sando explains that the best resource is Lake Sakakawea. However, there are impediments dealing with the federal government, he explains. “Ground water is such a precious resource,” he adds. “It is pretty close to fully allocated in a lot of areas. It is just not a good option to use our limited groundwater for oil field development when we have such a vast and reliable source of water from Lake Sakakawea.” Sando lays out the following facts. The state is looking at about 1,800 new wells a year. Each well needs up to about four or five million gallons of water or about 22,000 acre feet of water per year. Sando said the state of North Dakota is meeting with the Corps of Engineers to get temporary authorization to use water from existing
Oahe Dam. (Photo courtesy of Basin Electric Power Cooperative)
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irrigation permits for industrial (oil field) use. Mark Lindquist, who works with the Minnesota DNR, addressing policy issues where energy and natural resource management intersect, says that generally speaking, energy and water are very closely interconnected. “Energy is a water intensive industry, and water is an energy intensive industry,” he says. “As a heavy and bulky commodity, producing, transporting, and treating water uses considerable amounts of energy, usually electric power. Water treatment, as you know, occurs prior to and after many uses. Filter plants and waste water treatment plants are significant electric power consumers.” In Minnesota, one oil refinery is permitted to use 2.5 billion gallons of water per year. A large ethanol plant may use 0.3-0.4 billion gallons per year, according to Lindquist. In addition, Lindquist states generally speaking, energy facilities also require significant amounts of water. “The water demand associated with ethanol production has garnered significant attention in recent years,” Todd Sando, State Engineer, he adds. “Ethanol plants North Dakota State Water Commission
Leland Olds Station. (Photo courtesy of Basin Electric Power Cooperative)
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use perhaps 3-5 gallons of water to produce a gallon of ethanol fuel.” The Minnesota DNR is responsible for the appropriation of water, the management of water flows within the state, and the regulation of construction in or alterations of public waters. DNR also sees regulation of certain water related land uses. “In this context, DNR is very interested in seeing that water is used efficiently to maximize the benefits of use and that water intensive industries are sited in places that can sustain the demand for water,” Lindquist explains. “We are also responsible to minimize the ecological impacts of water use.” To put it all into perspective, the Water Management Center at the EERC, says the electrical industry accounts for almost 40 percent of all freshwater withdrawals in the nation. Almost 90 percent is used in fossil and nuclear-based electricity generation. Over the next 20 years, electrical demand is anticipated to increase by 50 percent. Most demand is expected to be for coal and nuclear electricity generation, increasing water needs by 45 percent. The EERC is working with major oil companies to develop alternatives to Lake Sakakawea. One possibility is using deep ground water. “This is not something used for human consumption, because it is too salty,” Groenewold explains. “That is a good back up plan when the lake drops.” The EERC’s Water Management Center is also working with the U. S. Department of Energy and corporate partners to reduce the water use in power systems. One technology being demonstrated by the EERC recovers water from combustion flue gases to reduce the net water requirements of power plants burning fossil fuels. In addition, the EERC is also developing a new cooling system which, compared to conventional wet cooling systems, will significantly reduce makeup water requirements and is expected to be more economically attractive, says the EERC. Groenewold agrees that a concern is shortage of water. “It is fine in a
wet cycle,” he explains. “When we go back into a drought, we might not be able to use this water. If it is a choice for municipalities to get water or the oil industry or any industry to get water, law will determine that water go to the municipalities first.” Public complaints about the coal industry are that coal-fired power facilities use a lot of water. “But, they actually consume only a small percentage of what they use,” Groenewold explains. “Most goes into the system, comes out warm and goes right back into the lake. They may be consuming only eight percent of the total water that goes through the plant. The plant’s water usage is not quite as devastating as some people may portray it to be. It’s not a huge consumer, but it is a huge user.” Groenewold does state that as long as we have more and more demands on our water supply, we’re going to have an ever increasing conflict between those who are stakeholders. Another challenge is that people need to understand water and what the energy requirements are, says Groenewold. “We need to focus on conservation. We waste a lot of water. We have taken water for granted,” he adds. “It is all about education. We need to understand what the challenges are. We need to understand the enormity of water use in this region and country and hopefully we will be able to find a balance. If we ignore this issue, we could find ourselves in an unsustainable and untenable situation.”
