www.prairiebizmag.com

It’s happeningat Raven

pg.18

H2O versusenergy

pg.40

MinotBREAKthru

pg.48

$$ports are a gold mine

Sports play a majorrole in the economy

pg.40

RECRUITMENT•RETENTION ~RESULTSDIV I S ION OF VOCAT IONAL REHABI L I TAT ION

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4 October 2010

Volume 11 No. 10CONTENTS

Cover Story: Sports are a gold mineSports have a major role in the economy of communities in our region throughinfrastructure, branding, and reaching sports enthusiasts. By Alan Van Ormer

IN THIS ISSUE

26

6 From the Editor’s Desk8 Women in Business8 Matthew Mohr

10 Prairie News14 Prairie People16Question/Answer:

Sen. Dorgan

52 Viewpoint54 By the Numbers

Company Profile:Raven IndustriesChange is happening in a majorSioux Falls company. By Alan Van Ormer

Community Profile:Willmar, MNWillmar is a regional hub incentral Minnesota and hopes toreach out to more than 3 millionpeople within a two-hour drivingdistance. By Alan Van Ormer

18

34

NEXT MONTH ON THE AIRCheck out our November issue and find out what a couple ofcommunities in the western Dakotas are doing to improve astandard of living, learn how a shovel-ready program helped aMinnesota community build a business park, and understandhow two research corridors are growing driving an economy. It isall about rural and economic development.

Join Prairie Business magazine Editor Alan Van Ormer and hostMerrill Piepkorn on Wednesday, Oct. 6 at 3 p.m. on any PrairiePublic radio station to hear more about the October cover storyon the major role that sports plays in our economy. To listen toPrairie Public, visit www.prairiepublic.org/radio/hear-it-now.

A winning formulaThe company has achieved success with a

winning combination of a good product, an

excellent reputation and employees who

pay attention to detail.

- By Dee Goerge

Shaping ND energyEmPower North Dakota’s goal is to be

creative thinkers for North Dakota energy.

- By Jesse Bradley

Bountiful harvest expectedIf there is a very good crop, farmers and

rural areas could see money in their pockets

this winter.

- By Alan Van Ormer

BREAKthru in MinotThe 2010 North Dakota Governor’s Rural

Community Summit not only provided

community economic development leaders

around the state an opportunity to

network, but, it also provided a chance to

educate these same economic

development leaders.

- By Alan Van Ormer

H2O versus energyAs the demand for energy increases, water

becomes an important part of the equation.

- By Alan Van Ormer

Blowing in the WindFor each 10 wind turbines constructed in

South Dakota, there will be one job. This is

one form of economic development in a

sparsely populated state.

- By Alan Van Ormer

Nice option for moving oilThough they may lack the efficiency of a

pipeline, railroad systems have become the

next best option for moving large amounts

of oil between regions.

- By Maxine Herr

22

24

39

48

40

44

46

Almost 50 years ago, Basin Electric began its service

to rural America as our membership developed the

hydroelectric and lignite projects that are the bedrock

of the Midwest’s energy foundation. Today, we build on

that strong legacy, diversifying our energy portfolio to

include wind, natural gas and zero-emissions waste heat.

These green projects represent a capital investment

of more than $1 billion in renewable resources.

By 2011, we’ll have wind and green generation throughout

North Dakota, South Dakota, Minnesota, Montana and

51%/ %!+# /3 !3-+/77'( )/0/)!+" 1& 41.' +#/3 86* 2$ ,

enough to power more than 262,500 homes on an annual

average basis. Why? Because we believe being green

is more than a catchy phrase. It has to be.

6 October 2010

Mike Jacobs, PublisherAlan Van Ormer, EditorScott Deutsch, Sales ManagerTina Chisholm, Production ManagerJen Braaten, Marketing CoordinatorBeth Bohlman, Circulation ManagerKris Wolff, Layout Design, Ad Design

NNAATTIIOONNAALL AACCCCOOUUNNTT SSAALLEESS//SSAALLEESS MMAANNAAGGEERR::Scott Deutsch 701.232.8893

Grand Forks/Fargo/Moorhead/northwestern MNSSAALLEESS::

Brad Boyd 800.641.0683Bismarck-Mandan/ west central ND/north central SD

John Fetsch 701.232.8893Fargo/Moorhead/eastern ND/western MN

Jeff Hanson 605.212.6852Sioux Falls/southern SD/southern MN

EEDDIITTOORR::Alan Van Ormer 701.232.8893

avanormer@prairiebizmag.comEEddiittoorriiaall AAddvviissoorrss::Ann Reich, North Dakota Bankers Association, Bismarck; Hiram Drache,Historian-In-Residence, Concordia College - Moorhead; James Ferragut, -Fargo,ND; Tom Shorma, President, WCCO Belting - Wahpeton; KarenFroelich, Professor, College of Business Administration, NDSU -Fargo; Bruce Gjovig, Director, Center for Innovation, UND - Grand Forks;Steve Rendahl, Associate Professor, UND School of Communication -Grand Forks; Matthew Mohr, president/CEO, Dacotah Paper Company -Fargo; Julie Fedorchak, Communications Manager, North DakotaDepartment of Commerce - Bismarck, ND; Mary Batcheller - GreaterFargo Moorhead Economic Development Corporation, Fargo, ND;MeganOlson, President/CEO, Watertown (SD) Area Chamber of Commerce

Prairie Business magazine is published monthly by the Grand ForksHerald and Forum Communications Company with offices at 8083rd Ave. S., Ste. 400, Fargo, ND 58103. Qualifying subscriptionsare available free of charge. Back issue quantities are limited andsubject to availability ($2/copy prepaid). The opinions of writersfeatured in Prairie Business are their own. Unsolicited manuscripts,photographs, artwork are encouraged but will not be returnedwithout a self-addressed, stamped envelope.

Subscription requests:Free subscriptions are available online to qualified requestorsat www.prairiebizmag.com.

Address corrections:Prairie Business magazine PO Box 6008 Grand Forks, ND 58206-6008 bbohlman@gfherald.com

Online: www.prairiebizmag.com

On the cover:Regionally, sports are becoming such an important part of the economy that Midcontinent Communications feels it islarge enough to start a sports network that covers all aspectsof local sports.”

An SBA Award Winning Publication

ALAN VAN ORMERFROM THE EDITOR’S DESK

Iremember watching the Dating Game asI was growing up.It was the show that had either a woman

or a man asking different questions to threeothers (of the opposite sex) trying to find theperfect date. The two groups were divided bya curtain so that the one person asking thequestions could not see the other threebehind the curtain. That one person just hadto choose the date based on the answers.It seemed to work then. And it also

seemed to work at the recent 2010 NorthDakota Governor’ Rural CommunitySummit in Minot in August. This Dating Game was a bit different. There

was still a host: in this case, Julie Curtin, partner,Development Counsellors International inDenver, CO, and two bachelors: Paige Webster,Foote Consulting in Phoenix, AZ, and JohnCastro, MaximusAlliance in Dallas, TX. Therewere also a few chuckles from the answers givento the questions asked.But the main difference was that six

North Dakota communities wererepresented to win a date with one of thebachelors. In this case, the date was a dinnerto sit and discuss economic developmentissues for the winning community. Thequestions helped provide an understandingof what each community had to offer andwhat would make a site selector, like the twobachelors, recommend that community tothe groups they work with.It turned out to be a fun time for those

involved and also those watching thereactions to questions and answers. Moreimportantly, from my perspective, it showedme a lot about what these rural communitieshave to offer in the state of North Dakota.These economic development leaders arewell versed in what their communities areand what they could become if the rightsituation occurred.Afterward, both bachelors agreed that

they learned a lot about those sixcommunities that they could bring back tothe groups that they work with that arelooking to expand or start up a newcompany. In fact, one mentioned there wereneat things that he never knew about NorthDakota; not only from the Dating Game, butalso from the two-day conference.

They now know North Dakota’s storyand can pass it along to others.Being it was my first time attending such

a conference in the state, I was alsoimpressed with what all of thesecommunities have to offer. As an editor,there are many communities out there thathave stories to tell. My hope is that I will beable to tell these stories in one form oranother in Prairie Business magazine.The Dating Game was a fun way to get to

know more about those six communities,but it also shows how tough it is forcommunities around North Dakota, SouthDakota, and Minnesota to tell their stories.

Welcome to energyAs you all might know by now, this

October issue is the first one that has pagesthat deal specifically with energy issues. Inthe following pages, you will learn moreabout water and energy around the region,oil and railcars in North Dakota, and windenergy in South Dakota.In the last month or so, our sales

manager, account managers, and myself havetalked to numbers of people associated withthe energy industry to get their thoughts onwhat is out there. It is mind-boggling all ofthe information associated with the energyindustry.Water and energy cannot be without each

other. Where there is an ethanol plant, therehas to be water to help make the ethanol.Where there is a coal-fired plant, there needsto be water to cool the plant. And water isalso needed to help with oil fracking. As youcan imagine, this use of water also puts aburden on other water users. There are issuesand challenges, but it is good to know thateveryone is working together to make itwork.We, at Prairie Business magazine, are

excited about this new opportunity to tell thestories of the energy industry. For us, it isgoing to be a learning experience. We hopethat you will learn more about the energyindustry, just as we are.

The datinggame

Dig harder.

Dig deeper.

Keep digging.

If you own a business, hey,

that’s what you signed up for.

Today, it’s a lot harder.

It’s not business as usual.

It shouldn’t be banking as usual.

At Bremer Bank, we’re ready

to pick up a shovel

and put our backs into it.

Let’s work together.

Let’s take action.

Dig.

Call 1-800-908-BANK or visit Bremer.com.

Member FDIC. ©2010 Bremer Financial Corporation. All rights reserved.

8 October 2010

MATTHEW MOHR

What was your careerpath? I have a degree innursing, but aftergraduating, there were nonursing jobs. I startedworking in a small NorthDakota town doing homehealth consultation. As mychildren grew older, Istarted a restaurant andcatering business. I didthat for 17 years beforeearning my MBA. Whileworking at the HaroldSchafer Leadership Centerat the University of Mary, Istarted an internshipprogram with the ND

Small Business Development Center. When the state director resigned, Itook the position in 2006.

What do you like most about your job? I am amazed at the ingenuitythat North Dakota businesses have, the expansion plans, and theinnovation. That creativity and zeal are contagious. It is inspiring to hearthe stories companies share and the plans they are working on.

What does it mean to be in charge of small business development?SBDC is there to support entrepreneurs. When someone has an idea,SBDC consultants help them refine their plan. A big part of what we do

involves working financing options and preparing businesses to get themoney they need to operate. The ND SBDC is one of 63 nationallyaccredited programs, and is based at the University of North Dakotasince 1986. My role is to support the regional offices and maintain theintegrity of the program.

What impact do the centers have on the region?Currently, there are ninefull-time centers and two satellites. We will be adding 11 satellites in 2011. Lastyear, our clients realized $83 million in funded projects, worked with morethan 1,200 clients and spent more than 9,000 hours of direct one-on-oneconsultation with our clients. We will surpass those metrics in 2010, easily.

What is the fun part of the job? Three things: the clients, the SBDCteam and the diversity. The clients are the reason we exist, and they driveevery initiative I work on. The business consultants are incredibly giftedand experienced. Every area is it own microcosm of activity. I like thebright eyes, big ideas and the diversity I see.

What is the challenging part of the job? Two things: telling the clientsuccess story and the lack of timely business research. When told, I thinkthose stories will encourage others, spur economic development, andprobably inspire more creative innovation. Traditional sources do notprovide industry-specific data quick enough. All businesses need thatinformation to grow. SBDC needs that research to better prepare to helpour clients.

What are some lessons that you have learned? The lesson that helpsme most is surrounding myself with a team that is better than I am;people who are smart and speak their mind. Our success is built on trustand mutual respect, and an atmosphere that fosters growth for everyoneassociated with the SBDC.

BON WIKENHEISER – DIRECTOR, NORTH DAKOTA SMALL BUSINESSDEVELOPMENT CENTERS, BISMARCK, ND

WOMEN IN BUSINESS

Family owned and operated businesses seem to be an endangeredspecies. Working in a family business has unique challenges andmay offer special opportunities for family members.

Allowing a new generation of the family to participate in a businessendeavor can be easy or hard for the older generation used to havingcontrol. Younger family members often come with new ideas andopinions which seem foreign or doomed to fail by the older moreexperienced business owners. As a result of the inherent conflict offamily ownership, along with financial pressure and changing marketconditions, few businesses survive the transition from first to secondgeneration family ownership, and fewer still from second to third.Family ownership by a fourth or fifth or longer line is rare.Most people who have worked in a family owned business will share

tales of experiencing conflict (slammed doors, loud arguments,drug/alcohol abuse) and a host of other family issues arising duringbusiness hours. My story is pretty typical of a family business ownershiptransition, though I hope to make it better for my children than it wasfor me. Being the third generation owner of an enterprise, I have a greatdesire to pass the torch to one of my children, and I have made it clear tomy children that only one will work with me at any particular enterprise.My plan is to treat my children fairly and equitably based on theircontributions and ability. My eventual goal is to help each of mychildren become established, independent, and societal contributors.Moving from the third generation (me) to a fourth (my children) will

not be easy nor is it assured.A great local example of a super successful business transition was

demonstrated when John Runsvold bought the family funeral homefrom his father. According to John, his father, who is still living) neverinterfered with John or John’s plans, and as a result John has had theability to continue a long standing tradition of business success and theirhigh local family reputation. John’s father was unique in his “hands off”approach to the business transition, perhaps because he wasn’t affordedthe same flexibility.Children do not always treat parents with respect during or after

times of transition, I have two business associates who are thirdgeneration owners who have built great enterprises; one doesn’t have aplace for his father in the business, the other insures his father comes intothe office regularly despite the father having substantial disabilitieswhich resulted from a stroke. Both took different approaches to dealingwith their fathers and work, yet both haveexperienced tremendous success.Each family business deals with ownership and

control transitions differently, some successfully,others not. Regardless of how a business transitionis attempted, few succeed and those that do are veryfortunate, but each family must blaze its own path.

