Partnering for Success in Minnesota

A partnership between southwest Minnesota farmers and POET has yielded a bumper crop of opportunities at the Bingham Lake biorefinery for nearly 15 years.

When Denny Frederickson signed on in 1994 to help a small group of southwest Minnesota farmers sell shares in their vision for an ethanol plant, he found it to be tough sledding. Ethanol was new to the area and farmers were skeptical. But he found help from an unexpected source.

“We held over 50 fundraising meetings, and we had a lot of farm wives there,” he recalls. “A lot of them were getting fed up because their husbands could never achieve the marketing year average price for corn. They realized that if they bought shares in an ethanol plant that they could then get Chicago Board of Trade market value. The women were really a big motivator.”

Frederickson, whose professional expertise was in financial cooperatives, had run the numbers and knew that building an ethanol plant made good business sense. But he received additional assistance in the meetings from one of his advisory committee members, Bob Soleta, who had been an engineer on a B-24 during World War II and knew firsthand the value of ethanol as a fuel.

“Bob was always so enthused about ethanol,” says Frederickson. “He used to tell how they carried it on their plane and injected it into the fuel when they needed more power, and how it kept their fuel lines from freezing at high altitudes.”

At the same time they were raising capital, the farmer group board was also visiting the few ethanol plants in the area to see what they could learn. When they visited the plant in Scotland, S.D. that was run by the Broin family, the group knew they’d found what they were looking for.

“Not only did their plant run much better, but they also offered engineering and construction, information technology, and management – all the things we were lacking,” says Frederickson. “At that time, we’d only raised 64 percent of the funds we needed from 250 farmers, and they agreed to pony up the rest. We formed a limited liability partnership – between the Southwest Minnesota Agrifuels Corporation (SMAC) and the Broins (now POET) – that exists to this day. It’s been a great relationship.”

Construction on the 11.5 million gallon plant began at Bingham Lake in 1996, and it started grinding corn in June of 1997. It was the first plant in Minnesota to have POET management.

“After the tough time getting started, we made money the first month,” says Frederickson, of nearby Windom. “We never had a month where it wasn’t profitable.”

A Top Performer

With Frederickson managing the co-operative and POET managing the plant, it was so successful that SMAC and POET soon decided to expand in order to achieve greater economies of scale. The Bingham Lake facility was the first POET biorefinery to undergo an expansion, and unlike its newer counterparts, wasn’t built with that in mind, which presented some challenges. But the expansion was nevertheless completed during 2000 and 2001 to a new nameplate capacity of 27 million gallons per year. Current production exceeds that at 35 million gallons and 93,500 tons of Dakota Gold distillers grains annually.

A later addition added carbon dioxide production to the product mix, and the plant was the first in the POET family to receive the Total Water Recovery system, which recycles all process water. A host of other upgrades have been made regularly since 1999. Even though Bingham Lake is one of POET’s older biorefineries, that doesn’t keep it from regularly posting impressive results, including over five years without a lost-time accident.

“Our production and percentages are second to none. It’s very efficient,” says current SMAC Manager Dan Kelly, who has been with the Bingham Lake plant since 1998.

General Manager Jim Basiliere gives much of the credit for the plant’s success to its 40 team members.

“We have a nice mix of long-term and newer team members here,” says Basiliere. “There’s a very strong work ethic in the team. They’re good, hard-working people who are very conscientious, take a lot of pride in the plant and their work, and have lots of good suggestions. They’re a great team to work with, and I’m very pleased to have the opportunity to manage them.”

Kelly says the partnership with SMAC is unique in the POET family, but it has worked well. While the facility operates pretty much like any other POET plant, it has a higher percentage of farmer ownership than other POET plants and the SMAC board is very active. All of those factors have led to positive results for area farmers and the community.

“It’s helped the basis for corn a lot, which benefits local farmers,” he says. “It’s also been a very good thing for investors and the local community. When we go to pay our taxes, the people there get a very big smile on their faces – we’re a big help to the local tax base.”

All in the {POET} Family

By most people’s standards, Denny Frederickson has lived a pretty interesting life. After serving with the U.S. Army in the Korean War, he used his GI Bill benefits to participate in a two-year, on-the-job-training program with the Farm Credit System. After completion, he stayed with that system until 1966, when he went to Uganda as a consultant on credit cooperatives until 1974. He also did other consulting stints in the Dominican Republic, Botswana, Egypt, Ethiopia, Pakistan, and Kenya at various times. He also served two terms as mayor of Windom, his home town, and one term in the Minnesota House of Representatives.

But even with such an eventful career, he views his time with SMAC and relationship with POET as highlights in his life.

“It was a huge amount of work, but it was also a huge amount of fun!” says Frederickson, now 80.

Imagine his surprise, then, when he got a phone call from his son Dean Frederickson a little over 10 years ago.

“He said, ‘Guess what – I’m coming to work for POET,’” smiles Denny. “I never knew anything about it until it was a done deal.”