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South Dakota wind is blowing By Alan Van Ormer or each 10 wind turbines constructed in South Dakota, there will be one job. For some states, that might not seem a lot. But for a sparsely populated state like South Dakota, that is considered economic development. By Ryan Schuster “We’re making headway,” says Steve Kolbeck, South Dakota Public Utilities Commissioner. “We’re seeing great growth. We have so many miles, so sparsely populated, I think people think we aren’t making headway. But we are.” Along with the jobs that are being created from construction of wind turbines, the state is also seeing an impact through manufacturing and education. For example, small communities are home to wind turbine manufacturers. Vocational schools are teaching people how to build and maintain the wind turbines. There are eight wind projects already in the state. The first was the Chamberlain Wind Project, a 2.5 megawatt facility that started in 2001. The last was Day County Wind, a 99 megawatt project that started providing green energy earlier this year. There are several wind projects under construction or close to starting construction. Buffalo Ridge II, developed by Iberdrola Renewables, is near completion northeast of Brookings. The 210 megawatt farm is considered to be the largest wind farm project in the state. To date, Iberdrola Renewables has completed the roads and foundations for all 105 wind turbine locations. Half of the turbines have been erected and the other half will be completed in 2010. The project will be commissioned and operational in the first quarter of 2011, says Timothy Seck, Director, Wind Development, Iberdrola Renewables.
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He adds that South Dakota is a great place to develop wind resources for several reasons. They include an excellent wind resource, supportive business environment and local communities established wind siting rules. In addition, Iberdrola Renewables has mature interconnection requests in South Dakota. “Iberdrola Renewables will provide a significant amount of money in taxes to the local communities and substantial landowner payments on an annual basis,” he explains. “Over two hundred workers are involved with the construction of the project and 10-15 will be involved in the ongoing operations and maintenance of the project. “ Seck states that one of the keys to unlocking further South Dakota wind potential is settling transmission policies within the Midwest Independent System Operator. This includes who pays for new transmission lines and the timing of building additional transmission infrastructure. Two other wind projects are hoping to start construction this fall. One is Prairie Winds SD 1, a 165 megawatt farm developed by Basin Electric Power Cooperative. This wind farm is waiting on a federal permit. The second is Strandburg Wind Farm near Strandburg, SD. This 20 megawatt wind farm, developed by Harvest Wind, is hoping to begin construction in November. Then there are three wind farms all waiting on transmission upgrades. They are Minnehaha West Wind, a 350 megawatt farm developed by Iberdrola in western Minnehaha County, Hurricane Lake, a 250 megawatt wind farm developed by Invenergy in Roberts County, and Dakota Wind Project, a 300 megawatt wind farm in Day and Marshall counties,
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Energy
developed by National Wind. In addition, organizers of the South Dakota Wind Partners have collected almost $13 million toward a $16 million goal for a seven-turbine wind farm in Jerauld County. Kolbeck explains that the Buffalo Ridge II Wind Farm will be important to the state. “It shows that South Dakota could support large wind projects,” he states. “The biggest thing it has done for South Dakota is show that that the state is ready for development. We can handle challenges with major turbines.” There are challenges to wind projects in South Dakota. South Dakota has 700,000 square miles, but only 800,000 people and the state don’t use much electricity. That means there is a need for a market. However, the difficulty of transporting this electricity lies in transmission. “We have the wind makeup that is enticing,” states Kolbeck. “However, transmission to get it there comes at a very high cost.” Then there are tax credits that are ending soon. “We need to extend the tax credits,” Kolbeck says. “Rules are so influx right now. Until we have a plan in place in our nation, it is very difficult which way to go right now.” Wind projects are subject to sales and contractor’s excise tax, as well as a form of property tax in South Dakota. “The contractors’ excise tax was recently a subject of debate in the 2010 Legislative Session,” says Kolbeck. “Typically new projects are charged a two percent contractors’ excise tax. However, there has been a formula to rebate some of that tax to incent large projects to locate here. This spring, the legislature changed that rebate formula a little bit for wind projects. The biggest change is that it is set to expire in 2013.” Kolbeck acknowledges that wind energy is a hot political topic. “I think it is very real that we can achieve success,” he explains. “We are always trying to balance ideas with reality. In reality, we are sparsely populated and don’t use much electricity. The idea that we can become a leader that is what we need to strive for.”