Mohr can be reached atmmohr@dacotahpaper.com.

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10 October 2010

PRAIRIE NEWS MOORE ENGINEERING CELEBRATES 50 YEARSMoore Engineering, Inc.

(MEI) celebrated its 50thanniversary with an openhouse highlighting projects,clients, and the employees whohave been key to the firm’simpact on water, municipal,and transportationinfrastructure in the region.Kip and Marshall Moore

founded the company on Sept.1, 1960. Both served in theNorth Dakota National Guardand both pursued civilengineering at North DakotaState University. More than 900 employees have been part of the company since 1960, and thelongevity of the staff has factored in the long-term relationships and reputation of the company.The firm offers professional engineering, management, and consulting services for airports,

geographic information systems, land and site development, municipal, surveying, transportation,water resources, and water and wastewater systems.

RESEARCH FUNDING REACHES $35 MILLION AT SD TECHIn Fiscal Year 2010, researchers with the South Dakota School of Mines and Technology in

Rapid City, SD, were awarded more than $35 million in research and development funding. This isthe highest amount in the history of the university, according to a university press release. Theuniversity received nearly $21 million in FY-2009.University researchers received 91 awards averaging more than $388,000 from federal and state

agencies, corporations, and direct Congressional appropriations. The awards represented 23departments, centers or labs, and were awarded to 47 principal investigators.

MINNESOTA’S FIRST HEALTHCARE HOMES CERTIFIEDThe Minnesota Department of Health has certified the first 11 healthcare homes in regions

around the state.Also known as ‘medical homes’, the facilities offer a team approach to primary care making it

easier for patients to communicate and partner with their care team, according to a MDH pressrelease. Care teams include clinicians, nurses, specialists, pharmacists, care coordinators, andcommunity resources.

MINER COUNTY DEVELOPMENT CORPORATION SELECTED FOR FUNDINGThe Miner County

Development Corporationbroke ground on a new hoteland convention centercomplex recently withassistance from the AmericanRecovery Reinvestment Actfunding through a USDARural Development Businessand Industry loan.The $3.2 million loan is

guaranteed through theMiner County Bank inHoward, SD. The loan is justone of several sources of funding to build the complex in downtown Howard.

NDSU CENTER AWARDED $10.7 MILLIONThe North Dakota State University Center for Visual and Cognitive Neuroscience has received

a five-year, $10.7 million competitive grant renewal from the National Center for ResearchResources, a component of the National Institutes of Health.The grant will allow the university to enhance its research on how the brain processes visual

information, how factors such as attention, individual differences, and emotions affect visualperception and cognition, and how memory and attention work.

(Press releases and photos about business news and events in North Dakota, South Dakotaand western Minnesota can be e-mailed to avanormer@prairiebizmag.com for consideration)

13 STRAIGHT YEARS FORMINNESOTA COLLEGE RANKINGThe University of Minnesota, Crookston

has been recognized as one of the top fourpublic regional colleges in the Midwest in itscategory by the Best Colleges by U. S. NewsMedia Group. It is the 13th consecutive yearfor the distinction, according to a universitypress release.The category consists of 319 public and

private institutions that focus onundergraduate education and offer a range ofdegree programs but grant fewer than 50percent of their degrees in the liberal arts.

ND STUDENTS AWARDED $37,000IN SCHOLARSHIPSMore than 50 North Dakota college-bound

students will receive $37,000 in scholarshipsthrough the North Dakota Dollars forScholars.The partnership between NDDFS and the

Bank of North Dakota, along with ScheelsFoundation, and many donations frombusinesses and individuals throughout thestate, allows the North Dakota State Chapterto offer more scholarship to North Dakotastudents.

DIGI-KEY CORPORATION NAMED‘DISTRIBUTOR OF YEAR’Digi-Key Corporation has been named

Distributor of the Year for active componentsfor 2010 by readers of Elektronik magazine,based in Germany. It is the second straightyear the company has received thisrecognition.Distributors were assessed based on

product portfolio, product availability,delivery, technical expertise and support, andoverall impression.Digi-Key Corporation serves a global

customer base from its 600,000 square footfacility in Thief River Falls, MN.

YOUNG PROFESSIONALSNETWORK RECEIVES GRANTThe Sioux Falls Area Chamber of

Commerce recently received a grant from theSioux Falls Area Community Foundation tobe used for a special project entitled PlugInSioux Falls.The goal is to use social media and

technology to raise a level of civicparticipation, create a conversational networkthat disseminates facts on civic issues, conductopinion polls that will ascertain youngprofessionals opinions, and increase thenumber of 18-40 year old registered voters.

AN OPEN LETTER TO CONGRESSON SUPPORTING THE ECONOMY & JOB GROWTHBY STOPPING A TAX HIKEON DIV IDENDSWe strongly urge Congress to take action to stop an impending tax hike on dividends.Today’s lower tax rates on dividends are good for the economy, consumers, Americanbusinesses, retirees and other investors. But unless Congress acts, this tax rate willsurge at the end of the year—by as much as 164% on dividend income—discouragingjob creation and investment in the recovering U.S. economy.

We agree with Treasury Secretary Geithner, who recently said, “Our job now is aboutgrowth. Now, all the government can do is to make sure we’re providing a bridge tothe recovery. It’s businesses that create jobs; governments don’t create jobs.”

Raising taxes on dividends would starve U.S. companies of the investment capitalrequired to help create much-needed American jobs. We believe that maintaining

lower tax rates on dividends is sound public policy that fosters capital invest-ment. Congress should stop a tax hike on dividends to encourage long-term

investment in our nation’s economy and growth. You can help. Pleasevisit www.defendmydividend.org and make your voice heard.

www.mdu.com

12 October 2010

PRAIRIE NEWS LOCAL MADISON COMPANY MOVING TO NEW HOME (SBS)Secure Banking Solutions will expand into a new location and facility in Madison, SD.SBS offers comprehensive information security consulting and products to community banks.

Acting as a generalcontractor, SBSdesigns and buildssecurity systemsfor the bank. Thecompany willoccupy half of a7,000 square footoffice building,allowing forcontinued growthover the nextseveral years.Secure Banking

Solutions willcreate up to 10jobs and then anadditional 30 positions over the next 2-4 years.

PROGRAM RECRUITS LEADERS FOR HEALTHCARE IN MINNESOTAThe Minnesota Consortium for Advanced Rural Psychology Training, in partnership with

Sanford Health, has actively recruited and prepared students for positions of healthcare leadershipin rural communities for the past four years.The program reaches out to doctor-level psychology residents. All of the program’s graduates

have assumed clinical and leadership roles in rural communities around Minnesota. Thesecommunities include Detroit Lakes and Thief River Falls.

APPAREO SYSTEMS AMONG 500 FASTEST GROWING COMPANIESAppareo Systems has been named to this year’s Inc. Magazine 500 list as one of the 500 fastest

growing privately-held companies in the nation.Appareo is rated 159th with a three-year revenue growth rate of more than 1,700 percent and is

the fastest growing engineering company on the list. Appareo is also the only North Dakotacompany to have made the list.Appareo Systems designs and manufactures electronic, mechanical and software products for

aerospace, defense and transportation applications worldwide.

BEEF VERIFICATION PROGRAM ANNOUNCED Agriculture Commissioner Doug Goehring has announced a

new, voluntary program to help market North Dakota beefdomestically and abroad.The North Dakota State Legislature authorized the start of

the program. Rather than build an entirely new program, theNorth Dakota Department of Agriculture opted for a five-yearcontract with an AgInfoLink. The federally-licensed, Colorado-based company has extensive experience with similar programsin other states.

BANK OF NORTH DAKOTA HAS POSITIVE RATINGStandard & Poor’s Ratings Services recently provided Bank of North Dakota a Counterparty

Credit Rating of A+/Stable/A-1, a rating that reflects the bank’s good capital and strong assetquality, according to Bank of North Dakota press release.The bank’s diverse loan portfolio and strong asset quality is better than those of its comparably

rated peers, according to the release. Standard & Poor’s cites North Dakota’s steadily growingeconomy and the state’s low unemployment as further factors in the stable outlook.

A&B BUSINESS EXPANDSA&B Business, Inc. has acquired the assets of Office Equipment Company, Inc., in Aberdeen,

SD. The company will add 15 new employees and also expand its line of equipment.The company sells office equipment, furniture, and supplies. A&B Business has 16 locations and

services six states with a line of leading manufacturers.

(Press releases and photos about business news and events in North Dakota, South Dakota andwestern Minnesota can be e-mailed to avanormer@prairiebizmag.com for consideration)

MINNESOTA SECONDARYSCHOOLS ADOPT SUSTAINABILITYPRACTICESA first-ever survey has documented a

wide range of sustainability practices at theMinnesota State colleges and universities thatinclude scheduling classes to increase energyefficiency, lowering water consumption,purchasing local foods, composting foodwaste, using nontoxic cleaning products, andreducing carbon emissions. The report establishes a baseline of

sustainability accomplishments and projects.Plans call for the report to be updatedannually. The system can make a significantimpact by improving sustainability ofcampus buildings, which comprise aboutone-third of the state’s square footage.Sustainability experts say buildings typicallyaccount for 40 percent of energy use and 60percent of global warming emissions.The other 10 areas that were assessed are

energy, water, food, recycling and wastemanagement, transportation, landscaping,culture, purchasing, carbon emissions, andacademic programs and research.

INNOVATION EXPO ON OCT. 13The 7th annual Innovation Expo will be

held on Oct. 13 at the Ramkota Hotel andConference Center in Sioux Falls, SD.The event is a combination Inventor’s

Congress and Venture Capital Forum tocelebrate inventors, entrepreneurs, andinvestors who grow new technologies andbusinesses in the region. There will also be anExhibit Hall for entrepreneurs, serviceproviders, and vendors, as well as educationalsessions on various topics.The event features a keynote presentation

entitled: ‘Reality or Hype? SD Universitiesinspire the innovation economy, tradeshowhighlighting new inventions and businesses,and educational sessions and workshops.

GRANTS AWARDED TO IMPROVEND AVIATION INFRASTRUCTUREThe U.S. Department of Transportation

(DOT) has awarded two federal grants toimprove aviation infrastructure in NorthDakota.Jamestown Regional Airport will use a

$742,150 federal grant to expand its terminalbuilding in order to provide adequate spacefor current passengers as well as bring thebuilding into compliance with the Americanswith Disabilities Act.The Park River Municipal Airport

Authority will receive a $934,170 federalgrant to rehabilitate critical infrastructure atPark River WD Skjerven Field.Reconstruction of the runway, taxiway andapron will extend the useful life of the facility.

14 October 2010

PRAIRIE PEOPLE (Please e-mail photos and press release announcements of hirings, promotions, awards and distinctions received by businessleaders in North Dakota, South Dakota and western Minnesota to avanormer@prairiebizmag.com for consideration)

NEW LABOR COMMISSIONER NAMEDTony Weiler has been

selected by North DakotaGovernor John Hoeven tolead the North DakotaDepartment of Labor.Weiler has been an

attorney with the MaringWilliams Law Office inBismarck since 2002. Hisfocus was personal injury,business, and corporate law.Prior to that, he served as ageneral practice attorney withthe Wheeler Wolf Law Firm inBismarck and worked as alabor standards inspectorwith the State Labor Department.Weiler replaces Lisa Fair McEvers, who was appointed by Hoeven in

May to serve on the East Central Judicial District Court, chambered inFargo.

STATE RETAILERS EXECUTIVE NAMED NATIONAL RETAILCOUNCIL CHAIRShawn Lyons, executive director of the South Dakota Retailers

Association, has been electedchair of the Council of StateRetail Associations during itsannual meeting earlier thisyear.The Council of State Retail

Associations’ mission is toimprove and advance theretail industry with the helpof state retail associationsaround the nation. TheCouncil acts as a forum fordiscussion of issues ofconcern on state legislationand regulations affecting theretail industry.

SCHABEL JOINS ENTERPRISE MINNESOTA BOARD OFDIRECTORSTom Schabel, president

and CEO of AlexandriaExtrusion Company inAlexandria, MN, has joinedthe Enterprise MinnesotaBoard of Directors.Schabel also sits on the

Board of Directors for theAluminum ExtrudersCouncil, and the Board ofDirectors for the MinnesotaChamber of Commerce.Enterprise Minnesota

works with small andmedium size manufacturingcompanies to improveefficiencies, contain costs, andachieve growth in salesrevenue and earnings.

BANK PROMOTES MASTRUDGreg Mastrud was recently

promoted to Fargo MarketPresident for FirstInternational Bank and Trust.Mastrud has been part of

the banking industry for 20years, including the last sevenwith First International Bankand Trust. In his new role asFargo Market President, hewill be responsible foroverseeing and managing theexisting four local officesalong with expected futuregrowth.

NELSON ELECTED TO ULTEIG BOARD OF DIRECTORSAssociate Vice President

Kevin Nelson has been electedto the Ulteig Board ofDirectors. He will serve athree-year term and helpguide the company-widedecisions in the growingorganization.Nelson is an associate vice

president in Ulteig’s Bismarckoffice. He has more than 20years of engineeringexperience, including thedesign and management ofairport, municipal, and landdevelopment projects. He hasspecialized in nurturing thegrowth and development ofUlteig’s aviation practicethroughout the Midwest.

WILLISTON NAMES DEAN FOR INSTRUCTION ANDDISTANCE EDUCATIONDr. Pamela J. Gardner has

been named as the foundingDean for Instruction andDistance Education atWilliston State College inWilliston, ND.Dr. Gardner played an

integral role in the transitionto new role assignments andCarnegie designations of twohigher-education institutionsin Utah. Under her leadership,enrollments exhibitedsignificant growth providingadditional opportunities forstudents to expand theircareer and educationalchoices, according to a WSCnews release. She has writtenand acquired more than $10million in grants andappropriations at her previous Utah University.

