City firm gets state funds

By Diane Graff of the Daily Times staff
Thursday, September 18, 2008 12:28 PM CDT

Gov. Jim Doyle stopped in Watertown this morning to announce eight state awards totaling $16.415 million that will be used to construct freight rail-related facilities and preserve and upgrade rail infrastructure as part of overall efforts to support job growth and Wisconsin's agricultural economy. One of the projects is in Watertown.

“This is the kind of business that makes Wisconsin run,” Doyle said to the employees and staff of Specialty Ingredients, LLC located at 546 West St.

“Obviously, other businesses will prosper” with the additional rail spur to be constructed at the facility, the governor said.

Doyle presented the company with a $737,700 award to build a rail track and facility to more efficiently transport ethanol and other products.

“Freight rail plays a critical role in Wisconsin's transportation system, moving 150 million tons of commodities every year, driving economic growth and strengthening our agricultural economy,” Doyle said. “The grants and loans I am announcing today will develop our freight rail capabilities and allow great companies like Specialty Ingredients to retain jobs and grow right here in Wisconsin.”

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Specialty Ingredients received the $737,700 loan from the Wisconsin Department of Transportation through the Freight Railroad Infrastructure Improvement Program (FRIIP).

The funds will allow Specialty Ingredients to construct a double spur track with a loadout facility, which will increase capacity for transferring products between rail cars and trucks.

“This is our way of helping businesses upgrade rail across Wisconsin,” Doyle said. “This will help a lot of other businesses in the region,” he added.

Specialty Ingredients began operations in the 1960s as a liquid sugar plant. It was started by Aunt Nellies, now Seneca Foods, for the canning industry. In the early 1970s, the company expanded to include high fructose corn syrup products and in the early 1980s underwent another addition for the soda industry.

The company is planning another expansion and the rail service will reduce the number of trucks on state highways and create savings in shipping costs for items including bentonite, ethanol, corn meal, dry distillers grain, sugar, salt and cement.

The additional rail spur will be about 1,320 feet, according to President Mark Smith. “We need more rail service,” Smith said. The construction project will begin in about eight weeks and be operational 60 to 90 days later, he said.

The final path of the spur has not yet been determined. One option for the spur, to be located outside the facility, would be on the west side of the building and proceed to the east or start on the east and proceed south.

This is the first time the company has received funding from the state, Smith said. The change in the industry dictates the need for more rail service, he added.

“We appreciate the state of Wisconsin support,” Smith said. He also recognized the long-time employees of the facility, the city of Watertown represented by Mayor Ron Krueger and the Canadian Pacific railroad represented by Jeff Johnson, manager of municipal affairs.

The company is known for liquefying sugar that is used in ice cream and in the canning industry.

The company has diversified its products over the years, from liquid sugar to salt and cement, plant manager Lonnie Schuett said. “It is a huge juggling act to get cars in here with the new products,” he said. The new product lines will include distiller grains from the Renew Energy, the ethanol plant located near Jefferson, flour and white cement.

Schuett provided the governor a tour of the facility, explaining how the rail cars enter the plant to unload the sugar. The company supplies products to businesses in Wisconsin, northern Illinois and Upper Michigan.

The Specialty Ingredients award is among the five awards totaling $6,687,193 issued through the revolving loan program. As FRIIP loans are repaid, the dollars are used to help fund new projects.

In addition, the governor announced three Freight Railroad Preservation Program (FRPP) awards totaling $9,728,389. A grant program, FRPP awards cover up to 80 percent of the cost of projects designed to preserve rail service or rehabilitate fixed facilities on publicly owned rail lines. Award recipients provide the 20 percent local share.

Other Freight Rail Infrastructure Improvement Program Loans recipients included:

- River Valley Energy, Beaver Dam: A $3 million loan is approved to construct rail yard facilities, and grain ethanol loading and receiving facilities at a new ethanol production facility being developed at Prairie du Chien. Shipping by rail is necessary to the viability of the ethanol facility. The facility will increase the market for Wisconsin corn and enhance the state farming economy.

- United Cooperative, Beaver Dam: A $2,014,141 loan will be provided to fund construction of 3,981 feet of mainline and spur tracks and a grain storage bin at United's facility in Rock Springs. Wisconsin & Southern Railroad serves this facility on right of way owned by the Union Pacific Railroad Company by agreement.

- Badger Grain, Darien: With a $911,000 loan, Badger Grain will construct a new 600,000-bushel capacity grain storage bin at its Darien facility. The new bin will reduce spoilage of grain currently stored on the ground.

- Glacier State Distribution Services, Inc., Kenosha: A $26,352 loan will allow Glacier State Distribution to construct a concrete loading platform at the Union Pacific railroad yard in Altoona and another concrete loading platform adjacent to a Wisconsin Central rail siding in Mosinee.

The Freight Railroad Preservation Program Grant recipients included Wisconsin West Rail Transit Authority, Bloomer, $2,098,125; Wisconsin & Southern Railroad Co., Milwaukee, $4,781,064 to complete Phase II rehabilitation work on the Hartford to Horicon rail line in Washington and Dodge counties; and Wisconsin & Southern Railroad Co., Milwaukee, $2,849,200 to implement Phase I of the Madison to Milton Junction rehabilitation project.