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Energy
45
ENERGY
PRAIRIE BUSINESS
ENERGY
PRAIRIE BUSINESS
Energy & Environmental Research Center
Playing a Key Role in
North Dakota’s Energy Industry The Energy & Environmental Research Center (EERC) at the University of North Dakota (UND) has a multitude of established programs dedicated to the advancement of commercially viable technologies for the energy and environmental industries in North Dakota. This year alone, the EERC’s regional economic impact is more than $130 million. This level of activity is supporting more than 1800 jobs throughout the region. For more information about the EERC’s expertise, visit www.undeerc.org.
EERC
Energy & Environmental Research Center ®
Putting Research into Practice
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EERC… The International Center for Applied Energy Technology®
46
Energy
Rail system nice option for moving oil By Maxine Herr ue to North Dakota’s Bakken Formation success, existing oil pipelines are at or near capacity and forcing shippers to look at alternative methods of transport to move the crude. Though they may lack the efficiency of a pipeline, railroad systems have become the next best option for moving large amounts of oil between regions. The use of the railroad has helped the state avoid deep discounts to oil companies. “It has worked out pretty well,” states Ron Ness, North Dakota Petroleum Council President. “We reached a cap on the pipelines, so having these rail facilities has been critical right now.” Ness says when there is a capacity constraint, it becomes a bidding war to move product. Fortunately, the rail facilities have helped alleviate some of that upset in the market. Currently, North Dakota has eight rail facilities either in operation or under construction, and an additional facility being proposed. As of June 2010, the rail facilities shipped approximately 30,000 barrels of crude oil per day. The amount they could potentially ship is highly variable, according to Lynn Helms, Director of the Oil and Gas Division of North Dakota’s Mineral Resources. He says it is based on rail car availability, but current operating rail facility capacity is 125,000 barrels per day. Helms admits with all of the oil activity taking place, it has been difficult to get
D
consistent reporting of transported volumes. Whether the oil drilling and pumping is sustained for these facilities remains dependent upon what happens in Washington, D.C. “We believe they will [be sustained] as long as federal legislation doesn’t result in major cost, tax, or oil price changes,” Helms says. Ness says oil prices have remained stable at approximately $70 per barrel, and North Dakota crude oil ranges from the low to mid $60s. At the beginning of the year, Ness was predicting that North Dakota could realistically produce over 350,000 barrels of oil a day by 2015. Now he says we’re nearly there. “We’re in that range already probably,” he said. “We had 310,000 barrels in July. With 143 rigs running we’re going to continue to ramp that up substantially in the next number of months.” A Texas company that began shipping North Dakota’s rich Bakken crude to Oklahoma by rail earlier this year is currently sending 65,000 barrels out each day from its loading facility in Stanley, ND. A round trip from Stanley to Stroud, OK is over 2,000 miles and takes eight days to travel. To ship oil by rail is estimated at $6 to $10 a barrel versus $5 to $7 per barrel by pipeline. The differential for 65,000 barrels could be as much as $450,000. But the extra cost is worth it for the ability to continually move the crude. According to Elizabeth Ivers, public relations director at EOG, the Stanley facility employs approximately 45 people, and exports its oil to market faster and more efficiently with its ability to load 14 cars simultaneously. But sometimes even just moving a little can mean a lot. In Stampede, a town near Columbus, ND, Pioneer Oil is loading North Dakota crude onto rail cars at a much smaller capacity. The facility is loading about 4,000 barrels a day. The filled cars go to Flaxton and then other railroads are involved in getting the crude oil to refineries. Other loading facilities currently in operation are in Minot, Tioga, New Town, Dore, Donnybrook and Ross. Another site is being proposed in Williston. “They are filling an important role preventing export bottlenecks until more permanent pipeline capacity can be built,” Helms states. “They are providing access to markets that will pay a premium price for pure Bakken crude oil.” Maxine Herr is a Bismarck, ND-based freelance writer. She can be reached at maxine606@msn.com.