Discoveringnewworlds

When good ideas start spinning, other ideas often take flight. These ideas canchange the landscape and our lives. Or both.

At Sanford Health, we believe in ideas. That’s why we are building children’sclinics in underserved places. That’s why we are performing maternal fetalsurgery. That’s why we are pursuing cures to Type I Diabetes and BattenDisease. Ideas like these could impact lives for generations. It’s why peoplearound here see us as today’s pioneers.

This is Sanford Health.

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16 October 2010

North Dakota Sen. Byron Dorgan hasmade it one of his goals to help theRed River Valley Research Corridor

continue to prosper.In December 2002, Sen. Dorgan met with

North Dakota college and university presidentsto outline his vision of the research corridor.The decision was to focus on world class,cutting edge research, and build capacity inareas that would attract new industries andnew jobs. Since 2002, more than $300 millionof funding has been directed to North Dakotato build research centers, support the growinghigh-tech sector, build infrastructure andspecialized facilities, and train skilled workersfor emerging industries.In 2006, North Dakota State University

researcher Dr. Larry Leistritz released aneconomic impact study showing the growth ofthe high-tech industry in North Dakota since2002. According to his report, the initiative hasgenerated $759 million in positive economicimpact and added 10,600 jobs to the regionaleconomy.In October 2008, Sen. Dorgan set a goal of

doubling the Red River Valley ResearchCorridor job impact by 2015, which wouldbring the total number of jobs to 20,000. Alsoin June 2008, a Milken Institute study showedthat the North Dakota research industry is thefastest growing in the nation. The MilkenInstitute is a nationally recognized,independent economic think tank.Before a luncheon in August honoring Sen.

Dorgan, Prairie Business magazine sat downand talked to the Senator about the researchcorridor. The following are excerpts from theinterview.

YOU RECENTLY ANNOUNCEDNEW FUNDING FOR THECORRIDOR. FIRST, HOW DO THESENEW FUNDING PROJECTS FITWITH THE CORRIDOR? The funding I have tried to do each year is

designed to support the programs that are

underway, new programs that have beencreated in recent years, but also additionalprograms and research programs that have thecapability to provide commercialopportunities and therefore attract industryand jobs. I am not interested in having researchbe done just for the sake of research.

HOW WOULD NEW MONIESIMPACT WHAT IS ALREADYGOING ON? It just builds upon it. We are building

centers of excellence in a range of areas andcontinuing to strengthen them. What we havedone in a short period of time is verysignificant.

WHAT HAS BEEN THE MOSTSATISFYING ACCOMPLISHMENT TOYOU? I have had many accomplishments over the

years in the areas of helping family farmers,boosting energy production in North Dakota,strengthening schools and so much more.However, the accomplishment that I think

will have lasting impact on the future of ourstate is one that started with an idea I hadnearly nine years ago to create an energyresearch corridor in North Dakota.I predicted that the effort would both

strengthen our universities and attract newindustries and businesses to our region to co-locate near the world-class research capability,which had already happened in a number ofother areas across the country in a verysuccessful way.During the past eight years, I have steered

nearly $800 million dollars in research fundingto help create the Red River Valley ResearchCorridor. We are now doing world-classresearch in the areas of micro technology, nanotechnology, energy, deep brain research,vaccine research, and much, much more.We have had companies move to North

Dakota to be near that research and we havealso now seen a good number of start-up

companies created in our state as a result ofthis research corridor. In fact, several nationalsources including Inc. Magazine and theNational Science Foundation have identifiedthe Red River Valley Research Corridor as oneof the fastest growing areas of world-classresearch in the United States.I think my work to build the Red River

Valley Research Corridor will have a lastingimpact in our state by keeping our best andbrightest students here in North Dakota wherethey can pursue career ladders andprofessional jobs doing the things we’vepreviously exported them to do in other majorpopulation centers around the country. TheRed River Valley Research Corridor will likelyhave a lasting impact in changing our economyfor the better and I am proud to have created itand steered the funding for it to our state.

WHAT PART IN THE FUTURE WILLYOU PLAY IN THE RESEARCHCORRIDOR? Although, after 30 years not seeking re-

election to Congress, I want to add anotherchapter in my life. I don’t expect to discontinuemy interest in or my work for goals haveestablished here in public service. I believe wehave laid a strong foundation. There is muchyet to build and I hope to be involved.

Q&A:Sen. Dorgan continuesresearch efforts

BYRON DORGAN

By Alan Van Ormer

THE DORGAN FILEName: Byron DorganTitle: United States SenatorU.S. CongressAge: 68Hometown: Regent, N.D18 years in the U. S. Senate (12 more as a member of the U.S. House)

Prairie Business 17

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18 October 2010

On the cover of Raven Industries’ 2010 Annual Report a quote says“Even in a bad economy, you can find good opportunities.”And the leadership group at Raven has done just that by focusing

the efforts of the corporation on the key niche markets they serve. Thosemarkets are precision agriculture, persistent surveillance, and high valueplastic films for barriers and protection.The new President and CEO Dan Rykhus says by doing this we have

been able to return to growth in 2010 and are on a record pace for salesand profits this year. “Five years ago we started to emphasize ourprecision ag business highly. We were able to grow that more rapidly thanthe rest of our divisions,” he explains. “In doing so, it started changingour profile to be more oriented toward proprietary products that wedesigned and manufactured here and sell worldwide.”

Raven Industries hasbeen in Sioux Falls, SDsince the mid 1950s.And during that periodthe company has beensuccessful, but has notreally promoted thosesuccesses, according toRykhus, who took overthe helm as only thecompany’s fourthPresident and CEO onAugust 20th, replacingRonald Moquist.“It is humbling. This

is a tremendouslysuccessful companywith a strong historyand it is humbling toconsider that our boardhas selected me to move

us forward,” he says. “We don’t have to implement a turnaroundprogram. We have an opportunity to keep transforming ourselves to bemore organized around these specific niche market opportunities. Ourchallenges going forward will be in the areas of continued product andservice innovation. Our competitive distinctions today and in the futureare in the technology and value delivered through our products andservices.” Rykhus says a major challenge is developing the team required to take

advantage of these great opportunities. “We are not lacking talent,” hestates. “We have to keep adding to what we already have and keep peoplefocused on opportunities.” Rykhus feels that people deserve to knowabout the successes in this region and in addition, he hopes it will helpwith the challenges growing in attracting talent.“More and more of our employee base are engineers, marketing

professionals, service professionals, managers, supervisors – all theprofessional staff,” he explains. “This building used to be almost allmanufacturing, now it is almost all professional staff.”The change started 10 years ago when the previous CEO, Ron

Moquist started implementing a strategy of pairing down businesses.“We really focused on the business units we felt had a niche that had a lotof upside potential,” Rykhus states.Now, there are 1,050 employees; with nearly 50 percent of those

employees being professional staff. The main office is in Sioux Falls, butthere are also branch offices located in Austin, TX and St. Louis, MO;manufacturing locations in Madison and Huron, SD; as well as sales andservice employees in locations around the world.Challenges involved with competing on low cost in a global

marketplace brought about change. The company decided to distinguishitself through product design, system design, the service around thoseproducts, and the distribution channels put in place, rather than tryingto be the low cost producer.“We’ll never be the lowest cost producer. Low cost labor in Asia and

other parts of the world will win that battle. We can’t compete solely onprices,” Rykhus explains. “We can do well domestically, but it isn’t only a

By Alan Van Ormer

Change happening

Dan Rykhus, President and CEO

(continued on page 20)

COMPANY PROFILE - RAVEN INDUSTRIES

Cab shot of field computer EnvizioProTM. (Photos courtesy of Raven Industries)

Prairie Business 19

20 October 2010

COMPANY PROFILE - RAVEN INDUSTRIES

BOTTOM LINE: Headquarters: Sioux Falls, SDFounded: 1956Employees: 1,050One the web: www.ravenind.com

domestic challenge anymore. It is a global challenge. We believe verystrongly that we have to be competitively differentiated based on ourdesign, our quality, and our service we wrap around our products.” One business division the company is building its future on is the

Applied Technology Division, which serves the precision agriculturemarket. This is a $100 million division that Rykhus states hastremendous upside.“It has over a 1 billion dollar current annual marketplace. We have

our share to take. It is a growing market,” he states. “When you look atthe challenge we face in this world, we have more than 6 billion peopleon the planet. The projections are for global population to grow toaround 9.5 billion in the next 40 years. We don’t have lots of additionalacres to grow food on and we are also losing acres to urbanization.”Rykhus states the challenge for the world is to grow more food off the

same number of acres to feed a world population that is not onlygrowing; but is increasing its dietary expectations.Precision ag products are helping the farmer by allowing them to

optimize the fertilizers they put on the acres, to keep records of the causeand effect relationship between what input they choose to put on an acre;the seed, the fertilizer, the herbicide, the tillage practices, and then whatthe outcome is in that yield.“Our products help them optimize that combination of input costs

and output.” Another business division the company is counting on is theAerostar Division. This business serves the persistence surveillancemarket with a range of aerostats and other lighter than air products.According to Lon Stroschein, Division Vice President, in charge of

Aerostar, this part of Raven holds the core business that the companywas founded on in the mid-1950s. Two years ago Raven made a strategic decision to manufacture a

25,000 cubic foot aerostat that has a tetherline with fiber opticcommunications between the ground control station and the variouscameras, sensors and other communication equipment suspended fromthe aerostat. “The Department of Defense is looking for something that provides

protection for the forward operating bases in Afghanistan,” explainsStroschein, adding that DOD had been using helicopters.Persistence surveillance provides a lesser price tag, according to

Stroschein. To date, Raven has delivered 14 systems to the Office of theSecretary of Defense for security operations in Afghanistan.A third strong division involves multi-layer barrier film. “Our

Engineered Films Division is growing very fast again this year, serving theagriculture, energy exploration, construction, and geomembranemarkets,” says Rykhus. “The way we are going to grow this division goingforward is through expansion in the multi layered films markets. Thesehigh value films combine various layers of films with properties thatprovide protection from UV, Radon, Methane, Oxygen, and other gases.”Additional layers are used to provide the right thickness and texture

for the application. It is estimated that only about 10 percent of the

company’s capacity can produce those films used in various applicationsincluding landfill liners and covers. Raven has made an $8 millioninvestment in capacity expansion over the next 12 months to triplecapacity for the manufacture of these high value multi layer films.Raven Industries faces challenges and the challenges are different in

each of the company’s different marketplaces.“When you look at precision ag, we are realizing great growth

internationally,” says Rykhus. “But the international challenge is tocustomize the product and service to be appropriate and effective in thedifferent international market places, as well as build distributionchannels and partners in the international market.”Another challenge is attracting technical and engineering talent into

the design effort for our precision ag product line. The company pullsheavily from South Dakota State University in Brookings, SD, and theSouth Dakota School of Mines and Technology in Rapid City, SD.

“We work hard at recruiting,” explains Rykhus. “One of our long-term goals is to continue to refine ourselves such that we are theemployer of choice for technical talent and professional staff that areinterested in the kinds of jobs that we offer. I recognize it is a multiyearimprovement effort that we are going through. Part of it is making ourstory known and continuing to provide challenging opportunities forour employees in an environment of trust and respect.” A part of Raven’s success throughout the years stems from being a

conservative company and not carrying debt. “We have a very strongbalance sheet that allows us to make an acquisition when we need to andto invest in our growth opportunities while returning a strong dividendyield to our shareholders” states Rykhus. “The challenge going forward isto continue to grow our revenues.” Raven’s investment in facilities and capital equipment will be around

$15 million this year, compared to $3.3 million in 2009.The company ispreparing for a similar level of investment in capital equipment andfacilities in 2011. In addition, the research and development spending hasincreased by over 40% this year over 2009 and all of these investments arebeing focused on the great opportunities Raven sees in this difficult,general economy.Raven considers itself a growth company and the goal each year is 10

percent. “We are prepared for it. We are ready financially,” explainsRykhus. “There are opportunities in the region.”

(continued from page 18) Dave Schwalm working on GPS field computer.

Aerostats are designed and manufactured in Sioux Falls.

Prairie Business 21

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Other than a baseball bat protrudingfrom the building, the business

MaxBat blends in without notice in Brooten,MN, a small farming community. Located twohours from the Twin Cities, storefront traffic islimited, but that is more than offset by Internettraffic and word-of-mouth advertising bysatisfied minor and major league baseballplayers and amateur league managers. Whilethe bats may not be as well known as theLouisville Slugger, MaxBat is the largestInternet retailer of bats direct from amanufacturer (Glacial Wood Products).On April 12, Jason Kubel hit the first

homerun in the new Target Field with a sugarmaple MaxBat. It’s just one of many firsts for acompany that has achieved success with awinning combination of a good product, an

excellent reputation and employees whopay attention to detail.