For 25 years, Dean had worked for a large agribusiness in Houston, and then Cincinnati, where he was the General Manager for Ohio River shipping operations. He says that his dad never directly influenced his decision, but that Denny’s relationship with POET had piqued his interest in a couple of other ways.

“Because of Dad’s experience, I knew about renewable fuels and am a firm believer in what a great thing they are for this country,” he says. “I also liked the challenge of being able to start a brand new business, entirely from scratch.”

Dean was hired as the startup General Manager of what would become Dakota Ethanol in 2001 at Wentworth, S.D. A few years later he managed POET’s Research Center at Scotland, S.D. before moving on to start up another POET plant at Mitchell, S.D. where he’s the current General Manager. He says he’s very happy with his decision to make the change.

“Working for POET’s been a great thing for me,” he says. “I also like the people and the outdoors here.”

When Dean and his wife relocated to South Dakota, they brought along their daughter Lora (Frederickson) Zwart who works as an IT Business Analyst for POET’s corporate office in Sioux Falls. Having grown up in Houston and Cincinnati, she reports that she originally had no interest in staying after she got her degree, but that her plans soon changed.

“I went on a blind date with this farmer named Charlie and the rest is history,” she says. “We got married and moved to the farm, and I absolutely love it here now.”

Lora reports having adjusted quite nicely to farm life, where with Charlie and their two sons, they raise crops, beef cattle, a few chickens, a goat, and a duck.

“I love farm life, especially being outside in the spring and seeing all the baby calves running and playing around,” she says.

Are there any more future POET employees in the Frederickson line?

“Our sons are only 5 and 3, so it’s a little early to say,” laughs Zwart. “But I wouldn’t rule it out.”

Zwart says she enjoys her job and has made great friendships. She initially came to POET because of the company’s progressive approach to technology, but she also appreciates it for making a positive difference in the world.

“You can sleep better at night, just knowing you’re doing good, helping society,” she says.

Man of Many Hats

As the Commodity Manager for POET Biorefining – Bingham Lake, Darren Kalvig wears a lot of hats – corn procurement; shipping DDGS, ethanol, and CO2; supervising staff; working with other departments and more. But his favorite thing is working with the customers.

“Some things just get in your blood,” he says. “I really enjoy getting to know the customers and their families, and how we can help them. After 17 years, I still get kind of a rush buying corn and helping customers decide when and how to market it.”

Then when he goes home, he switches to another set of hats – as the mayor of Bingham Lake. He admits that being the mayor of a city of 180 isn’t exactly a full-time job, but that it keeps him busier than one might suspect.

“In a town that size, I’m the water department, the sewer department, and police department. I’m definitely the complaint department,” he laughs.

Kalvig originally grew up in Kenyon, Minn. where he knew the Broin family, which is how he came to work for POET.

“I was working in sales, and Jeff Broin (POET Founder and CEO) came home for the weekend from the Scotland, S.D. plant, their first,” he recalls. “He told me that they were expanding and thought I’d be a good fit for a new position. I thought it over, and it seemed like a nice challenge, so I loaded up my truck and moved to South Dakota in 1994.”

After working at Scotland for a couple of years, he was promoted to his current position at the new Bingham Lake plant. Looking back on his 17 years at POET, he really appreciates his customers, whom he says are the key to the company’s success.

“It’s all about relationships,” he says. “It’s not the day you buy the corn, it’s all the time you spend with them up to that point that counts.”

Camaraderie is Key

Accountant Donna Torkelson readily admits that when she first came to work at POET Biorefining – Bingham Lake, she didn’t know anything about ethanol.

“I’d worked for a large agribusiness, and when they consolidated their operations, my job was basically eliminated,” she says. “I came here because I knew a lot of area farmers and enjoyed working with them. But once I got here, I learned that ethanol’s actually pretty cool and that it’s also good for the environment.”

Torkelson, who lives in nearby Windom and enjoys hiking, embroidering, quilting, and antiquing (“going around looking at junk”) in her spare time, likes working at POET, especially with her fellow team members.

“I don’t think I could find another job where they treat you so well and look out for your welfare,” she says. “I especially enjoy my fellow team members; they’re a lot of fun to be around.”

Strong Community Supporter

Dave Cory, General Manager of radio station KDOM in Windom, Minn. has been serving up local news, farm and sports programming, and country music to listeners in southwest Minnesota for over 30 years. He’s also been covering POET’s Bingham Lake plant for much of that time – even before there was a plant.

“We were active in supporting the committee that worked for years to start the plant,” he says. “We did a lot of news stories and interviews on them back in those days.”

Cory states that once the plant came online, KDOM has been active with them from both a news and advertising standpoint. He adds that the folks at POET have been good community members.

“When you have a business of their magnitude that’s also a strong community member, that’s outstanding,” says Cory. “Their people have always been there for the community, and we’re looking forward to working with them for years to come.”



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