Energy
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A ‘Breakthru’ in Minot By Alan Van Ormer he 2010 North Dakota Governor’s Rural Community Summit not only provided community economic development leaders around the state an opportunity to network, but, it also provided a chance to educate these same economic development leaders. North Dakota Department of Commerce Commissioner Shane Goettle says the hope is that the conference would challenge communities to think outside of the box. He says through the educational portions of the Summit the communities have a solid feeling of what site selectors are looking for. “This also helps new developers,” he adds. “Knowing how to pitch a community is challenging.” The 2010 Governor’s Rural Community Summit, entitled ‘BREAKthru’ was held in Minot on Aug. 24-25. It included various breakout sessions dealing with communities positioning themselves, breaking through destination marketing barriers, and finding creative ways to solve workforce solutions. In addition, there were best practices panel discussion on destination development, workforce attraction and recruitment, and business and community development. The keynote speaker – Terri Norvell, founder of Further Performance Group, based out of Westminster, CO., explains that life is about taking a risk. “Whenever we focus we do get results,” she says. “Believing in yourself amazing things are possible.” Norvell suggests that community leaders need to focus on what they can do, adding that our abilities, our capabilities are all in our heads. “It’s all about choice,” she says. “Where are you focusing your attentions?” North Dakota Gov. John Hoeven felt that those in the audience are the ones making a difference around the state and it shows. He explains that North Dakota made job creation its number one goal. Since 2000, job creation has been the engine that drives the state and makes things we want possible, Hoeven adds. “Jobs and opportunities have always drawn people,” he says. “We all have to be committed to do it.” Hoeven also agrees that the state has to stay focused, adding there will always be more to do. “There are going to be challenges.” He also says that the state has to continue to diversify as it grows. “Ag is our number one industry. It will always be our number one industry,” he explains. “We have to continue to make sure it grows and expands.” Energy, technology-based companies, and tourism are also part of the economic landscape. “We have to link with education,” he says. “We are making progress, but we have a lot more to do. As long as we keep you involved, we will be successful.” North Dakota Congressman Earl Pomeroy also spoke and told the crowd that in the room was the real hidden secret of North Dakota. He also states that vision, cooperation, and persistence are all part of what North Dakota does. In addition to those in North Dakota that know what is going on, there were several attending from outside the state that found out what North Dakota is doing.
T
48
October 2010
Keynote speaker Terri Norvell
Paige Webster, site selection consultant for “Let the rest of the Foote Consulting Group, in Phoenix, AZ, says he country and world know was attending to try to that the future is in this help rural communities understand what his part of the country.” company does. Foote Consulting Group helps - Joel Kotkin companies looking to expand or relocate companies throughout the nation. The group also helps companies with specific studies to put them at a competitive advantage. “We know North Dakota’s story,” he says. “In this business it is all about relationships. I’ve seen good, potential opportunities for existing industry and new opportunities for recreational and manufacturing companies.” Another site selection consultant was impressed with what he saw at the Summit. John Castro, managing director of MaximusAlliance, based in Dallas, TX, says he had never been to North Dakota, but the state was one of nine on the radar for renewable energy. MaximusAlliance assists companies in finding communities that companies should be interested in. “What is attractive about North Dakota is the cost of doing business (including real estate, labor, cooperation of local and state government),” he explains. “I feel comfortable that North Dakota has that capability that we could market to site selection committees.” In a session entitled “Revival of the Great Plains’, Joel Kotkin, internationally recognized authority on global, economic, political, and social trends, talked about what the United States could look like in 2050 and how this growth would allow the nation to emerge by mid century as the most affluent, cultural rich and successful nation in history. He explains that we are on the cusp of long-term opportunity in the middle of the country because of the need for food, adding the increased demand for ag products around the world.
