Western Sugar

WESTERN SUGAR

Star Herald

June 4, 2002

The Western Sugar Cooperative will receive $150,000 in LB 840 funding from the City of Scottsbluff under a measure passed Monday.

The City Council approved Western Sugar's request for funding to aid in the retention of 209 employees at the cooperative. The money will serve as working capital to transition the company from Tate & Lyle to the new cooperative's management, according to company officials. Start up costs will include payment of salaries and local purchases, and some of the proceeds will also be used to offset due diligence costs for the Scottsbluff location.

Jack Fulton, the cooperative's director of government relations, said the company anticipates turning a profit after the first full year of operation as a cooperative.

"Next year, we'll be in the black, and from then on," he said. "The whole secret is beet acres."

Fulton said there are 143,000 acres committed for this year, up from 127,000 a year ago.

The council reserved the right to review the company's financial condition after its second and third years to determine whether additional LB 840 funds are needed to maintain the retention effort. Contingent on the City's ability to keep its LB 840 fund at acceptable levels, an additional $150,000 may be made available to the cooperative in each of those two years as well.

"People aren't going to see any change," Fulton said. "The management is going to remain the same.the employees are going to remain the same."

Fulton said that Western Sugar's deal with Tate & Lyle included six factories and five terminals, but the Scottsbluff operation accounts for 40% of the cooperative's book value and 26% of its jobs. In addition, 85% of the company's grocery product is shipped from Scottsbluff, making it an important piece of the operation.

Mayor Dave Boeckner asked Fulton whether the cooperative would consider permitting annexation of its property into the corporate boundaries of the City. Fulton said the possibility would be considered and suggested that communication begin between City representatives and those of the cooperative to determine advantages and disadvantages of such a move.

Star Herald

June 2, 2002

Officials of the new Western Sugar growers cooperative are set to ask for funds from the City of Scottsbluff .

The request will come in executive session at the City Council's meeting Monday at 6 p.m. in the Council Chambers of City Hall, 1818 Avenue A.

According to City Manager, Rick Kuckkahn, the cooperative will be seeking LB 840 assistance, earmarked for the retention of employees and the transition of administrative services from Western Sugar's former owner, Tate and Lyle. Some of the funds may be used to offset due diligence costs for the Scottsbluff location.

After representatives met with the City's LB 840 Committee, Kuckkahn said the Committee's recommendation is for $150,000 in the first year. Following that, there would be two years in which the company's financial status would be reviewed, with the possibility of an additional $150,000 each year. A master agreement would ensure 209 employees at Western Sugar, and addendums would be drafted for those employees each of the following two years, pending council approval.

All funds issued would be based upon the City's ability to pay out of its LB 840 fund and still be able to keep it solvent.

Star Herald

May 22, 2002

The Western Sugar Cooperative is looking for assistance through the City of Scottsbluff 's LB 840 funds.

In a presentation to the City's LB 840 Committee, the cooperative asked for assistance to help pay for transition fees after purchasing the operation from Tate and Lyle.

Scottsbluff City Manager, Rick Kuckkahn, said the LB 840 Committee will recommend to the City Council that funding be granted in the amount of $150,000 to $200,000 in the first year, with a provision for review of the next two years, possibly funding an additional $150,000 in each of those years.

The application is for 200 employees, Kuckkahn said. If the City were to fund the cooperative for the additional two years, an addendum would be added to allow for the same 200 employees. A similar agreement was worked out previously with Magnolia Homes.

"Usually in our sense, we fund the creation of employees, rather than retention," Kuckkahn said.

The Western Sugar funds would help the cooperative migrate administrative services, such as payroll, to the local operation and away from Tate and Lyle.

The LB 840 Committee expressed a desire to be able to review the cooperative's cash projection, but Kuckkahn said he didn't expect any abnormalities to be found.

The Committee's recommendation for each of the three potential years will be based on the City's ability to pay out of its fund and still be able to keep it solvent.

The recommendation will come before the City Council at the council's next meeting, June 3.

Star Herald

May 2, 2002

Sugar beet growers found they had two reasons to celebrate on Wednesday morning. Rain and snow had moved into most of the Nebraska Panhandle in measurable amounts, and the growers' co-op had closed the deal on its purchase of the Western Sugar Company.