WINNING TEAMDick Johnson started Glacial Wood

Products (GWP) in 1991 in Starbuck, MN, andthe largest N.A. custom wood turning businessfor large cabinet manufacturers soon outgrewits location. An old school ag shop in Brootenmet their needs so the business moved in 1996. The business was growing and planning to

move to a larger facility when Jim Andersonapproached them about manufacturing bats. “We liked his logo, and he seemed

knowledgeable about marketing,” says PaulJohnson, Dick’s son, and MaxBat VP andproduction manager. Johnson also programsand works the CNC lathe to turn the bats. The family business had previous

experience making bats and had beencontemplating designing their own line. Theymoved GWP into a new facility, and MaxBatmoved into the old building.“It’s been good,” Johnson says. “The bats

have gained a little notoriety for Glacial WoodProducts.”There’s new exposure for the GWP-made

product every time a major league player’sphoto is taken with a MaxBat bat. AmongMaxBat fans are Doug Mientkiewicz, the firstto use a MaxBat bat, Jimmy Rollins of thePhiladelphia Phillies and Twins playersincluding Joe Mauer and Kubel.Several articles have been written because

of the bat’s story. Anderson, a Wahpeton, ND, native and

Minnesota State University Moorhead designmajor enjoyed woodworking, and he made abat to commemorate his son’s birth. After helost his job as a traveling salesman after 9-11,he wanted a job closer to home. “I got the bug to make bats so I got a lathe,”

Anderson says. He made a couple for himself,the first out of ash and the second out ofmaple. “At the time maple was new for a wood

bat,” Anderson explains. “I know maple is abetter wood. It’s got more pop and the bats lastlonger. It just felt better.”Other league players asked him to make

bats for them, and Anderson decided tocontact the MLB officials to see if his bat metregulations. He was surprised when he foundout all he had to do was move the logo aquarter-inch. “I started looking for a partner,” he says.The name Glacial Wood Products came up

repeatedly in his quest. By 2003, the MaxBat(named after Anderson’s son, Max) was inserious production.

THE PROCESSWhether it becomes a bat for a summer

league or a major league player, all MaxBat batsare made of the same quality wood, says JasonSpeidel, in-house sales manager at MaxBat.Maple bats have been their mainstay, and thecompany purchases the best quality roundbillets of rock and sugar maple available, fromNew York and Pennsylvania as well as Canada.The shop is kept at 40 percent humidity tokeep the wood in prime condition.“Bats are traditionally made of ash,” Speidel

explains, “but the maple bat craze started withBarry Bonds when he used a maple bat.” Maple is denser than ash and more

expensive. Maple MaxBat bats average $100. Inaddition to maple, MaxBat makes ash andbirch bats.The process begins at high-tech Italian

CNC lathes. Johnson or another lathe operatorslips in the disk with the computerizedinformation to cut out a specific model. The 2¾-inch- by 36-inch billets are loaded and thelathe peels out a bat starting at the handle. From there the bat moves to a hydraulic

profile sander, which operates on pistons toensure the same amount of pressure sands thebat evenly. Ends are sanded by hand. Weight iscrucial, so each bat is weighed before cuttingoff the end to see if it needs more sanding.After the end is cut off, the bat is weighed againto determine how much to cup the end — upto 3/4 ounces — to get the correct final weight. Sanded bats move to the building next door

where a worker hand paints them withtranslucent dyes. The bats are placed on amoving line, hit with a lacquer in a spraybooth, cured in an infrared oven, sanded byhand, decaled, then sprayed and heated again. Bats go back to the workshop for

computerized laser engraving and shipping.

MARKETING“The biggest challenge of manufacturing

bats is finding an adequate material supply,”Johnson says. “It’s market driven, and we’recompeting against the veneer market for themaple.” He or other managers fly out East acouple of times a year to maintain contact withsuppliers. They travel to sporting good and

MaxBat — A winning formula

By Dee Goerge

22 October 2010

trade shows and take their bats to major leaguespring training in Arizona and Florida.Recently MaxBat has been promoting less

expensive ash and birch bats to grow othermarkets such as minor league teams. Just over20 percent of the bats go to the professionalplayers market in the U.S. and Mexico. The restof the bats are sold to amateur playersworldwide from Italy to Japan. MaxBat expectsto sell about 30,000 bats this year.“A lot of people can make a bat, but we can

get a lot of them quicker,” Johnson says. “Andwe offer far more models. We have way over300 models.”Besides a professional website, MaxBat has

a showroom with a variety of their productsfor clients who fly in from major league teams.It’s also handy for local amateur teams — thereare more than 300 men’s teams in Minnesota. We’ve tried everything including Louisville

Sluggers and we like the pop out of MaxBat,the way the ball comes off the bat,” says KevinHoy, general manager for the MinnetonkaMillers, which have won nine statechampionships since 1997 in the MinnesotaState Class A Amateur League.The team goes through 40-60 bats a

summer in 60 games, and Hoy says MaxBatoffers good service and fast turnaround time.The maple bats are competitively priced withother companies. “If we weren’t pleased with them, we

wouldn’t keep buying from them,” Hoy says.

Goerge is a Parkers Prairie, MN-based freelancewriter. She can be reached atdee_goerge@yahoo.com.

Prairie Business 23

Leaders from nearly every major energycompany in North Dakota meetregularly to share insights and ideas.

They have one common goal: to be creativethinkers for North Dakota energy. In 2007, the Legislature created and Gov.

John Hoeven appointed the EmPower NorthDakota Commission to makerecommendations to enhance the state’sexisting comprehensive energy plan, alsoknown as EmPower ND. The group iscomposed of a 14-member commission whichincludes representatives from all of the state’senergy sectors. “The beauty of what we do at EmPower is

to bring individuals from traditional andrenewable energy together all at the sametable,” Randy Schneider, chairman of theNorth Dakota Ethanol Producers Associationand one of the EmPower members, says. “Ourgoal is simple. We need to create a verycohesive and synchronized energydevelopment plan for the state of NorthDakota based on sound science andeconomics.”Partnerships between traditional energy

industries and the emerging renewableindustries are a central component of NorthDakota’s approach to energy development.This strategy recognizes that meeting ourstate’s and country’s energy needs requires allplayers in the energy industry to be engaged inthe process together.“Historically, each energy sector would

show up at the Capitol with their legislativeagenda every other January and often timesconflict would occur, resulting in less thanperfect legislation for everyone,” Ron Ness,president of the North Dakota PetroleumCouncil and a member on the commission,explains. “Now, these groups are at the sametable on a regular basis, learning andquestioning each other on best practices andhow to work together to deliver better resultsfor North Dakota.”

“One thing we have all learned from theEmPower process is that 90 percent of ourissues are the same. We all need betterinfrastructure, workers, positive businessclimate, and other resources,” Ness adds.The commission conducted work on its

first EmPower ND policy prior to the 2009Legislative session. This provided theframework for policy changes and initiativesthat have helped spur growth throughout thestate’s energy sector. “Almost their entire first set of proposals

and goals were met with success in theLegislature, with bills being passed that weresupported by and endorsed by EmPower,”Todd Porter, a state representative fromMandan, says. “Prior to EmPower they allfought to gain their own ground. Now theyapproach us on a unified plan that has alreadymet the muster of the industry leaders. It takesall the fight out of the process and puts energydevelopment as the goal, not a specificindustry.”“It’s really about educating each other and

then working together to find solutions andproduce results,” Ness adds. “This is a uniqueapproach that could be used for manyindustries to find solutions by bringingtogether the various industry segments thathave more in common than they realize. As aresult of the process, we are all developing amuch better understanding of the core issuesthat each industry needs in order to beprofitable and attract the necessary capital forcontinued growth.”Ness explains the EmPower members have

found common ground on nearly every issueas a result of the education process. CommerceCommissioner Shane Goettle, who chairs thegroup, agrees. “The entire process has helped everyone

work together,” Goettle states. “We have takenan in-depth look at the strengths, weaknessesand opportunities in a number of key sectorsand developed policies to overcome obstacles,

eliminate barriers and encourage growth.EmPower members have fully embraced thisapproach. These are busy business leaderswith demanding schedules, yet they have madethis a priority and that’s ultimately why itworks. ““Everyone who used to have a specific

agenda realizes that going alone or against theEmPower Commission will be unsuccessful,”Porter says. “This has forced everyone to pitchtheir idea prior to a legislative hearing and gainsupport from competitive energy industriesprior to a legislative bill draft and hearing. Thismodel has proven its success and should be theshowcase of how an industry with many facetscan be brought together to produce policiesthat fit a statewide plan.”Because of this approach, energy projects

resulting in significant investments in allsectors of the energy industry are underwayacross the state.From 2006 to 2010, natural gas processing

companies have more than doubled theirability to turn North Dakota’s valuable naturalgas resources into a safe and clean energysource for America. As of May 2010, North Dakota had five

ethanol plants with a rated capacity of 350million gallons of ethanol per year. Wind production capacity is greater than

1,200 megawatts, with another 6,000megawatts in planning.Thirteen natural gas processing plants are

operating in western North Dakota, locatednear Arnegard, Ambrose, Killdeer, Knudson,Lignite, Marmarth, Midway, New Town, Ray,Rhame, Stanley, Tioga, and Trotters.In May 2010, oil production hit an all-time

record high of nearly 291,000 barrels per day.

24 October 2010

EmPower ND14-member Group Helps toShape North Dakota Energy

By Jesse Bradley

At the same time there were 4,905producing wells, another all-time record.The group’s success has not gone

unnoticed. The concept for the NorthDakota Ethanol Council grew out of theEmPower North Dakota Commission. TheNorth Dakota Ethanol Council includesrepresentatives from all of the state’s majorethanol producers, including ADM CornProcessing, Walhalla; Blue Flint Ethanol,Underwood; Hankinson Renewable Energy,Hankinson; Red Trail Energy, LLC,Richardton; and Tharaldson Ethanol,Casselton. EmPower ND Commission members

think people outside of North Dakotashould also take notice. “The nation reallyneeds to look, learn and listen to what wehave done in North Dakota,” Schneiderexplains. “Why we can’t do this on anational level, when the nation needs anational energy policy, is beyond me. Wehave proven that it can be done. NorthDakota is a perfect model for what the folksin Washington D.C. should be doing.”

Bradley is a Bismarck-based freelance writer.He can be reached at jb@jessebradley.com.

Prairie Business 25

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26 October 2010

COVER STORY - By Alan Van Ormer

$ports are a gold mineS

ports fans are passionate. They are excitable.They live and die with every play of theirfavorite sports team.

“I don’t think that sports are going away,interest-wise or economically, they’re justchanging,” says Dave Rolling, Assistant Professor ofSport and Recreation Management in theDepartment of Business at the University ofMinnesota, Crookston. Rolling is also involved inconsulting for bid proposals, event management,and contracts. “Different sports industries(recreational, health and fitness, professional) are allthriving financially. Sports products are bothtangible and intangible, and their complexity addsto the mystique and demand which we witnesstoday.”Regionally, the business of sports is creating a

different culture.Midcontinent Communications feels that there

is enough there to launch Midco Sports Network tomore than 230,000 subscribers. JLG Architects hashad a hand in building several new sports facilitiesin the region. And Insight Marketing was involvedin the launching of a new name for what was thenthe Sioux Falls Canaries and has now become theSioux Falls Fighting Pheasants.“The interest is there,” says Sherry Barkley,

Assistant Professor and Department Chair of theHealth, Physical Education, and RecreationDepartment at Augustana College in Sioux Falls, SD.

Dave Rolling, Assistant Professor, Sport and Recreation Management, Department of Business, University ofMinnesota, Crookston

(continued on page 28)

Prairie Business 27

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28 October 2010

“Sports are so big. It is entertainment. It is participation. It is a huge partof our culture. It is just there. It has become so much of what people do.”Rolling adds that businesses are devoting an entire personnel division

to studying sports consumers and incorporating a sports relationship intoits strategic management. “These companies with no official relationshipwith a particular sports property can still adjust their marketing mixes toeffectively reach their target markets through sports,” he says.

MIDCO SPORTS NETWORK REACHING THREE STATESMidco Sports Network is a new all-local sports TV network that will

cover sporting events of colleges, universities, and high schools inMinnesota, North Dakota, and South Dakota. The new network willdeliver local content focused on sporting events that are not typicallytelevised in both standard and high-definition.“I don’t know if it is ground-breaking or earth-shaking, but it is an

idea that has never been tried and supported at this level in this area,”says Tom Nieman, Programming Manager and play-by-play announcerfor live events. “Midcontinent’s ownership saw a way, to not only set thecompany apart from the competition, but add a service and fill a void inthe region. Sports are a big part of a lot of people’s lives and Midco’sleaders recognized that this endeavor could be valuable to the customersand the company.”The impact the network will have will not be known at this point, but

Nieman believes Midco Sports Network can have a positive influence indifferent areas. “Colleges can show themselves off to prospectivestudents. A local golf show can not only bring new players into the foldbut can be an economic and PR spark for the company producing theshow and the sponsors that support it,” explains Nieman. “Smaller, localentities like the high schools or junior football or youth soccer could gaina boost in support when advertisers realize that there are a lot of eyes onthe little guys and not just on the pros.”

BEMIDJI LOVES ITS HOCKEYEnthusiastic hockey fans are abound in Bemidji, MN, especially after

the school went Division I and also are set to open a new arena thisseason. You cannot get a single game ticket to the season opener againstthe University of North Dakota unless you purchase season tickets to thenew $65 million, hockey arena. In addition, there are 25 suites in thefacility and all 25 are sold out for five years.If that isn’t enough, the Beavers end the hockey season against the

University of Minnesota. UND and the University of Minnesota are bigopponents for Bemidji State. 'The economy of sports is huge for

Bemidji,” states Dr. Rick Goeb, Director ofAthletics for the school that has 5,000students. “Selling out 25 suites in thebuilding for a five year commitment showsthe interest and the excitement thiscommunity has for hockey.”Now that the hockey team has moved

into a new facility, the old facility is beingrenovated to benefit all of the sportsprograms on campus.Bemidji State University has 400

student-athletes participating in 15Division II sports associated with theNorthern Sun Collegiate Conference andtwo Division I sports associated with theWestern Collegiate Hockey Association.Many consider the WCHA the mostcompetitive league in hockey. Women’shockey has played Division I hockey for 10years. The men’s program is skating into itsinaugural season in Division I.“Sports provide entertainment value,”

says Goeb, adding that the university, along with the local hospital, arethe largest employers in Bemidji. “The value is appreciated by thecommunity, the students, and those that come in from surrounding areasto see the games and participate in activities.”

