JOBZ As Seen by QPP

1
JOBZ As Seen by QPP

• QUALITY PORK PROCESSORS, INC.
• Austin, MN

2
Quality Pork Processors History

• Started in 1989, leased facility from Hormel
  corporation
• One shift operation processed 5,000 hogs daily
• In 1990, two shift operation
• Processed 10,000 12,000 hogs daily
• In 1995 had a 25 million expansion
• Processed 16,000 hogs daily
• In 2004 had a 5 million expansion
• Currently processes 18,000 hogs daily

3
Services provided to Hormel

• Slaughter capacity 18,000 hogs daily
• Boning primary cuts 2-3 million pounds weekly
• Package fresh cuts to retail
• Run 70 of Hormels Always Tender branded pork

4
Further expansion

• Present facility at maximum capacity
• No more electrical capacity
• Limited physical space
• Sewage capacity at maximum
• Hormel would like more product lines and services
• Capacity of single piece packaging
• Large volume of boneless product
• Case Ready capabilities
• More pork rib conversion capabilities

5
Off site location

• Search began 3 years ago. Four locations have
  been researched
• Albert Lea, MN
• Clear Lake, IA
• Mason City, IA
• Austin, MN

6
Why Albert Lea location

• Location
• Labor pool
• Attitude

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Hormel/Quality Pork Processors
200 new jobs 70,000 s.f facility 12 million
investment Annual Sales of 70 million 11.17
acres of land Northaire Industrial Park
8
JOBZ impact

• Was not the primary motivator
• The need of growing business was the primary
  motivator
• The program helped for the partnership between
  QPP and Hormel
• The benefits created a win/win for both companies
• Pushed up timeline of project to gain benefits of
  JOBZ
• Take full advantage of 12 year window
• Tipped the location towards MN vs. IA

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Downside of JOBZ

• Prevailing wage issue
• 6 savings versus 20 increase in cost
• To rigid for local government
• State needs to help local government make
  eligibility decisions to help keep out local
  politics
• 12 years or nothing, local government should be
  allowed to determine window up to 12 years

10
Upside of JOBZ

• Relative to other state programs, requirements
  are fairly straight forward
• Exemptions are immediate, not a rebate program
• Easy to stay eligible throughout the term of the
  program

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Summary

• JOBZ is a great program to address current
  business needs
• Savings immediate, refunds not involved
• Once qualifying requirements are clear
• A lot of the success depends on local government
• Determining guidelines for who is qualified needs
  to be clearer
• Need to avoid local politics

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JOBZ As Seen by QPP

• QUALITY PORK PROCESSORS, INC.
• Austin, MN