After almost two years of negotiations, Western has been purchased by the Western Sugar Cooperative, formerly the Rocky Mountain Sugar Growers Cooperative. The $185 million deal included merging Western Sugar into the co-op.

According to Richard "Rick" Dorn, Hardin , Montana farmer and president of the co-op board of directors."It is a good purchase price and an exceptional value for the growers. Nobody loses in this deal. It benefits the growers, the employees and the communities."

"It brings stability to the industry," said board vice president and Bridgeport area farmer, Kevin Hall. "It's a terrifically good opportunity to follow our product from start to finish and control how long the industry stays here and how it works. It's a win-win situation for growers."

Robert "Bob" Busch, Mitchell area farmer and a member of the co-op board, said, "I give all the credit in the world to the growers for sticking with us. Many times the glue softened, but we never came apart."

"I'm excited and ecstatic and looking forward to making this a success," he said.

There are nearly 1,000 members planning on the co-op's success. Kent Wimmer, Western's director of agriculture at Scottsbluff, said there are more than 900 members in the four states, and 100 non-coop members growing beets this season. Companywide, there are 143,500 acres, and 43,319 acres are in Nebraska .

According to Dorn, co-op headquarters will be located in the Denver area. "That's the marketing center and it's centrally located," he said. "It's the best place to serve customers and growers."

According to Dorn, the $185 million price tag includes $57 million for properties and equipment, $124 million in working capital, and $4 million in grower receivables from overpayments on the 2000 crop.

Dorn said there will be no major personnel changes at this time. Approximately 283 full-time employees and 264 seasonal employees are located at the Bayard and Scottsbluff factories , with a payroll of $13.2 million.

Other plants are located in Fort Morgan and Greeley , Colorado ; Billings , Montana ; and Lovell , Wyoming .

" At this time, we plan to run all of the factories this year ," Hall said.

Star Herald

March 23, 2001

Over the next 10 years, the Rocky Mountain Sugar Growers Cooperative will receive a total of $500,000 in LB 840 grant money for job retention.

The grower-owned co-op will use the money to help retain 200 jobs in the local Western Sugar Company facilities.

"We're very glad to have the community back us up with this grant," said Kevin Hall, co-op vice president and Bridgeport farmer.

Robert Busch, a co-op board member and president of the Nebraska Sugarbeet Growers Association, echoed Hall's comments, and added, "The application process went very well, and we're very pleased with the reception the LB 840 committee gave the Rocky Mountain Sugar Growers Cooperative."

According to Scottsbluff City Manager, Rick Kuckkahn, the grant will be made in installments, beginning with 50,000 within the next two months, followed by $30,000 the second month. The remainder will be paid out over the next decade.

A main factor in the decision to approve the grant was the impact these jobs have on the local economy. "At $60 million, that is a significant impact on the economy of the valley," Kuckkahn said. He cited the cost of running the bullet trucks used to rehaul beets as an example. The trucks, which are headquartered in Scottsbluff, used $1 million worth of fuel last year."That sales tax revenue has a major impact on city government," Kuckkahn said. "The tax will continue to contribute to the fund that is used to make the grant. Everyone benefits from it."

The money will be used only for job retention, Kuckkahn emphasized. "We're not involved in buying shares."

Compared to the HomeStar grant, which amounted to $290 per employee per year, Kuckkahn said the cooperative's grant is $250 per employee per year for the 10 years. He also said when the LB 840 funds are used for new jobs, the target rate is $500 per employee per year for 10 years.

Kuckkahn said there has been a lot of concern about the vitality and health of the sugar industry. "Conditions are not good in the sugar industry at this place in time, but we are confident and optimistic that a federal policy will work to resolve the current problems. In that case, the co-op needs to be in a position to take advantage of the markets that will open."

The quality of the people managing the cooperative also gave confidence to the committee, Kuckkahn said. "Their people are among the best in the industry. They have prior experience in co-ops that are thriving and a great deal of respect in sugar industry circles. We think the co-op has a real solid management foundation in place."

Heading the company will be CEO Larry Steward, a former Great Western Sugar employee. He retired last year as president and CEO of Minn-Dak Farmers Cooperative, where he had worked since 1990.

Western Sugar employees now located in Scottsbluff will remain here, according to co-op board vice president,Kevin Hall, a Bridgeport area farmer.

The purchase is expected to be completed late next week when documents are signed in the Salt Lake City office of co-op attorney, Randon Wilson.