HELPING REBRAND A BASEBALL TEAMInsight Marketing Design was involved in the launching of the Sioux

Falls Fighting Pheasants including the new logo and uniforms. It alsoincluded coming up with a new mascot ‘Ringer.’ The new brand waslaunched on Feb. 17.Candy Van Dam, Client Service Director and Partner at Insight

Marketing Design in Sioux Falls, says branding is important for any typeof business. “For a sports franchise, it is the hook, the personality that isgoing to build their connection with the fan base,” she states. “They aredevoted fans.”Insight Marketing Design does not have a history of branding for

sports franchises, but Van Dam states the company has worked withmany companies in rebranding them and used that experience to helpwith the Fighting Pheasants branding.“Branding helps develop that fan base that keeps those fans buying

season tickets, following their team in a newspaper, on TV, on Twitter, onFace book, as well as going to the games,” Van Dam explains. “Sportsmarketing is a business. If done well it is a profitable business. Brandingis the most important component in launching a new entity.”

(continued from page 26)

(continued on page 30)

(Photo courtesy of Insight Marketing Design)

(Photo courtesy of Insight Marketing Design)

Prairie Business 29

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As well as professional branding, high school and college brandingalso creates a fan base and fan loyalty. “People like to be part ofsomething,” Van Dam says. “And that is part of the sports marketingaura, it creates something you can be part of.” Sports itself is a bigbusiness. In Sioux Falls, along with the Fighting Pheasants baseball team,there is the Stampede hockey team, Storm football team, and theSkyforce basketball team, as well as several college and high schoolsquads.“People are loyal to their brand,” Van Dam says. “Sports teams are

something that people follow so closely.” Because the business of sports is so huge, last year, Augustana College

implemented a sports administration and leadership program as amaster’s program to go along with its sports monument undergraduateclasses.Barkley says that there are just so many aspects about sports and

sports management that the college needed to pursue other programs. “We think we have developed a program that is flexible,” says Barkley.The Masters program will prepare individuals for leadership roles in

sports-related professions.

FACILITIES ALSO PLAY A LARGE PART IN THEECONOMY OF SPORTSIn the last 10 years, JLG Architects has seen and been involved with

designing a fairly large number of sports facilities in the Dakotas andMinnesota, says Randy Lieberg, AIA, JLG Architects. “Traditionally, theDakotas have been home to more community and youth-based athletics.You will see an occasional larger facility for collegiate activities, but themajority have been high school gymnasiums, community hockey rinks,and some outdoor football stadiums,” he explains. “The trends toward ahealthy lifestyle, however, have driven larger scale fitness centers in boththe community and higher education areas, and even into the highschools. Colleges are seeing the importance of revenue generation fromsporting events, which helps justify and fund much larger facilities withall of the amenities for fans and athletes.”The economics of facilities are huge. “Owners and operators are

understanding the idea of cash flow and revenue generation and gettingmuch more sophisticated when researching options and studyingdifferent scenarios,” Lieberg says. “Existing buildings are expanding andadding premium seating, team stores, club areas which bring in morerevenue. It never used to be that way. Now facility managers are takingcues from professional-level operations and incorporating those revenuesources all the way down to park board level buildings.”Sports-specific buildings are becoming more common. However,

Lieberg states that JLG is finding that many owners are depending onmultiple uses to keep these large arenas running all year round. “We areasked to design the ability for hockey one night, basketball the next, aconcert over the weekend, and a week-long trade show after that,” he

explains. “Operators are much savvier in terms of change-over costs andthe best way to use the buildings on non-sports days. It is no longer amatter of a “build it and they will come” mentality.”Anything that can draw revenue will be huge in the future, according

to Lieberg. This could include special club areas, advertising space, andsponsored spaces within the stadium. “Also, there is maximizingefficiency and turnover for multiple events,” he adds. “There is a race forthe biggest and best in video screen and scoreboard technology as well.Texas Stadium is the most visible example of that. Specialized conversiontechniques, such as sports floors moving and storing, seating sectionswith the ability to change configuration, big ticket items that change thespace in big ways are probably one thing.”In Fargo, the FargoDome is just the type of facility that hosts much

more than sporting events. However, when it comes to sporting eventsand especially North Dakota State University football, the FargoDomecan hold nearly 19,000 folks. In addition, the venue hosts up to threestate high school tournaments that could include football, wrestling andbasketball, as well as USA wrestling during the summer and Minnesotaand North Dakota High School football games and playoffs during thewinter months.Rob Sobolik, general manager for the FargoDome, says that a study

conducted a few years ago and if adjusted for the 2010 season, one Bisonfootball game would provide approximately $72 per person in totaleconomic impact. If 15,000 people attend a Bison game, this would meanclose to $1 million of revenue generated from that one football contest.For all events at the FargoDome, Sobolik estimates there is a $25

million to $30 million annual economic impact. He also suggests that aslittle as one third or as much as two-thirds could be attributed tosporting events.“Sports have a built in audience. With Bison football or other

sporting teams who have a loyal fan base, they are going to every homegame,” Sobolik explains. “As the team does better, you have people thatwant to be involved.”Sobolik says the FargoDome itself is important to the community.

Without it there would not be the 19,000 capacity for a Bison footballgame. Without it, there may not be the state football championships,which would be spread out around the state. Without it, USA wrestlingwouldn’t have a venue. Without it, Minnesota sectional and otherfootball games would not be played in Fargo.The more people in the FargoDome, the better for the Fargo-

Moorhead area, says Sobolik. Surveys estimate that 48-55 percent ofpeople in attendance are from out of town.“That has an economic impact on the Fargo-Moorhead region,”

Sobolik says. “For sporting events you don’t have to work as hard to getthe amount of people you need as you do for other events. At timessports sells itself.”

(continued from page 28)

(continued on page 32)

Fans enjoy a football game in the FargoDome. (Photo Courtesy of FargoDome)

Prairie Business 31

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CHANGE WILL CONTINUE INTO THE FUTURERolling thinks that there will be leagues searching for new revenue

streams with high net yields, meaning corporate sponsors’ logos, names,or both appearing on professional league uniforms. “The NCAA mightthen consider a similar relationship that could help schools meet Title IXrequirements without cutting sports,” he explains. “At the high schoollevel, it could mean the elimination of pay-for-play requirements andprovide a source of funds that could be used to further enhanceeducational programs and opportunities.”Another change could involve cell phones and PDAs. Rolling says

there are interesting plans in the works in which they will become thecredit cards and ticket accepted at sport venues. “Cash and tickets for

food and beverage will be transferred electronically to our businessclients, family, and friends,” he adds. “Phones can be swiped at the entrygates, and merchandise offers can be accepted with a click, with promptdelivery to the seats.”Rolling concludes that obviously, there are people and organizations

that have created an abundance of wealth from sports. “From purely aregional or local perspective, sports events will generally inflict economiccosts on the host community and region as well as deliver economicbenefits,” he states. “I think that as free time continues to progressivelydominate total activity, the dollars from various sports industries willalso increase.”

(continued from page 30) National Hockey and Event center in St. Cloud, MN. (Photo courtesy of JLG Architects)

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34 October 2010

34 Month 000034 Month 0000

COMMUNITY PROFILE - WILLMAR, MN

Willmar Lakes Area Chamber of Commerce President KenWarner likes to use the word ‘cooppetition’, which is notactually a word, when talking to groups about his community.

“I see a lot of competition cooperating with each other,” Warnerexplains. “They work together to help better the community.”Willmar, with a population of 18,000 people, is considered a regional

hub in central Minnesota. It is far enough away from major populationcenters like Minneapolis or St.Cloud, MN, or even SiouxFalls, SD, so that it has its owneconomy.“Our economy is not affected

dramatically by other people’seconomy,” says Steve Renquist,Executive Director, KandiyohiCounty and City of WillmarEconomic DevelopmentCommission. “We have 18,000jobs with 10,000 adults. It givesyou an idea of what a jobmagnet we are.”Being a regional hub,

Willmar is able to reach out toan estimated 200,000 people.Within a two-hour drive thereare 3 million people, and thegoal is to get those peopleunder the community’s radar.Last year, Willmar had $500

million in retail sales and inKandiyohi County, there was 2billion in retail sales. There is

also a diverse culture as is evident by 40 new businesses being created byminority owners.The community has a 200 acre city-owned industrial park with

infrastructure in place, as well as rail industrial sites. The ag industryincludes turkey hatching, turkey and feed processing, agriculturalequipment and supplies manufacturing. Other major industries are steelfabrication, transportation, component and plastics manufacturing,printing, cookies and nuts, concrete products, bottled water, as well asautomotive, electrical, steel, and industrial supply distributors.

HUB OF ECONOMY STILL AGRICULTURERenquist says that agriculture will always be the core strength, and

you can never get away from it, but there is much more than justagriculture in the area.

Regional hub in central Minnesota

By Alan Van Ormer

Ken Warner, President, Willmar LakesArea Chamber of Commerce

Steve Renquist, Executive Director,Kandiyohi County and City of WillmarEconomic Development Commission

(continued on page 36)

A view of Willmar, MN. (All photos courtesy of Willmar Lakes Area Convention & Visitors Bureau.)

Chief Kandiyohi

36 October 2010

The first tier of economic drivers includes agriculture and agricultureservices, as well as a booming healthcare and technology industry. Justbelow those three stable economic strengths are tourism, manufacturing,regional government services, and distribution centers.Community leaders say that the community has grown culturally and

there are more opportunities for those who live within Willmar and in thecounty.“Willmar offers a complete package,” Renquist states. “There is high

quality education, arts community, and museum. Willmar has been solidin creating jobs, has a high quality of life, and is a great place to live. Thereis no reason it won’t continue.” Agriculture continues to lead the way with the help of technology.

Willmar boasts one of the largest turkey processing companies in thenation. Because of that distinction, the community took an old mentalfacility and developed a 114-acre technology campus that houses 19companies and has more than 260 employees. The MinnWest TechnologyCampus has the capability to house up to 50 companies and as many as800 employees.Life-Science Innovations is the executive and administrative parent for

companies whose focus is in innovation in the life sciences andengineering. Some of the notable technology companies in the complexare Epitopix, Nova-Tech Engineering, Syntiron, and Willmar PoultryCompany dba Ag Forte.“When any technology company comes out this far they say we can’t

survive out here because there are not enough employees of similartechnology,” states Scott Norling, Vice President Administration, Life-Science Innovations. “It is always a big risk for them to move out here. Thecluster idea is to keep like technology companies in a given area that canfeed off each other and share ideas.”

Epitopix is a company thatstarted from the turkey business asthe laboratory division of WillmarPoultry Company. The company hastwo USDA licensed vaccines forcattle and has a dozen in variousstages to handle salmonella andother diseases in poultry and cattle,as well as E. coli 0157 in cattle. It hasgrown to 50 employees; 35 work inmanufacturing and 15 are involvedin research and development.

This year, Epitopix started amarketing partnership with Pfizer, aworldwide marketer of cattlevaccines.

“Locally our impact on the agcommunity is through what we dofor our parent turkey company,” says

Jim Sandstrom,General Manager,Epitopix. ”OurEpitopix impact onthe cattle industryis national in scope.The local Willmarag economy hasfloated our businessthrough the start-up phase.” Sandstrom says

there are 10 vaccines in product development currently. “Ourmanufacturing facility will produce enough capacity for another 3-4 yearsand then will need to move to another facility,” he states. “We intend tocontinue growing and working together with Pfizer, blending ourvaccines in with their vaccines and making vaccine combinations. Thatwill give them competitive advantage against the other animal healthcompanies. They would like to bring our vaccine technology to theinternational market also.”

HEALTHCARE IMPORTANT PART OF COMMUNITY The community is seeing people retiring and moving to the area

because of the medical services that are offered. The community boaststhe largest municipal hospital, as well as two local medical centers. Thereare more than 100 physicians and other medical facilities that are a hugedraw to the community.Terry Tone, Administrator, Affiliated Community Medical Center, says

almost 22 percent of services are provided to people of diverse cultures.“We are very cognizant of the fact that we have to be prepared to meetthose challenges,” says Tone, adding that it has been a growth for thecompany. “We have a lot of support personnel that deal with health issuesunique to minority populations.” Affiliated Community Medical Center is a multi-specialty clinic that

covers 11 counties. In some of the counties they are the only providers ofhealthcare. There are 1,000 employees and 160 providers. It is the largestphysician-owned clinic in the state.The Southern Minnesota Area Health Education Center is designed to

help rural communities and underserved areas growth their healthservices. The company has equipment to help with training andassimilation in communities, as well as for specific programs such as childobesity and dental assistance.According to Steven Moburg, Interim Director, Southern Minnesota

AHEC, a quarter of the patients are underinsured or need assistance.The main program is what we call pipeline development – from 8th

grade on try to encourage them into healthcare careers. “If we can getsome people from the rural areas they have a greater tendency to returnto the rural areas,” he says. The health education center works with doctors, nurse practitioners,

Scott Norling, Vice PresidentAdministration, Life-Science Innovations

(continued from page 34)

(continued on page 38)

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pharmacists, lab technicians, and other healthcare careers. They touch asmany as 1,000 people during a course of a year.We are finding they are more likely to come back to a profession,”

Moburg states. “Healthcare is one of the major factors in any communityeconomic development. It helps to be able to maintain that in acommunity such as Willmar is extremely important because the future ofthe whole community is based on access to healthcare and to get it whenthey need it.”

