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Tru Shrimp to build in Madison; $30 million impact expected - Daily Leader Extra : Top Stories

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Tru Shrimp to build in Madison; $30 million impact expected

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Posted: Friday, January 4, 2019 4:25 pm

Spirits were high in the board room at Heartland Consumers Power District on Friday morning when tru Shrimp announced plans to build its first commercial shrimp harbor in Madison.

The facility is expected to employ 60, produce 8 million pounds of shrimp annually, and have a $30 million impact on a five-county area.

Gov. Dennis Daugaard, who was on hand for the announcement, said he has been working assiduously since 2015 to bring tru Shrimp to South Dakota.

"I can't tell you how excited I am about this," Daugaard said. "I can't think of a better way to spend my last day in office than announcing this."

Daugaard said that he has pitched the economic benefits of locating a harbor in South Dakota at the annual buffalo roundup at Custer State Park and over holes of golf in Pierre. He indicated he has also visited the company's pilot site in Balaton, Minn.

In describing the facility with its stacked trays, which tru Shrimp calls "basins," Daugaard indicated 42 acres of surface water are going to be created in the facility. A press release from the Governor's Office of Economic Development indicated the facility will be located in the Lakeview Industrial Park. Architectural renderings at Heartland showed how it will look.

"It's a major facility which will be built here," Daugaard indicated.

He talked about the future of aquaculture, which involves raising saltwater and freshwater animals in a controlled environment. He said the industry is in its infancy and contrasted what has been done in the past to what tru Shrimp has proposed.

"For the most part, it has been big pits in the middle of a field," Daugaard said, explaining these pits were open to environmental influences and required the use of antibiotics.

Michael Ziebell, president and CEO of tru Shrimp, and Brian Knochenmus, chairman of the board of directors for tru Shrimp, also spoke. The GOED press release reports "tru Shrimp is focused on sustaining a growing global population with healthy, clean shrimp. They believe it is their social responsibility to exceed food safety standards while limiting their environmental impact."

The press release goes on to say the company is "committed to creating sustainable approaches for the world. When designing tru Shrimp, processes were optimized to minimize the impact on the environment."

Casey Crabtree, director of economic development for Heartland, was the emcee for the announcement and set a jubilant tone by noting Heartland CEO Russell Olson has had a long history of economic development.

"His first achievement was establishing the fur trade at Fort Pierre," Crabtree said.

Ziebell provided the context for the facility by saying Americans consume 1.9 billion pounds of shrimp per year and most of it is imported.

"Our goal is to grow shrimp in a safe and sustainable way," he explained.

The technology being used was developed by Texas A&M. Tru Shrimp obtained the patent to develop it for commercialization. The pilot site, Balaton Bay Reef in Balaton, Minn., was opened in August 2018.

At that time, the company announced plans to develop the Luverne Bay Harbor Complex with ground-breaking scheduled for June 2019. The GOED press release reported "there are open items related to the Luverne site that need to be addressed before tru Shrimp can proceed."

Ziebell is quoted as saying, "Our timeline for capital financing and construction in 2019 does not allow adequate time to resolve the items in Luverne. Locating the first harbor in Madison not only meets the critical components of our business model, but our timeline as well."

Ground-breaking in Madison will be in late spring or early summer.

"There is no growth in the harvesting of shrimp anywhere in the world," Ziebell said, explaining the need for the company's technology. "Fifty years from now, we'll have to figure out how to feed people, and aquaculture will be a part of that."

He indicated construction of the Madison project would have a $45 million impact on a five-county area, and the ongoing impact would be approximately $30 million.

"When we build this thing, thousands of semis will be coming with materials," Ziebell indicated.

He said the company was attracted to Madison because of the people, but the Opportunity Zone designation was also a key factor. That designation by the U.S. Department of Treasury, which was announced by the GOED last fall, enables investors to reinvest capital gains in local projects without paying taxes on that income for 10 years.

"It opens up a whole new opportunity for investment," Ziebell reported.

He said that major buyers like Costco and Walmart have already indicated an interest in the shrimp that will be produced by tru Shrimp.

"We are gaining the attention of the world," he said.

Knochenmus said the announcement created a landmark day for the company, for the city of Madison and for the state of South Dakota. He commended Daugaard and the GOED for their work in courting the company.

"One of the things that have brought us to the state is the leadership," Knochenmus indicated.

He thanked the entities which have been involved, including Heartland and the Lake Area Improvement Corporation, for their vision. He also talked about the way the company's values are aligned with that of local leaders.

"I'd like to thank God for increasing this vision," he said. "It's an honor to be part of His vision for feeding the world."

Knochenmus also talked about memorable moments which led to the development of the harbor, beginning with a trip to Ecuador where he looked at the shrimp farms there. At the time, he thought there was a better way to produce shrimp.

"We have found a better way," Knochenmus said. "We've looked very hard at commercializing this technology."

He said the company hopes to expand to 40 harbors and described an early celebration after they had successfully raised their first shrimp.

"In celebrating, we ate them together," he reported. "We actually converted a vegetarian that night."

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