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Kotkin also says that there are key opportunities in natural gas. “Outside of Canada, we shouldn’t be importing from anybody,” he states. Small cities are going to have big opportunities, according to Kotkin. One slide shows that demographic trends and growth create new opportunities, as well as the role of technology in opening global markets. North Dakota is beginning to take advantage, he states, but says the key is the advantage of being job-rich. “In the next 10 years those cities that have jobs are where people are going to go, “he says. “The entire Great Plains is making no case for its future.” He considers new technology the great equalizer because it could “telescope” the distance between communities, allow younger workers to choose affordable lifestyle and still stay in less dense areas, and help tie North Dakota directly to other global and metropolitan markets. Possible strategies that could improve prospects for the state includes targeting key mobile groups such as immigrants, 30 somethings and downshifting boomers (50-60 year olds not ready to retire), focusing not just on energy production, but processing and researching, building upon lifestyle and affordability advantage, and building on what North Dakota is – just making it work better. “This is a great period for North Dakota,” he concludes. “Let the rest of the country and world know that the future is in this part of the country.”
Scott Deutsch
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VIEWPOINT DOUGLAS GOEHRING
The meaning of harvest in North Dakota
ELIZABETH LARKIN
Biotech industry provides economic promise eed, Fuel and Heal. That is the foundation and the economic promise of the biotech industry. As we continue to work at moving our economies forward, biotechnology is taking an active role in meeting the challenges of finding new cures and improving health care, discovering new energy sources to fuel the country, and improving the way we feed the world. Biotechnologies and biosciences are outpacing every industry in terms of expansion, investments, and job growth. The South Dakota Biotech Association is proud to represent the companies and individuals who are moving this industry forward. Join us on Oct. 26 for the 5th Annual Summit and Annual Conference in Brookings to learn more. Meet with companies, universities, policy makers, and investors to discuss resources and advocacy while networking to strength the industry as it moves forward to feed, fuel and heal the world.
F
or a farmer, the harvest is the culmination of an entire year of planning, planting, fertilizing, spraying, hoping and praying – praying for rain and for sunshine, for no hail, no blight, no rust or anything that will damage the maturing crops. The end of the harvest is time to market or store the crop, repair and put away machinery and to start planning for next year. If prices are good, the harvest means opportunity – opportunity to upgrade equipment and facilities and to acquire new technology. It means opportunity for a more comfortable life, perhaps a new car or home improvements, new clothes for the family, perhaps even a bit of a vacation. For communities, especially smaller communities, a good harvest means those farmers will be coming to town to buy goods and services, everything from farm implements to furniture to dentistry. That translates into greater economic activity, more business, more jobs and larger tax base to support schools, roads, law enforcement and municipal improvements. The story of what the harvest means for our state is much the same, only on a larger scale. Fully a quarter of North Dakota’s economic activity and jobs are tied to agriculture. If farmers suffer, North Dakota does too. When farmers prosper, so does the state. In North Dakota, agriculture truly is everybody’s bread and butter. As I write this, most of the spring wheat, barley and dry peas are in the bin, and good progress is being made on our other important crops – soybeans, durum, canola, beans and sunflowers to name a few. For the most part, the 2010 harvest is looking pretty good, in some places, very good, even excellent. We can all breathe a sigh of relief. Farmers will rejoice in completing the planting-toharvest cycle of yet another year. We always look forward to a new year, new challenges, new adventures and new opportunities to grow food, fiber, feed and fuel for our country and the world.”
HEAL - South Dakota’s healthcare leaders, Avera and Sanford, have focused initiatives in the areas of Type I diabetes and behavioral sciences that have a global impact. Meanwhile other companies, such as Hematech, use the latest advancements in technology to fight disease. Each of these activities are creating sustainable jobs and strengthening our regional economies. There is a good reason South Dakota has identified biotechnology as a targeted industry for growth. The investment of millions of dollars in research and production have improved our biotech products, bolstered our existing industries, created new high wage jobs, and strengthened our economy with new global export opportunities. None of this happens by accident. Every day there are new examples of public – private partnerships that continue to move biotechnology forward. The South Dakota Biotech Association is proud to be a catalyst in continuing the success of biotechnology in the region.
Goehring is the Agriculture Commissioner for the state of North Dakota. He can be reached at ndda@nd.gov.
Elizabeth Larkin is the Executive Director of the South Dakota Biotech Association and can be reached at elarkin@sdbio.org.