OTHER ECONOMIC DRIVERS ASSIST GROWTH Right behind the top three tiers of economic development are several

others that help the community grow.Beth Fischer, Executive Director, Willmar Lakes Area Convention and

Visitors Bureau, says tourism is important to the area. Within our countywe have over 100 lakes. There are 30 recreational lakes, 41 city, county andstate parks with beaches, boat landings, camping, hiking, biking,horseback riding, snowmobiling, and cross country skiing trails. Inaddition, there are three 18-hole golf courses, and two 9-hole golf courses,as well as baseball and softball diamonds, soccer fields, tennis courts,indoor shooting range, and archery range.In addition, government services have a big presence in the

community.In the 1980s the city of Willmar used extra revenues from a series of

general obligation bonds to set up a community investment fund. Thefund has reached $9 million and the interest earnings are used to spurmore improvements.The money is being used to help develop and expand the industrial

park, build a $22 million airport improvement project, $86 millionwastewater treatment project, $52 million Rice Memorial Hospital

expansion, and $30million on improvementsin the technology park.“We have been able to

maintain majorindustries and businessesleaving the community orgetting out because of theeconomy,” says MichaelSchmit, Willmar CityAdministrator. “We havebeen able to hold ourown in this economy.”Schmit adds that local

governments arestruggling and alwayshave to cut budgets andservices. “Willmar is in afairly strong, financial

position. Willmar historically has seen very modest growth. It has been aslow, steady growth,” he explains. “I don’t’ think we have ever taken onprojects that over extended our resources and our ability to pay. Itprobably is the result of strong, conservative fiscal management policy.”Ridgewater College helps bolster the education in the Willmar region.

The comprehensive community and technical college have campuses inWillmar and Hutchinson, MN. The college serves more than 5,800individuals each year and offers more than 100 programs. In addition,Customized Training and Continuing Education is the business andworkforce training arm of the college. It served nearly 16,000 individualslast year, providing over 101,000 hours of training. The college employsaround 400 people, including faculty, support staff, and administrators.Sam Bowen, Director of Communications and Marketing, believes it is

a safe assumption that the college has a major economic impact in thecommunity. “Simply looking at the number of students attending classesat our campuses – whether commuting or moving to town – there is anincredible amount of money that changes hands (rent, food, fuel,entertainment, etc,” he explains. “Another incredible statistic is thenumber of alumni who live and work in the region. The vast majority ofalumni in the College Foundation’s database lives and works in the sevencounty region around Kandiyohi County.”

STILL CHALLENGES TO FACE Education issue, cultural issue, bilingual issues, and mainstreaming

issues, as well as finding physicians wanting to work in rural parts ofMinnesota, transportation issues, and finding funding for ruralcommunities are all challenges.Renquist says that the community is fortunate that with the agriculture

entity intact we don’t see the highs in the hot times of the economy northe lows in cold times. “We don’t see expansions that we like to have, but one of the things we

have found is that the real strong companies don’t turn anybody away,” hesays. “They recognize that in a time like this there are opportunities. Theycan get high quality help.”

Beth Fischer, Executive Director, Willmar LakesArea Convention and Visitors Bureau

38 October 2010

(continued from page 36)

Willmar offers a variety of outdoor activities.

If the weather cooperates and everythingelse works out well, farmers in the regioncould see a very good crop. Not only will

farmers see money in their pockets from agood harvest, but rural areas will also see morespending in their communities.Tom Lilja, Executive Director of the North

Dakota Corngrowers Association, believes thisyear’s harvest “will be a record gang-buster.”The previous record was 129 bushels per

acre of corn in 2007. Statewide projectionsshow that it could be 140 bushels per acre thisyear.“Anytime you increase a statewide average

by five bushels, it is very big,” he states. “We’reincreasing it by over 10. We really have aphenomenal crop that is sitting to beharvested.”North Dakota Ag Commissioner Douglas

Goehring, says agriculture is still the numberone economic driver in the state; its 25 percentshare of the state’s economy is twice as large asthe energy sector.Even more importantly, rural communities

are going to reap rewards of a bountifulharvest, Goehring explains. “There are a coupleof things helping right now,” he adds. “Russiaand Mongolia are not having a great crop thisyear because of severe drought. That changesthe dynamics of the world market and peopleare coming to the United States to buy wheat,which pushed the wheat prices up to a scenariothat is getting above the cost of production.That is encouraging to producers.”Goehring also says that with the price being

up there is a skip in a farmer’s walk. “You see aglow about harvesting a big crop and knowingthere is some value there,” he says. “You can seeit in their spending habits in town.”

There was a good crop last year, but priceswere in decline, states Goehring. “In somecases, the producers said they couldn’t meetthe costs of operating,” he explains. “This yearthere is some hope. Solid row crops are prettygood and prices aren’t so bad.”Just to the east, Douglas Hartwig, Director,

USDA, NASS, Minnesota Field Office, says thatbased on Aug. 1 conditions, Minnesota’s cornproduction is forecasted at just over 1.2million bushels, which is slightly above the2009 production. The yield forecast of 178bushels per acre is up four bushels from 2009.Other crops are also expected to increase in

Minnesota. Soybean production is forecast at326 million bushels, which is up 14 percentfrom last year’s production, spring wheat isestimated at 90.8 million bushels, up 10percent, and the sugar beet crop is estimated at11.5 million tons, which is up eight percent.North Dakota is the number one producer

of 14 different commodities including springwheat, barley, canola, sunflowers and durum.It is number two in potato and sugar beets.

Corn and soybeans are increasingly important.Lilja states that what is happening in the

past 15 years in the farming industry is atextbook example of supply side economics.“As you increase the supply, the economicstrickle down from the farmer to the trucker tothe elevator manager or ethanol plant to therailroad,” he explains. “All that money goesinto the local economy. It is very difficult toput a number on it. If you take 2 million acresand add another 50 million bushels, take cornmarket increasing 1.50 on average the last fourto five years, you are looking at a minimum of$150 million before a multiplier effect.”Goehring agrees that communities and

businesses could be looking at a bumper yearthemselves. “I think I can safely say it is goingto be a good year for our rural communitiesbecause there will be money moving throughthe economy,” he says. “Every $1 madegenerates 3 ½ times. That stimulates your ruralcommunities.”

By Alan Van Ormer

Bountiful harvest expected

Prairie Business 39

40 Month 0000

Energy projects cannot occur without water.“Coal mining and the utility industry in this state (NorthDakota) is largely here because of Lake Sakakawea,” explains Dr.

Gerald Groenewold, Director, Energy & Environmental ResearchCenter. “You need a fair amount of water to cool a coal-fired powerplant. You can air-cool a coal-fired power plant, but you pay asignificant penalty in efficiency.”Garland Erbele, Chief Engineer, Water Rights Program in South

Dakota, says the biggest impact he sees concerning water and energyare coal-fired plants and the ethanol industry.In South Dakota, Erbele says the demand for energy is continuing

to go up. “The energy industry has plateaud at the moment,” heexplains. “However, as our population grows and the demand forenergy increases, the development of renewable fuels in the states willcontinue to grow.“Water is an important part of the power generation process,” he

adds. “On a different level, particularly in the southwestern states, likeCalifornia, the amount of energy that is consumed moving water istremendous. There is a huge connection between energy and water.We see it to a lesser extent in South Dakota. Our biggest mover ofwater is rural water systems.They are especially importantto our ethanol industry becausethey provide the water needs toapproximately one half of ourethanol plants.”As chief engineer, Erbele’s

primary function is to managethe beneficial use of water forthe state of South Dakota. “Anyenergy project that is going touse water has to obtain a waterright,” he states. With the booming oil needs

in western North Dakota, thereis a major need for water notonly to help with fracking in theBakkens, but also for peoplethat are moving in. Jobs arebeing created andinfrastructure needs the watersupply.

“The biggest problem right now is finding water for drilling andhydro-fracking oil wells,” states Todd Sando, State Engineer for theNorth Dakota State Water Commission. “Large quantities of water areneeded particularly for the hydro-fracking process. Other than theMissouri River and Lake Sakakawea, water sources in western NorthDakota are limited.”There are seven coal-fired plants that all rely on the Missouri River

to cool their plants. “Except for wind energy, water is required forother sectors of energy development in North Dakota,” Sando says.Sando explains that the best resource is Lake Sakakawea. However,

there are impediments dealing with the federal government, heexplains. “Ground water is such a precious resource,” he adds. “It ispretty close to fully allocated in a lot of areas. It is just not a goodoption to use our limited groundwater for oil field development whenwe have such a vast and reliable source of water from Lake Sakakawea.”Sando lays out the following facts. The state is looking at about

1,800 new wells a year. Each well needs up to about four or five milliongallons of water or about 22,000 acre feet of water per year. Sando said the state of North Dakota is meeting with the Corps of

Engineers to get temporary authorization to use water from existing

Water, energy work together

40 Energy

By Alan Van Ormer

Oahe Dam. (Photo courtesy of Basin Electric Power Cooperative)(continued on page 42)

Energy 41

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GYPRAIRIE BUSINESS

irrigation permits for industrial (oil field) use. Mark Lindquist, who works with the Minnesota DNR, addressing

policy issues where energy and natural resource management intersect,says that generally speaking, energy and water are very closelyinterconnected. “Energy is a water intensive industry, and water is an energy intensive

industry,” he says. “As a heavy and bulky commodity, producing,transporting, and treating water uses considerable amounts of energy,usually electric power. Water treatment, as you know, occurs prior to and

after many uses. Filterplants and waste watertreatment plants aresignificant electric powerconsumers.”In Minnesota, one oil

refinery is permitted touse 2.5 billion gallons ofwater per year. A largeethanol plant may use0.3-0.4 billion gallons peryear, according toLindquist. In addition, Lindquist

states generally speaking,energy facilities alsorequire significantamounts of water. “Thewater demand associatedwith ethanol productionhas garnered significantattention in recent years,”he adds. “Ethanol plants

use perhaps 3-5 gallons of water to produce a gallon of ethanol fuel.”The Minnesota DNR is responsible for the appropriation of water, the

management of water flows within the state, and the regulation ofconstruction in or alterations of public waters. DNR also sees regulationof certain water related land uses.“In this context, DNR is very interested in seeing that water is used

efficiently to maximize the benefits of use and that water intensiveindustries are sited in places that can sustain the demand for water,”Lindquist explains. “We are also responsible to minimize the ecologicalimpacts of water use.”To put it all into perspective, the Water Management Center at the

EERC, says the electrical industry accounts for almost 40 percent of allfreshwater withdrawals in the nation. Almost 90 percent is used in fossiland nuclear-based electricity generation. Over the next 20 years,electrical demand is anticipated to increase by 50 percent. Most demandis expected to be for coal and nuclear electricity generation, increasingwater needs by 45 percent.The EERC is working with major oil companies to develop

alternatives to Lake Sakakawea. One possibility is using deep groundwater. “This is not something used for human consumption, because it istoo salty,” Groenewold explains. “That is a good back up plan when thelake drops.”The EERC’s Water Management Center is also working with the U. S.

Department of Energy and corporate partners to reduce the water use inpower systems. One technology being demonstrated by the EERCrecovers water from combustion flue gases to reduce the net waterrequirements of power plants burning fossil fuels. In addition, the EERCis also developing a new cooling system which, compared to conventionalwet cooling systems, will significantly reduce makeup waterrequirements and is expected to be more economically attractive, says theEERC.Groenewold agrees that a concern is shortage of water. “It is fine in a

ENERG

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42 Energy

Todd Sando, State Engineer, North Dakota State Water Commission

Leland Olds Station. (Photo courtesy of Basin Electric Power Cooperative)

(continued from page 40)

Energy 43

wet cycle,” he explains. “When we go back intoa drought, we might not be able to use thiswater. If it is a choice for municipalities to getwater or the oil industry or any industry to getwater, law will determine that water go to themunicipalities first.”Public complaints about the coal industry

are that coal-fired power facilities use a lot ofwater. “But, they actually consume only a smallpercentage of what they use,” Groenewoldexplains. “Most goes into the system, comesout warm and goes right back into the lake.They may be consuming only eight percent ofthe total water that goes through the plant. Theplant’s water usage is not quite as devastatingas some people may portray it to be. It’s not ahuge consumer, but it is a huge user.”Groenewold does state that as long as we

have more and more demands on our watersupply, we’re going to have an ever increasingconflict between those who are stakeholders. Another challenge is that people need to

understand water and what the energyrequirements are, says Groenewold. “We needto focus on conservation. We waste a lot ofwater. We have taken water for granted,” headds. “It is all about education. We need tounderstand what the challenges are. We need tounderstand the enormity of water use in thisregion and country and hopefully we will beable to find a balance. If we ignore this issue,we could find ourselves in an unsustainableand untenable situation.”

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GYPRAIRIE BUSINESS

By Ryan Schuster

For each 10 wind turbines constructed in South Dakota, there willbe one job. For some states, that might not seem a lot. But for asparsely populated state like South Dakota, that is considered

economic development.“We’re making headway,” says Steve Kolbeck, South Dakota

Public Utilities Commissioner. “We’re seeing great growth. We haveso many miles, so sparsely populated, I think people think wearen’t making headway. But we are.”Along with the jobs that are being created from construction ofwind turbines, the state is also seeing an impact through

manufacturing and education. For example, smallcommunities are home to wind turbine

manufacturers. Vocational schools are teachingpeople how to build and maintain the wind

turbines.There are eight wind projectsalready in the state. The first was

the Chamberlain WindProject, a 2.5 megawatt

facility that started in 2001.The last was Day County Wind, a99 megawatt project that startedproviding green energy earlier this year.There are several wind projects under construction or close tostarting construction.Buffalo Ridge II, developed by Iberdrola Renewables, is nearcompletion northeast of Brookings. The 210 megawatt farm isconsidered to be the largest wind farm project in the state. Todate, Iberdrola Renewables has completed the roads andfoundations for all 105 wind turbine locations. Half of theturbines have been erected and the other half will be completedin 2010. The project will be commissioned and operational in thefirst quarter of 2011, says Timothy Seck, Director, WindDevelopment, Iberdrola Renewables.

