Hilmar Cheese to build new plant in Turlock

01/16/2014 8:57 AM

01/16/2014 9:09 PM

The Hilmar Cheese Co. will invest $75 million to $100 million to build a milk powder processing plant in Turlock, the company announced Thursday. The plant is expected to create 40 full-time jobs, plus expand opportunities for dairies and related industries in Stanislaus and Merced counties.

“It will have a very substantial economic multiplier effect on this region,” Turlock Mayor John Lazar said. “For many years, we’ve been encouraging Hilmar Cheese to move into Turlock.”

Construction will begin this summer. The facility is expected to open during summer of 2015 in the Turlock Regional Business Park (formerly known as the Westside Industrial Specific Plan). It will be near the new Blue Diamond Growers almond processing plant.

Hilmar Cheese had about $2 billion in sales in 2012, and it will continue to produce 42 types of cheese products at its Hilmar and Dalhart, Texas, processing facilities. The Turlock plant will enable it to enter the powdered milk market.

“We are expanding our ingredients business to meet strong global demand for milk powders,” said John Jeter, Hilmar Cheese’s chief executive officer and president. “The U.S. dairy industry, and specifically California, is well positioned to be a consistent supplier to the world.”

About 50 tanker trucks filled with milk are expected to roll into the Turlock facility every day. That milk will come primarily from Stanislaus and Merced dairies.

The plant’s specialty equipment will remove all the water from the milk. The company already uses a similar drying process in producing concentrated whey and lactose products.

Jeter said the Turlock facility will produce milk powders designed to be a primary source of nutrition for developing nations.

Dehydrated milk does not require refrigeration, which makes it easier to transport and store than regular milk. The powder can be turned back into liquid milk by adding water.

“With this expansion into milk powders, we are continuing our tradition of converting our high-quality milk supply into the value-added products customers want,” said Tom Ielmini, vice president of Hilmar Cheese’s ingredient division.

The powdered milk will be trucked to the Port of Oakland, then shipped around the globe.

“We now have customers in 50 countries and are always striving to meet their needs,” Ielmini said. “This is part of a broader plan to be a larger, more dynamic global supplier.”

Hilmar Cheese reportedly closed escrow this week on a 23-acre land purchase in the Turlock business park. The purchase price was not disclosed.

The company’s name also was kept secret during the city’s recently completed permitting process. Previously, that property was given the go-ahead for construction of a dairy processing plant, which had been proposed by the Vierra family, the industrial site’s landowner.

Commercial real estate broker Eric Gonsalves of Brownstone Equities said that after the final approvals were secured, the land was sold to Hilmar Cheese. He said it’s the perfect site for the plant because it’s close to Highway 99.

“The city has already put in the water and sewer lines around these sites,” said Gonsalves, noting that’s important to companies looking to expand. He praised Turlock officials for being easy to work with.

City Manager Roy Wasden said Turlock had to compete with other communities to attract the Hilmar Cheese project, but he assured that the city did not give the company any special financial incentives or fee breaks to close the deal. “We just provide great customer service,” Wasden said about Turlock’s recent success in attracting manufacturers. “And we have very good options for businesses to consider.”

Jeter said Turlock’s city staff was excellent to work with: “This is a great example of how effective business and government can be when we work closely together.”

The state governor’s Office of Business and Economic Development assisted with site selection.

The plant is being designed by the cheese company’s engineering staff. The construction firms have not been announced.

Hilmar Cheese was founded in 1984 by 11 of the region’s dairy families. The company has more than 1,200 employees, including more than 860 in Hilmar, which is about four miles south of Turlock. It opened a second processing facility in Texas in 2007.

The 40 jobs being created in Turlock will be “good-paying technical positions with benefits,” said company spokeswoman Denise Skidmore.

All staff openings are posted on the Hilmar Cheese website, and Skidmore said the company “is continually growing.” In 2012, for example, it added 147 positions, and there are 16 jobs open. “Some of these jobs require very specific training,” Skidmore said. “We encourage people to apply for the jobs they have the skills to do.”

Besides jobs at the new plant, Skidmore said some of the dairies that will supply milk for the plant could expand their staffs to meet the increased demand. Local dairies daily send about 230 tanker trucks filled with milk to Hilmar, so adding 50 more tanks will expand deliveries by nearly 22 percent.

“This (Turlock) investment will provide the family dairy farms that supply us milk the opportunity to grow. It allows us to develop new relationships with dairy farmers who produce high-quality milk in this region,” said Richard Clauss, one of the company’s founding owners and chairman of its board of directors. “This project will help strengthen the California dairy industry and provide a nutritious product to serve customer needs.”

Skidmore said assorted local suppliers and businesses, such as trucking firms, also could add jobs because of the plant. Simply building the facility, she said, should provide a “huge boom” for the construction trades. “This definitely is a job creator all the way around,” Skidmore said.

Turlock’s mayor agreed. Lazar also praised the company for its “strong commitment to the environment.”

The Turlock facility will use a technologically advanced manufacturing process to capture the water in milk for reuse. That water will get a preliminary treatment before going to the Turlock Regional Water Quality Control facility, which expects to use it for agricultural irrigation.

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