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How Indiana Landed Wal-Mart's first milk processing facility

How Indiana Landed Wal-Mart's first milk processing facility
Hoosier leader says capturing the business is a big win for Indiana agriculture.

Wal-Mart made it official just a few days ago. The food retail giant will build a 250,000 square foot milk processing facility in Indiana. The plant will be located in Allen County just south of Ft. Wayne.

Related: Bloomberg: Dean faces new challenges as Wal-Mart gets into milk business

Not surprisingly, Ted McKinney labeled the day of the announcement a great day for Indiana agriculture. He said it was also an indication that the state’s diary strategy for the future outlined just over a year ago is working.

MORE MILK TO STAY HOME: Road improvements in northeast Indiana made through the Major Moves program over the past few years were appealing to Wal-Mart officials, Ted McKinney notes. (Photo: Justin Sullivan/Getty Images)

McKinney is the director of the Indiana State Department of Agriculture. He is also the ag business representative who works with the Indiana Economic Development Council. He credits action taken by the IEDC and by the Allen County Economic Development Council as being crucial to help seal the deal and bring the plant to Indiana.

Here is an exclusive interview with McKinney.

IPF: How long has this project been in the works behind the scenes?

McKinney: The IEDC and ISDA have been involved for a few months, along with the local economic development folks in that area. Wal-Mart has apparently been working on this project for a year or so. They made many trips to Indiana, some of which we knew about and some of which we didn’t know about.

Why is this important for Wal-Mart?

McKinney: This is the first diary processing plant which they will own in the U.S. Up until recently, they contracted food products made for them by other sources, but they are apparently changing that strategy.  

Did they look at other states?

McKinney: Yes. They shared with us that they also looked at Ohio and Michigan.

Why do you think they chose Indiana?

McKinney: They said they had three criteria: 1) close proximity to ample quantities of Class A milk; 2) a favorable business climate; and 3) good infrastructure to move bulk milk in and bottled milk out of the facility to their distribution points. They also shared that they have worked with Indiana before, and that Hoosier Hospitality is real and important to them.

What is the timeline on the plant?

McKinney: Groundbreaking should happen this spring. The plant is scheduled to be completed sometime in 2017.

What does this mean in terms of jobs for Hoosiers?

McKinney:  It is expected to create 200 jobs, mostly fairly good paying jobs. About two-thirds of them will be in plant operations, and about one-third in transportation.

What is their distribution plan?

McKinney: They will serve 600 Wal-Mart and Sam’s Club stores in Indiana, Ohio and northern Kentucky. The plant will bottle Great Value brand white milk in whole, 2%,1% and skim versions, and 1% fat chocolate milk.

What concessions were made at the state level to land the plant?

McKinney: IEDC will authorize $850,000 in tax credits to Wal-Mart. In addition, Wal-Mart will be eligible for $2.9 million in tax relief under the Hoosier Business Investment Tax Credit program. However, these credits won’t happen until jobs are created and workers are hired. Allen County also offered its’ own package of concessions to Wal-Mart.

How does this fit with Indiana’s strategy for economic development in agriculture?

McKinney: Within the past couple of years an Indiana Ag Dairy Strategy was formulated to keep more milk produced in Indiana in the state, and to attract value-added jobs. Wal-Mart officilas told us one thing that got their attention was a report related to that strategy. It noted that a very large amount of milk is shipped out of the state as fluid milk due to a lack of processing facilities. We believe that helped spark their interest in looking closer at Indiana as the location for their new plant.

What can we expect in the future?

McKinney: I’m hopeful that this dairy strategy will result in more major announcements, perhaps even yet this year.

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