He adds that South Dakota is a great place to develop wind resourcesfor several reasons. They include an excellent wind resource, supportivebusiness environment and local communities established wind sitingrules. In addition, Iberdrola Renewables has mature interconnectionrequests in South Dakota.“Iberdrola Renewables will provide a significant amount of money in

taxes to the local communities and substantial landowner payments onan annual basis,” he explains. “Over two hundred workers are involvedwith the construction of the project and 10-15 will be involved in the on-going operations and maintenance of the project. “Seck states that one of the keys to unlocking further South Dakota

wind potential is settling transmission policies within the MidwestIndependent System Operator. This includes who pays for newtransmission lines and the timing of building additional transmissioninfrastructure.Two other wind projects are hoping to start construction this fall. One

is Prairie Winds SD 1, a 165 megawatt farm developed by Basin ElectricPower Cooperative. This wind farm is waiting on a federal permit. Thesecond is Strandburg Wind Farm near Strandburg, SD. This 20 megawattwind farm, developed by Harvest Wind, is hoping to begin constructionin November.Then there are three wind farms all waiting on transmission upgrades.

They are Minnehaha West Wind, a 350 megawatt farm developed byIberdrola in western Minnehaha County, Hurricane Lake, a 250 megawattwind farm developed by Invenergy in Roberts County, and Dakota WindProject, a 300 megawatt wind farm in Day and Marshall counties,

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South Dakota wind is blowingBy Alan Van Ormer

PRAIRIE BUSINESS

ENERG

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44 Energy

developed by National Wind.In addition, organizers of the South Dakota Wind Partners have

collected almost $13 million toward a $16 million goal for a seven-turbinewind farm in Jerauld County.Kolbeck explains that the Buffalo Ridge II Wind Farm will be

important to the state. “It shows that South Dakota could support largewind projects,” he states. “The biggest thing it has done for South Dakotais show that that the state is ready for development. We can handlechallenges with major turbines.”There are challenges to wind projects in South Dakota.South Dakota has 700,000 square miles, but only 800,000 people and

the state don’t use much electricity. That means there is a need for amarket. However, the difficulty of transporting this electricity lies intransmission.“We have the wind makeup that is enticing,” states Kolbeck. “However,

transmission to get it there comes at a very high cost.”Then there are tax credits that are ending soon. “We need to extend the

tax credits,” Kolbeck says. “Rules are so influx right now. Until we have aplan in place in our nation, it is very difficult which way to go right now.”Wind projects are subject to sales and contractor’s excise tax, as well as

a form of property tax in South Dakota.“The contractors’ excise tax was recently a subject of debate in the

2010 Legislative Session,” says Kolbeck. “Typically new projects arecharged a two percent contractors’ excise tax. However, there has been aformula to rebate some of that tax to incent large projects to locate here.This spring, the legislature changed that rebate formula a little bit forwind projects. The biggest change is that it is set to expire in 2013.”Kolbeck acknowledges that wind energy is a hot political topic. “I think

it is very real that we can achieve success,” he explains. “We are alwaystrying to balance ideas with reality. In reality, we are sparsely populatedand don’t use much electricity. The idea that we can become a leader thatis what we need to strive for.”

Energy 45

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GYPRAIRIE BUSINESS

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Rail system nice option for

moving oilBy Maxine Herr

Due to North Dakota’s Bakken Formation success, existing oilpipelines are at or near capacity and forcing shippers to look atalternative methods of transport to move the crude. Though they

may lack the efficiency of a pipeline, railroad systems have become thenext best option for moving large amounts of oil between regions.The use of the railroad has helped the state avoid deep discounts to oil

companies. “It has worked out pretty well,” states Ron Ness, North DakotaPetroleum Council President. “We reached a cap on the pipelines, sohaving these rail facilities has been critical right now.” Ness says whenthere is a capacity constraint, it becomes a bidding war to move product.Fortunately, the rail facilities have helped alleviate some of that upset inthe market.Currently, North Dakota has eight rail facilities either in operation or

under construction, and an additional facility being proposed. As of June2010, the rail facilities shipped approximately 30,000 barrels of crude oilper day. The amount they could potentially ship is highly variable,according to Lynn Helms, Director of the Oil and Gas Division of NorthDakota’s Mineral Resources. He says it is based on rail car availability, butcurrent operating rail facility capacity is 125,000 barrels per day. Helmsadmits with all of the oil activity taking place, it has been difficult to get

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For more information about the EERC’s expertise,visit www.undeerc.org.

Energy 47

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GYPRAIRIE BUSINESS

consistent reporting of transported volumes.Whether the oil drilling and pumping is sustained for these facilities

remains dependent upon what happens in Washington, D.C. “We believethey will [be sustained] as long as federal legislation doesn’t result in majorcost, tax, or oil price changes,” Helms says.Ness says oil prices have remained stable at approximately $70 per

barrel, and North Dakota crude oil ranges from the low to mid $60s. At thebeginning of the year, Ness was predicting that North Dakota couldrealistically produce over 350,000 barrels of oil a day by 2015. Now he sayswe’re nearly there. “We’re in that range already probably,” he said. “We had310,000 barrels in July. With 143 rigs running we’re going to continue toramp that up substantially in the next number of months.” A Texas company that began shipping North Dakota’s rich Bakken

crude to Oklahoma by rail earlier this year is currently sending 65,000barrels out each day from its loading facility in Stanley, ND. A round tripfrom Stanley to Stroud, OK is over 2,000 miles and takes eight days totravel. To ship oil by rail is estimated at $6 to $10 a barrel versus $5 to $7per barrel by pipeline. The differential for 65,000 barrels could be as muchas $450,000. But the extra cost is worth it for the ability to continuallymove the crude. According to Elizabeth Ivers, public relations director atEOG, the Stanley facility employs approximately 45 people, and exports itsoil to market faster and more efficiently with its ability to load 14 carssimultaneously.

But sometimes even just moving a little can mean a lot. In Stampede,a town near Columbus, ND, Pioneer Oil is loading North Dakota crudeonto rail cars at a much smaller capacity. The facility is loading about4,000 barrels a day. The filled cars go to Flaxton and then other railroadsare involved in getting the crude oil to refineries.Other loading facilities currently in operation are in Minot, Tioga, New

Town, Dore, Donnybrook and Ross. Another site is being proposed inWilliston.“They are filling an important role preventing export bottlenecks until

more permanent pipeline capacity can be built,” Helms states. “They areproviding access to markets that will pay a premium price for pure Bakkencrude oil.”

Maxine Herr is a Bismarck, ND-based freelance writer. She can bereached at maxine606@msn.com.

48 October 2010

The 2010 North Dakota Governor’s Rural Community Summit notonly provided community economic development leaders aroundthe state an opportunity to network, but, it also provided a chance

to educate these same economic development leaders.North Dakota Department of Commerce Commissioner Shane

Goettle says the hope is that the conference would challengecommunities to think outside of the box. He says through theeducational portions of the Summit the communities have a solid feelingof what site selectors are looking for. “This also helps new developers,” headds. “Knowing how to pitch a community is challenging.”The 2010 Governor’s Rural Community Summit, entitled

‘BREAKthru’ was held in Minot on Aug. 24-25. It included variousbreakout sessions dealing with communities positioning themselves,breaking through destination marketing barriers, and finding creativeways to solve workforce solutions. In addition, there were best practicespanel discussion on destination development, workforce attraction andrecruitment, and business and community development.The keynote speaker – Terri Norvell, founder of Further Performance

Group, based out of Westminster, CO., explains that life is about taking arisk. “Whenever we focus we do get results,” she says. “Believing inyourself amazing things are possible.”Norvell suggests that community leaders need to focus on what they

can do, adding that our abilities, our capabilities are all in our heads. “It’sall about choice,” she says. “Where are you focusing your attentions?”North Dakota Gov. John Hoeven felt that those in the audience are

the ones making a difference around the state and it shows. He explainsthat North Dakota made job creation its number one goal. Since 2000,job creation has been the engine that drives the state and makes thingswe want possible, Hoeven adds. “Jobs and opportunities have alwaysdrawn people,” he says. “We all have to be committed to do it.”Hoeven also agrees that the state has to stay focused, adding there will

always be more to do. “There are going to be challenges.”He also says that the state has to continue to diversify as it grows. “Ag

is our number one industry. It will always be our number one industry,”he explains. “We have to continue to make sure it grows and expands.”Energy, technology-based companies, and tourism are also part of the

economic landscape. “We have to link with education,” he says. “We aremaking progress, but we have a lot more to do. As long as we keep youinvolved, we will be successful.”North Dakota Congressman Earl Pomeroy also spoke and told the

crowd that in the room was the real hidden secret of North Dakota. Healso states that vision, cooperation, and persistence are all part of whatNorth Dakota does.In addition to those in North Dakota that know what is going on,

there were several attending from outside the state that found out whatNorth Dakota is doing.

Paige Webster, siteselection consultant forFoote Consulting Group,in Phoenix, AZ, says hewas attending to try tohelp rural communitiesunderstand what hiscompany does. FooteConsulting Group helpscompanies looking toexpand or relocatecompanies throughoutthe nation. The group also helps companies with specific studies to putthem at a competitive advantage.“We know North Dakota’s story,” he says. “In this business it is all

about relationships. I’ve seen good, potential opportunities for existingindustry and new opportunities for recreational and manufacturingcompanies.”Another site selection consultant was impressed with what he saw at

the Summit. John Castro, managing director of MaximusAlliance, basedin Dallas, TX, says he had never been to North Dakota, but the state wasone of nine on the radar for renewable energy. MaximusAlliance assists companies in finding communities that

companies should be interested in.“What is attractive about North Dakota is the cost of doing business

(including real estate, labor, cooperation of local and state government),”he explains. “I feel comfortable that North Dakota has that capability thatwe could market to site selection committees.”In a session entitled “Revival of the Great Plains’, Joel Kotkin,

internationally recognized authority on global, economic, political, andsocial trends, talked about what the United States could look like in 2050and how this growth would allow the nation to emerge by mid centuryas the most affluent, cultural rich and successful nation in history.He explains that we are on the cusp of long-term opportunity in the

middle of the country because of the need for food, adding the increaseddemand for ag products around the world.

By Alan Van Ormer

A ‘Breakthru’ in Minot

“Let the rest of thecountry and world knowthat the future is in this

part of the country.”

- Joel Kotkin

Keynote speaker Terri Norvell

Prairie Business 49

Kotkin also says that there are key opportunities in natural gas.“Outside of Canada, we shouldn’t be importing from anybody,” he states.Small cities are going to have big opportunities, according to Kotkin.

One slide shows that demographic trends and growth create newopportunities, as well as the role of technology in opening globalmarkets. North Dakota is beginning to take advantage, he states, but saysthe key is the advantage of being job-rich.“In the next 10 years those cities that have jobs are where people are

going to go, “he says. “The entire Great Plains is making no case for itsfuture.”He considers new technology the great equalizer because it could

“telescope” the distance between communities, allow younger workers tochoose affordable lifestyle and still stay in less dense areas, and help tieNorth Dakota directly to other global and metropolitan markets.Possible strategies that could improve prospects for the state includes

targeting key mobile groups such as immigrants, 30 somethings anddownshifting boomers (50-60 year olds not ready to retire), focusing notjust on energy production, but processing and researching, buildingupon lifestyle and affordability advantage, and building on what NorthDakota is – just making it work better.“This is a great period for North Dakota,” he concludes. “Let the rest

of the country and world know that the future is in this part of thecountry.”

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CAPITAL Card Services

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Region partially insulated

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Brainerd, MN, looking

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recession's impact - pg.34

Regional officials

upbeat about 2010

tourism outlook

Tourism Melissa Bump (left)

, director,

South Dakota Office of Tourism

John Edman (middle), director,

Explore Minnesota Tourism

Sara Otte Coleman (right), directo

r,

North Dakota Tourism

www.prairiebizmag.com

Minnesota cities addressfunding challengespg.22

Communities anticipate2010 Census impact pg.26 Pierre one of South

Dakota's best kept secrets pg.40

Universities getcreative to booststudent population

Enrollmentgrowth

Dean Bresciani takes over as

president of North Dakota

State University, pg. 38

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For a farmer, theharvest is theculmination of

an entire year ofplanning, planting,fertilizing, spraying,hoping and praying– praying for rainand for sunshine, forno hail, no blight, norust or anything thatwill damage the maturing crops. The end of the harvest istime to market or store the crop, repair and put awaymachinery and to start planning for next year.If prices are good, the harvest means opportunity –

opportunity to upgrade equipment and facilities and toacquire new technology. It means opportunity for a morecomfortable life, perhaps a new car or home improvements,new clothes for the family, perhaps even a bit of a vacation.For communities, especially smaller communities, a

good harvest means those farmers will be coming to town tobuy goods and services, everything from farm implementsto furniture to dentistry. That translates into greatereconomic activity, more business, more jobs and larger taxbase to support schools, roads, law enforcement andmunicipal improvements.The story of what the harvest means for our state is

much the same, only on a larger scale. Fully a quarter ofNorth Dakota’s economic activity and jobs are tied toagriculture. If farmers suffer, North Dakota does too. Whenfarmers prosper, so does the state. In North Dakota,agriculture truly is everybody’s bread and butter.As I write this, most of the spring wheat, barley and dry

peas are in the bin, and good progress is being made on ourother important crops – soybeans, durum, canola, beans andsunflowers to name a few. For the most part, the 2010harvest is looking pretty good, in some places, very good,even excellent. We can all breathe a sigh of relief.Farmers will rejoice in completing the planting-to-

harvest cycle of yet another year. We always look forward toa new year, new challenges, new adventures and newopportunities to grow food, fiber, feed and fuel for ourcountry and the world.”

Goehring is the Agriculture Commissioner for the state of North

Dakota. He can be reached at ndda@nd.gov.

VIEWPOINTDOUGLAS GOEHRING

Themeaningof harvestin NorthDakota F

eed, Fuel and Heal. That is the foundation and theeconomic promise of the biotech

industry. As we continue to work atmoving our economies forward,biotechnology is taking an active role inmeeting the challenges of finding newcures and improving health care,discovering new energy sources to fuel thecountry, and improving the way we feedthe world.Biotechnologies and biosciences are

outpacing every industry in terms ofexpansion, investments, and job growth. The South Dakota Biotech Association isproud to represent the companies and individuals who are moving this industryforward. Join us on Oct. 26 for the 5th Annual Summit and Annual Conference inBrookings to learn more. Meet with companies, universities, policy makers, andinvestors to discuss resources and advocacy while networking to strength theindustry as it moves forward to feed, fuel and heal the world.

