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Formation of SMBSC

Aerial photo from November 2010
In March 1971, members of the Southern Minnesota Beet Growers Association were informed that the market for their sugar beets would close as of that season, that the processing facility at Chaska, Minnesota would cease operations. The reasons given were small size, obsolescence, high cost of freighting beets, and the cost of renovating and adding pollution controls.

This decision left the dedicated farmers with no market for their crop and with the unbroken history of satisfactory sugar beet production in this area. They immediately began searching for a way to build a sugar factory to be owned by the growers themselves. The obstacles and hurdles encountered seemed to be insurmountable at times, but perseverance was a strong point of the key individuals closely involved with this endeavour.

By October 1972, the Growers Association had formed a cooperative, a suitable site had been selected, and a considerable amount of preliminary groundwork had been laid in pursuit of their goal - a sugar factory to serve the needs of the approximate 300 growers involved. In the ensuing months, construction contracts were let, financial arrangements were sought, grower agreements were prepared and signed, and by March 28, 1973, the newly-formed cooperative was ready for a gala ground-breaking event for a $60 million sugar processing facility.

Construction began in earnest in May of 1973, with completion expected in time for the first harvest in the fall of 1974. However, setbacks arose such as a shortage of equipment for the factory, strikes by the construction workers, and the ever elusive finalization of the financing package.

Photo of factory from late-1970s
With the arrival of Spring in 1975, the outlook was better and approximately 50,000 acres of sugar beets were planted. This fledgeling co-op was continuing its pursuit of financing despite the many problems, and the not-quite-complete factory was dedicated at a three-day celebration in July 1975.

American Crystal Sugar had been retained on an interim basis to manage the operation for the cooperative, and on October 14, 1975, slicing of the 768,000 tons of sugar beets produced began, a large crop for a first-year campaign. New personnel, equipment failures, design defects and other problems contributed to significant delays during the early years of the Operation.

In 1978, new grower contracts were signed, permanent financing arrangements were reached, a new management team was hired, and Southern Minnesota Beet Sugar Cooperative took over the operation of their factory, achieving the goal set in 1971.

The summer of 1989 began construction of the molasses desugarization facility. This $18 million addition further processes the sugar normally lost in molasses. In addition to the recovery of sugar, the plant produces a concentrated molasses fraction.

1990's expansion with Factory roof removed

With completion of construction in September 1990, the plant provided for desugarization of molasses from the 1990 crop. The expansion provided a positive effect of approximately $15 million annually to the economies of south central Minnesota. Total economic benefit currently exceeds $180 million annually.

In 1991, further expansion began to increase slicing capacity and grower base. The first expansion phase to the factory began in the summer of 1992 and was complete for the harvest of that crop. The second expansion phase was completed during the summer of 1993. The sale of stock to 106 new shareholders along with a stock dividend to current shareholders increased the grower base to 465 shareholders and 100,000 shares.

In 1997 a capital plan that included improved sugar cooling/drying, improved crystallization, a step to automation, and an improved management information system was implemented. Vision 2002 a five-year capital plan for Engineering the Future was completed and approved in 1998. To meet the Vision 2002 objective of updating equipment and expanding capacity, 1999 proved to be challenging for the operations and engineering teams to complete the most extensive factory improvement since the factory was built.
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