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FEED - As the world searches for new technologies to feed a growing population, our association members are driving technologies that improve the production capabilities of our farm economy and are also pioneering new development and research targeted at dramatically improving food safety. One company, AEGIS, provides the critical testing for the transfer of genetic material in food borne diseases. FUEL - Global energy demands are projected to grow more than 50% by 2025. To meet that demand new sources of energy are being developed in South Dakota around biofuels and with research from our public universities, the South Dakota Corn Utilization Council, the South Dakota Soybean Research and Promotion Council and support from economic development corporations around the state. South Dakota has globally recognized brands that have an impact on providing new energy resources that incorporate environmental best practices.
ERIC GILTNER
Six small business challenges S
mall businesses have long been acknowledged as the backbone of the nation’s economy. They employ approximately 50 percent of the workers in the United States and it is estimated that up to 60— 80 percent of the net new jobs are attributable to small businesses. Below are the six biggest challenges facing small business owners in today’s recessive economy.
BALANCING THE MONEY EQUATION. Most businesses use a combination of long-term debt, lines of credit, and owner equity to run their operations. Long-term debt allows them to purchase needed capital equipment to improve efficiencies, while lines of credit provide funds to run operations until revenues are sufficient to finance business operations. Having a significant equity position allows lenders to look more favorably on loan requests. Securing the correct mix of owner equity and bank financing to properly run the business has become a challenge, given that many banks have tightened their lending procedures. This is occurring at the same time that some business owners are seeing their equity positions shrink from the selling-off of unproductive assets to meet current obligations.
costs , availability of key items, and proper care and handling of present inventory.
MANAGING YOUR TIME PROPERLY. It is easy for small business owners to focus on the “fun” or “interesting” aspects of the business (remember this is where their original passion lies) and as a result neglect the business end of owning a business – accounting, employee record-keeping, planning, and inventory control.
DEALING WITH THE UNKNOWN. Large companies have a distinct advantage over their small business counterparts in indentifying and preparing for changes in their environment. With more staff and resources they are more likely to be engaged in long-term strategic planning, a process that requires constant monitoring of a variety of direct and indirect forces affecting their industry. These larger companies are also engaged in lobbying efforts to help ease or prevent difficulties resulting from government regulation. Small business owners are too busy to engage in formal strategic planning and too small to effectively lobby individually in the government arena. To offset these problems successful small business owners set up networks of a variety of contacts – industry associations, other small business owners, vendors, customers, and community leaders – to provide them with information on trends affecting their business and have a voice in government policing-making that impacts on their business. Giltner is the area manager of the SBA. He can be reached at eric.giltner@sba.com.
FINDING THE APPROPRIATE UNIQUE SELLING POSITION. A key factor in being competitive is to have a Unique Selling Position (USP), easily recognized by customers as a reason for them to do business with you. The USP can be based on any of a variety of factors such as a prime business location, lowest prices, exclusivity of product offering, fast service time, high quality product offering, or extremely knowledgeable and customer service-oriented employees, to name a few. To find the appropriate USP requires an in-depth understanding of your own strength and weaknesses, as well as that of your competitors. Combining this understanding with an effective marketing plan is necessary to create awareness in the minds of your targeted consumer. This USP must then become the basis for all of your marketing communications to maintain and build a sufficient customer base.
MANAGING EMPLOYEES. Managing the workforce needs of a small business has become increasingly difficult due to the different layers of federal, state, and local regulations. Recruiting and retaining competent employees has also become increasingly difficult for small business owners as they struggle to find the right levels of compensation and autonomy for their workers. Having employees also requires the business owner to assume the roles of teacher, leader, motivator, and sometimes disciplinarian, to ensure the work is done properly and on time.
INVENTORY MANAGEMENT. The hidden costs of holding inventory can have a significant impact on the bottom line of any business. Holding inventory requires costs for physical space, security, insurance, handling, and losses due to theft, damage, obsolescence, or deterioration. Properly managing inventory in an environment with small profit margins, high inventory management costs, and fickle consumer demands, requires constant attention to a variety of factors – customer demand rates, supplier shipping times and
Sponsored by: BIO SD Soybean Research Council SDSU Hematech USD Faegre Benson Ficher ScienJfic Pioneer Sioux Falls FoundaJon Sanford ChrisJanson Land and CaIle EPSCoR PhRMA Avera
5th Annual South Dakota
Biotechnology Summit & Annual MeeGng Tuesday October 26, 2010
Volstorff Center South Dakota State University Brookings, SD
Bringing industries, universi3es and investors together.
