Soya Plant Gets Tax Break

January 3, 2003
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ZEELAND — A new $4 million processing plant for refining soybean oil will give Zeeland Farm Services Inc. a greater hand in producing the final product that ultimately goes to market.

The Zeeland Township-based agri-business last month landed one of only five agricultural Renaissance Zone designations from the Michigan Economic Development Corp. that grants virtually tax-free status to the planned oil-processing operation. Zeeland Farm Services hopes to have the new plant, operated by subsidiary Zeeland Farm Soya, operating by next spring.

In undertaking the project six years after opening the largest soybean processing facility in Michigan, Zeeland Farm Services is responding to a changing industry that has the players handling more of the individual processing steps on their own, which is squeezing smaller operators out of the mix, President Cliff Meeuwsen said.

The new plant will refine crude soybean oil into a grade of oil that's used in a wide variety of food products. Zeeland Farm Services now ships the crude soybean oil resulting from the processing of soybeans elsewhere for refining.

"The market opportunities and the marketplace are becoming integrated, all the way to the family, all the way to the retailers and all the way to the customers. It's either find a way to compete with them or you don't, and if you don't you're in trouble," Meeuwsen said. "In order to take care of that, we went up a couple of steps in the process."

Zeeland Farm Services, a 52-year-old family-run operation that includes a grain elevator and a transportation company, now produces about 95 million pounds of crude soybean oil a year, a small portion of which is refined, bottled and sold to restaurants and at grocery stores, including D&W Food Centers, under the "Select Oil" brand name.

Low-fat soybean oil is used in numerous food products, as well as medications, ink, diesel fuel, paint, lubricants, plastics, solvents, detergents and many other industrial products.

"There's just a huge cut of products out there," Meeuswen said. "Soy oil is not just a food. It's a way of life. It's in a lot of things."

Soybean oil production in the U.S. has steadily increased for many years, hitting 18.8 billion pounds in 2001. That's up from 14.3 billion pounds a decade earlier and 8.6 billion pounds in 1976, according to the U.S. Department of Agriculture.

One of the hottest uses for soybean oil is for making cleaner burning biodiesel fuel that operates in diesel engines without modifications. Biodiesel consumption has soared from just 500,000 gallons as recently as 1999 to 12.5 million gallons in 2001 — and a projected 17.5 million gallons for 2002, according to the National Biodiesel Board, a trade association representing the biodiesel industry.

Zeeland Farm Services employs about 120 people. The new soybean oil processing plant will generate about 30 new jobs in the years ahead, Meeuswen said.

Statewide, the five new agricultural Renaissance Zones designated by the MEDC — all of which cover existing agricultural processing operations that are expanding — will facilitate $60.6 million in new investment and the creation of 270 new jobs.

The agricultural zones are among 34 Renaissance Zones the MEDC either designated or modified last month in 19 counties. The MEDC expects the zones to result in a collective $957 million in new business investment, creating 4,000 new jobs.           

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