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Tuffy's expansion in Perham has $40 million price tag

Tuffy’s Pet Foods is planning to build a new factory, a major project that is likely to exceed every other construction project ever completed in Perham, in terms of cost.

With an estimated $40 million price tag, “this is the biggest construction project we’ve seen in Perham,” according to the city’s Economic Development Authority Director, Chuck Johnson. Outdoing even the new hospital and previous expansions at Tuffy’s parent company, KLN Family Brands, “This is going to be the biggest one of all.”

Johnson spoke to city councilors at a meeting Monday, before the council signed off on a development agreement with Tuffy’s. The agreement includes tax increment financing for the project.

In a memo to the council, Johnson laid out the company’s plans for the new factory. It will be approximately 92,000-square-feet, with 45-foot walls and a 110-foot-tall tower on the east end.

It will be built right across the street from the existing Tuffy’s facility, between 2nd and 3rd Streets N.W., behind the Tuffy’s office building. Additional employee parking near the office building is also part of the project plan.

Tuffy’s Manager Jon Ebeling, who was also at Monday’s meeting, said the expansion will serve two primary purposes: it will modernize the plant to meet current production standards, providing the company with more product control and separation, and; it will increase the factory’s capacity from 130,000 tons annually to 200,000 tons.

The current facility will continue to hold the grinding and packaging areas, while the new facility will house three new extruders and a large freezer area to store meat.

Ebeling said new deodorizers are also planned as a part of the project, to help control odors from the plant’s meat operations.

Product will flow back and forth between the new and existing facilities via overhead tubes. Truck traffic in the area is not expected to increase.

The estimated $40 million cost of the facility includes $18 million for construction, and $22 million in equipment.

Despite the high price tag of construction, Otter Tail County has assigned the building an estimated market value of a comparatively low $6.12 million, with annual property taxes of just under $210,000.

When the new factory opens, employment numbers will likely be similar to today. Tuffy’s currently employs about 215 people, according to Johnson’s memo, and is struggling to find workers. As such, the company may utilize additional automation in the future, affecting how many new employees might be hired.

The company is expected to break ground on the new factory as soon as possible.

"You'll see some dirt moving pretty quick," said Ebeling.

It should be up and running in about one year.

“Tuffy’s has been a valued employer in Perham since the 1970s, and this new production facility assures this presence will continue for many years to come,” said Johnson.

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