www.sdbio.org
Prairie Business
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BY THE NUMBERS EMPLOYMENT (NOT SEASONALLY ADJUSTED) UNEMPLOYMENT RATE July 2010 North Dakota 3.5% Fargo MSA 3.7 Bismarck MSA 3.1 Grand Forks MSA 4.4 Minot MiSA 2.8 Dickinson MiSA 2.3 Williston MiSA 1.9 Jamestown MiSA 3.3 Wahpeton MiSA 4.2 South Dakota 4.3% Sioux Falls MSA 4.3 Rapid City MSA 4.1 Aberdeen MiSA 3.2 Brookings MiSA 4.2 Watertown MiSA 3.9 Spearfish MiSA 3.8 Mitchell MiSA 3.5 Pierre MiSA 2.8 Yankton MiSA 4.1 Huron MiSA 3.1 Vermillion MiSA 4.2 Minnesota 6.8% Minneapolis-St. Paul MSA 6.8 Duluth-Superior MSA 7.5 St. Cloud MSA 6.7 Rochester MSA 5.5 Mankato-N. Mankato MSA 6.1 Brainerd MiSA 8.2 Fairbault-Northfield MiSA 7.8 Winona MiSA 7.2 Fergus Falls MiSA 6.4 Red Wing MiSA 6.8 Willmar MiSA 5.8 Austin MiSA 5.7 Bemidji MiSA 8.2 Alexandria MiSA 5.6 Hutchinson MiSA 9.0 Owatonna MiSA 7.8 Albert Lea MiSA 7.7 Marshall MiSA 5.6 New Ulm MiSA 6.0 Worthington MiSA 4.9 Fairmont MiSA 7.1
July 2009 4.0% 4.3 3.3 4.6 3.5 3.0 2.7 3.1 5.3 4.6% 4.5 4.1 3.1 3.9 6.6 3.7 4.2 2.7 5.0 3.1 4.1 8.0% 8.1 9.4 7.8 6.5 6.9 8.7 8.8 8.4 7.8 7.8 6.6 6.4 8.7 6.2 10.3 9.2 8.6 5.9 6.7 5.2 8.4
EMPLOYMENT July 2010 July 2009 364190 359540 121499 116061 63573 62405 52604 52001 34393 33164 15050 14910 14036 14375 13014 12140 11550 11540 434325 436020 124380 124310 67165 66940 22895 22865 17285 17705 18475 18650 13515 13520 12985 12965 12605 12530 11675 12040 9645 9700 6880 6990 2788049 2767843 1762002 1732718 147909 136382 101313 100006 103324 100792 54296 54288 47936 45969 31277 30863 25357 26939 28181 28830 23999 24159 24194 22602 19901 20391 19411 20144 20248 20631 16970 18437 18160 19176 15970 15416 13548 14092 14144 14137 11441 11223 10639 10851
MSA — Metropolitan Statistical Area MiSA — Micropolitan Statistical Area Sources: U.S. Bureau of Labor Statistics, Minnesota Department of Employment and Economic Development, Job Service North Dakota, South Dakota Department of Labor
CANADIAN EXCHANGE RATE 7/27/10
8/26/09
8/26/10
U.S. to Canadian Dollar
$1.0357 or $0.9655 $1.0991 or $0.9098
$1.0546 or $0.9482
U.S. to Euro
$0.7703 or $1.2983 $0.7028 or $1.4229
$0.79 or $1.2716
U.S. to Chinese Yuan
$6.7781 or $0.1475 $6.8310 or $0.1464
$6.7995 or $0.1471
U.S. to Japanese Yen
$87.920 or $0.0114 $94.262 or $0.0106 $84.6388 or $0.01182
U.S. to Mexican Peso
$12.66 or $0.07901 $13.16 or $0.07598
Source: Bank of Canada
54
October 2010
$12.98 or $0.07706
Data provided by Kingsbury Applied Economics
NORTH DAKOTA OIL ACTIVITY
June 2010 May 2010 April 2010 March 2010 February 2010
June 2010 May 2010 April 2010 March 2010 February 2010 January 2010
Sweet Crude Price/BBL
Production BBL/day
$63.14 $60.10 $75.41 $73.48 $67.58
315,278 298,060 284,400 277,300 261,200
Drilling Permits
Producing Wells
Rig Count
128 102 106 120 94 101
4,979 4,893 4,810 4,736 4,655 4,628
125 114 107 102 93 81
Source: North Dakota Office of Management and Budget
AIRLINE BOARDINGS JULY 2010
Minneapolis-St. Paul Fargo Sioux Falls Rapid City Bismarck Duluth Grand Forks Minot
% CHANGE/JULY 2009
1,590,055 34,615 33,573 36,332 19,317 15,273 11,032 9,609
- 1.23% - 4.04% 4.60% 9.50% 12.73% 17.18% 24.49% 32.03%
CANADIAN BORDER CROSSINGS AUTOMOBILES MINNESOTA
Intl. Falls-Rainer Grand Portage Baudette Warroad
TRUCKS
JULY 2010
% CHANGE /JUNE2009
JULY 2010
% CHANGE /JUNE 2009