FEED - As the world searches for new technologies to feed a growing population,our association members are driving technologies that improve the productioncapabilities of our farm economy and are also pioneering new development andresearch targeted at dramatically improving food safety. One company, AEGIS,provides the critical testing for the transfer of genetic material in food borne diseases.

FUEL - Global energy demands are projected to grow more than 50% by 2025. Tomeet that demand new sources of energy are being developed in South Dakotaaround biofuels and with research from our public universities, the South DakotaCorn Utilization Council, the South Dakota Soybean Research and PromotionCouncil and support from economic development corporations around the state.South Dakota has globally recognized brands that have an impact on providingnew energy resources that incorporate environmental best practices.

HEAL - South Dakota’s healthcare leaders, Avera and Sanford, have focusedinitiatives in the areas of Type I diabetes and behavioral sciences that have a globalimpact. Meanwhile other companies, such as Hematech, use the latestadvancements in technology to fight disease. Each of these activities are creatingsustainable jobs and strengthening our regional economies.There is a good reason South Dakota has identified biotechnology as a targeted

industry for growth. The investment of millions of dollars in research andproduction have improved our biotech products, bolstered our existing industries,created new high wage jobs, and strengthened our economy with new globalexport opportunities. None of this happens by accident. Every day there are new examples of public

– private partnerships that continue to move biotechnology forward. The SouthDakota Biotech Association is proud to be a catalyst in continuing the success ofbiotechnology in the region.

Elizabeth Larkin is the Executive Director of the South Dakota Biotech Association and

can be reached at elarkin@sdbio.org.

ELIZABETH LARKIN

Biotech industryprovides economicpromise

52 October 2010

Prairie Business 53

Small businesses have long been acknowledged as the backbone ofthe nation’s economy. They employ approximately 50 percent ofthe workers in the United States and it is estimated that up to 60—

80 percent of the net new jobs are attributable to small businesses. Beloware the six biggest challenges facing small business owners in today’srecessive economy.

BALANCING THE MONEY EQUATION.Most businesses use a combination of long-term debt, lines of credit,

and owner equity to run their operations. Long-term debt allows themto purchase needed capital equipment to improve efficiencies, while linesof credit provide funds to run operations until revenues are sufficient tofinance business operations. Having a significant equity position allowslenders to look more favorably on loan requests. Securing the correctmix of owner equity and bank financing to properly run the business hasbecome a challenge, given that many banks have tightened their lendingprocedures. This is occurring at the same time that some businessowners are seeing their equity positions shrink from the selling-off ofunproductive assets to meet current obligations.

FINDING THE APPROPRIATE UNIQUE SELLING POSITION.A key factor in being competitive is to have a Unique Selling Position

(USP), easily recognized by customers as a reason for them to do businesswith you. The USP can be based on any of a variety of factors such as aprime business location, lowest prices, exclusivity of product offering,fast service time, high quality product offering, or extremelyknowledgeable and customer service-oriented employees, to name a few.To find the appropriate USP requires an in-depth understanding of yourown strength and weaknesses, as well as that of your competitors.Combining this understanding with an effective marketing plan isnecessary to create awareness in the minds of your targeted consumer.This USP must then become the basis for all of your marketingcommunications to maintain and build a sufficient customer base.

MANAGING EMPLOYEES. Managing the workforce needs of a small business has become

increasingly difficult due to the different layers of federal, state, and localregulations. Recruiting and retaining competent employees has alsobecome increasingly difficult for small business owners as they struggleto find the right levels of compensation and autonomy for their workers.Having employees also requires the business owner to assume the roles ofteacher, leader, motivator, and sometimes disciplinarian, to ensure thework is done properly and on time.

INVENTORY MANAGEMENT.The hidden costs of holding inventory can have a significant impact

on the bottom line of any business. Holding inventory requires costs forphysical space, security, insurance, handling, and losses due to theft,damage, obsolescence, or deterioration. Properly managing inventory inan environment with small profit margins, high inventory managementcosts, and fickle consumer demands, requires constant attention to avariety of factors – customer demand rates, supplier shipping times and

costs , availability of key items, and proper care and handling of presentinventory.

MANAGING YOUR TIME PROPERLY.It is easy for small business owners to focus on the “fun” or

“interesting” aspects of the business (remember this is where theiroriginal passion lies) and as a result neglect the business end of owning abusiness – accounting, employee record-keeping, planning, andinventory control.

DEALING WITH THE UNKNOWN.Large companies have a distinct advantage over their small business

counterparts in indentifying and preparing for changes in theirenvironment. With more staff and resources they are more likely to beengaged in long-term strategic planning, a process that requires constantmonitoring of a variety of direct and indirect forces affecting theirindustry. These larger companies are also engaged in lobbying efforts tohelp ease or prevent difficulties resulting from government regulation.Small business owners are too busy to engage in formal strategic

planning and too small to effectively lobbyindividually in the government arena. To offsetthese problems successful small business ownersset up networks of a variety of contacts –industry associations, other small businessowners, vendors, customers, and communityleaders – to provide them with information ontrends affecting their business and have a voicein government policing-making that impacts ontheir business.Giltner is the area manager of the SBA. He can bereached at eric.giltner@sba.com.

Six small businesschallenges

ERIC GILTNER

www.sdbio.org

5th Annual South Dakota

Biotechnology Summit& Annual MeeGng

Tuesday

Sponsored by:BIOSD SoybeanResearch CouncilSDSUHematechUSDFaegre BensonFicher ScienJficPioneerSioux FallsFoundaJonSanfordChrisJanson Landand CaIleEPSCoRPhRMAAvera

Volstorff CenterSouth Dakota State University

Brookings, SD

Bringing industries, universi3es and investors together.

October 26, 2010

54 October 2010

BY THE NUMBERSEMPLOYMENT (NOT SEASONALLY ADJUSTED)

UNEMPLOYMENT RATE EMPLOYMENT

July 2010 July 2009 July 2010 July 2009North Dakota 3.5% 4.0% 364190 359540Fargo MSA 3.7 4.3 121499 116061Bismarck MSA 3.1 3.3 63573 62405Grand Forks MSA 4.4 4.6 52604 52001Minot MiSA 2.8 3.5 34393 33164Dickinson MiSA 2.3 3.0 15050 14910Williston MiSA 1.9 2.7 14036 14375 Jamestown MiSA 3.3 3.1 13014 12140Wahpeton MiSA 4.2 5.3 11550 11540 South Dakota 4.3% 4.6% 434325 436020 Sioux Falls MSA 4.3 4.5 124380 124310 Rapid City MSA 4.1 4.1 67165 66940Aberdeen MiSA 3.2 3.1 22895 22865 Brookings MiSA 4.2 3.9 17285 17705Watertown MiSA 3.9 6.6 18475 18650Spearfish MiSA 3.8 3.7 13515 13520Mitchell MiSA 3.5 4.2 12985 12965 Pierre MiSA 2.8 2.7 12605 12530Yankton MiSA 4.1 5.0 11675 12040Huron MiSA 3.1 3.1 9645 9700Vermillion MiSA 4.2 4.1 6880 6990 Minnesota 6.8% 8.0% 2788049 2767843Minneapolis-St. Paul MSA 6.8 8.1 1762002 1732718Duluth-Superior MSA 7.5 9.4 147909 136382St. Cloud MSA 6.7 7.8 101313 100006Rochester MSA 5.5 6.5 103324 100792Mankato-N. Mankato MSA 6.1 6.9 54296 54288Brainerd MiSA 8.2 8.7 47936 45969Fairbault-Northfield MiSA 7.8 8.8 31277 30863Winona MiSA 7.2 8.4 25357 26939Fergus Falls MiSA 6.4 7.8 28181 28830Red Wing MiSA 6.8 7.8 23999 24159Willmar MiSA 5.8 6.6 24194 22602Austin MiSA 5.7 6.4 19901 20391Bemidji MiSA 8.2 8.7 19411 20144Alexandria MiSA 5.6 6.2 20248 20631Hutchinson MiSA 9.0 10.3 16970 18437Owatonna MiSA 7.8 9.2 18160 19176Albert Lea MiSA 7.7 8.6 15970 15416Marshall MiSA 5.6 5.9 13548 14092New Ulm MiSA 6.0 6.7 14144 14137Worthington MiSA 4.9 5.2 11441 11223Fairmont MiSA 7.1 8.4 10639 10851

MSA — Metropolitan Statistical AreaMiSA — Micropolitan Statistical AreaSources: U.S. Bureau of Labor Statistics, Minnesota Department of Employment and EconomicDevelopment, Job Service North Dakota, South Dakota Department of Labor

CANADIAN EXCHANGE RATE

NORTH DAKOTA OIL ACTIVITY

Sweet Crude ProductionPrice/BBL BBL/day

June 2010 $63.14 315,278May 2010 $60.10 298,060April 2010 $75.41 284,400March 2010 $73.48 277,300February 2010 $67.58 261,200

Drilling Producing Rig Permits Wells Count

June 2010 128 4,979 125May 2010 102 4,893 114April 2010 106 4,810 107March 2010 120 4,736 102February 2010 94 4,655 93January 2010 101 4,628 81

Source: North Dakota Office of Management and Budget

JULY % CHANGE JULY % CHANGE 2010 /JUNE2009 2010 /JUNE 2009

CANADIAN BORDER CROSSINGS

Source: US Customs and Border Protection

AUTOMOBILES TRUCKS

MINNESOTAIntl. Falls-Rainer 64231 20.40% 2065 18.20%Grand Portage 33114 35.00 1457 3.77 Baudette 23123 36.76 615 11.82 Warroad 17240 24.44 745 -19.11 NORTH DAKOTAPembina 40366 21.91 15897 6.58 Portal 11936 24.79 7187 13.18 Neche 5298 9.17 1619 - 0.74 Dunseith 11264 18.67 2217 3.31 Walhalla 4822 25.57 1156 -21.57 Noonan 4222 16.50 572 1.24

AIRLINE BOARDINGS

Minneapolis-St. Paul 1,590,055 - 1.23%Fargo 34,615 - 4.04% Sioux Falls 33,573 4.60%Rapid City 36,332 9.50%Bismarck 19,317 12.73% Duluth 15,273 17.18%Grand Forks 11,032 24.49%Minot 9,609 32.03%

Source: Bank of Canada Data provided by Kingsbury Applied Economics

7/27/10 8/26/09 8/26/10

U.S. to Canadian Dollar $1.0357 or $0.9655 $1.0991 or $0.9098 $1.0546 or $0.9482

U.S. to Euro $0.7703 or $1.2983 $0.7028 or $1.4229 $0.79 or $1.2716

U.S. to Chinese Yuan $6.7781 or $0.1475 $6.8310 or $0.1464 $6.7995 or $0.1471

U.S. to Japanese Yen $87.920 or $0.0114 $94.262 or $0.0106 $84.6388 or $0.01182

U.S. to Mexican Peso $12.66 or $0.07901 $13.16 or $0.07598 $12.98 or $0.07706

JULY 2010 % CHANGE/JULY 2009

NORTH DAKOTAis our classroom.ENERGY EDUCATIONis our mission.

The School of Engineering and Mines at the University of North Dakotacontinues to be a world leader in energy-related education and research.

THREE NEW DEGREES ...• the Bachelor of Science in Petroleum Engineering,• the Master of Science in Energy Engineering, and• a customizable Ph.D. in Chemical Engineering

... join our Ph.D. in Engineering with an energy track to create a strong academic focus on energy. Infact, the Master of Science in Energy Engineering is the nation’s first graduate degree in sustainableenergy engineering. The UND School of Engineering and Mines is responding to the needs of the stateby providing education and research to support development in the Bakken Formation in western NorthDakota, as well as in other traditional and alternative forms of energy.

The UND Petroleum Research, Education and Entrepreneurship CenterHosted by the School of Engineering and Mines, the Center seeks to:

• Improve our understanding of the petroleum geology, geophysics and engineering of theWillistonBasin;

• Develop enhanced recovery techniques for the Bakken Formation;• Develop techniques for carbon dioxide sequestration in theWilliston Basin;• Develop engineering-enhanced geothermal systems using oil field waters to generate electricalpower;

• Address environmental and policy issues of petroleum production; and• Help entrepreneurs develop new businesses and industry.

The Center’s educational mission will be to train UND students and industry professionals to meet thechallenges of these focus areas and in the special techniques for extracting oil from the Bakken Formation.

Creative. Innovative. Entrepreneurial. Spirited.

www.und.edu / www.engineering.und.edu / 701-777-3411AN EQUAL OPPORTUNITY/AFFIRMATIVE ACTION INSTITUTION

Building A Strong America®

Our North Dakota roots are strong, and their reach is long.

MDU Resources Group’s diversified businesses operate across most of the United States,helping build a strong American infrastructure.

• We provide natural gas, oil and electricity that power business, industry and our daily lives.

• We provide pipes and wires that connect our homes, factories, offices and stores to bringthem to life.

• We build the transportation network of roads, highways and airports that keeps oureconomy moving.

We are proud to be a Fortune 500 company, and the largest publicly traded businessheadquartered in the four-state region of North Dakota, South Dakota, Montana andWyoming.

Montana-Dakota Utilities Co. • Great Plains Natural Gas Co.• Cascade Natural Gas Corporation • Intermountain Gas Company• WBI Holdings, Inc. • Fidelity Exploration & Production Company

• Williston Basin Interstate Pipeline Company • Bitter CreekPipelines, LLC • Total Corrosion Solutions, Inc. • Knife River

Corporation • MDU Construction Services Group, Inc.

1200 West Century Ave., Bismarck, ND | www.mdu.com