64231 33114 23123 17240
20.40% 35.00 36.76 24.44
2065 1457 615 745
18.20% 3.77 11.82 -19.11
40366 11936 5298 11264 4822 4222
21.91 24.79 9.17 18.67 25.57 16.50
15897 7187 1619 2217 1156 572
6.58 13.18 - 0.74 3.31 -21.57 1.24
NORTH DAKOTA
Pembina Portal Neche Dunseith Walhalla Noonan
Source: US Customs and Border Protection
NORTH DAKOTA is our classroom. ENERGY EDUCATION is our mission. The School of Engineering and Mines at the University of North Dakota continues to be a world leader in energy-related education and research.
THREE NEW DEGREES ... • the Bachelor of Science in Petroleum Engineering, • the Master of Science in Energy Engineering, and • a customizable Ph.D. in Chemical Engineering ... join our Ph.D. in Engineering with an energy track to create a strong academic focus on energy. In fact, the Master of Science in Energy Engineering is the nation’s first graduate degree in sustainable energy engineering. The UND School of Engineering and Mines is responding to the needs of the state by providing education and research to support development in the Bakken Formation in western North Dakota, as well as in other traditional and alternative forms of energy.
The UND Petroleum Research, Education and Entrepreneurship Center Hosted by the School of Engineering and Mines, the Center seeks to: • Improve our understanding of the petroleum geology, geophysics and engineering of the Williston Basin; • Develop enhanced recovery techniques for the Bakken Formation; • Develop techniques for carbon dioxide sequestration in the Williston Basin; • Develop engineering-enhanced geothermal systems using oil field waters to generate electrical power; • Address environmental and policy issues of petroleum production; and • Help entrepreneurs develop new businesses and industry. The Center’s educational mission will be to train UND students and industry professionals to meet the challenges of these focus areas and in the special techniques for extracting oil from the Bakken Formation.
Creative.
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Entrepreneurial.
Spirited.
www.und.edu / www.engineering.und.edu / 701-777-3411 AN EQUAL OPPORTUNITY/AFFIRMATIVE ACTION INSTITUTION
Building A Strong America®
Our North Dakota roots are strong, and their reach is long. MDU Resources Group’s diversified businesses operate across most of the United States, helping build a strong American infrastructure. • We provide natural gas, oil and electricity that power business, industry and our daily lives. • We provide pipes and wires that connect our homes, factories, offices and stores to bring them to life. • We build the transportation network of roads, highways and airports that keeps our economy moving. We are proud to be a Fortune 500 company, and the largest publicly traded business headquartered in the four-state region of North Dakota, South Dakota, Montana and Wyoming.
1200 West Century Ave., Bismarck, ND | www.mdu.com
Montana-Dakota Utilities Co. • Great Plains Natural Gas Co. • Cascade Natural Gas Corporation • Intermountain Gas Company • WBI Holdings, Inc. • Fidelity Exploration & Production Company • Williston Basin Interstate Pipeline Company • Bitter Creek Pipelines, LLC • Total Corrosion Solutions, Inc. • Knife River Corporation • MDU Construction Services Group, Inc.