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Eurofins Scientific to expand headquarters here

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Less than four years after relocating its U.S. headquarters from Memphis, Tenn., to Des Moines, Eurofins Scientific Inc. is moving forward with plans to establish a permanent headquarters facility here that is expected to be completed by next spring.

The Belgium-based global food-testing company anticipates significant growth in the United States, particularly as Congress is now considering legislation that would strengthen U.S. food-safety requirements and increase demand for the types of analytical services that it provides.

Eurofins U.S., which also includes laboratories in California, Colorado, Louisiana, Maryland, Michigan, New Jersey and Virginia, is part of a global company with $800 million in annual revenues and 7,000 employees across 150 sites in 29 countries.

Now Eurofins plans to purchase a building at 2200 Rittenhouse St. in Airport Commerce Park West and by September expects to begin converting approximately 60,000 square feet of vacant space into laboratories and offices. The $10.6 million renovation project will enable the company to consolidate its Des Moines operations from two locations into one while providing space for future expansion, said Michael Russell, CEO of Eurofins’ U.S. food division.

“It’s a nice-looking facility, and it’s going to suit us very well,” said Russell, who moved to Greater Des Moines last fall from New Orleans, where Eurofins operates laboratory facilities. “What we really liked inside is that it’s mostly open, so we don’t have to do a lot of demolition.” The company’s U.S. headquarters now employs 110 people in leased laboratory and office space at 6100 Thornton Ave. in Airport Commerce Park West in Des Moines and at laboratory facilities at 3507 Delaware Ave.

The Des Moines headquarters won’t see any immediate influx of personnel or equipment, as the majority of scientists and technicians already have been hired over the past few years and millions of dollars have been invested in equipment that will move to the new facility, he said. And a shift in the company’s strategy toward keeping its laboratories decentralized means the Des Moines headquarters won’t house the “mega-laboratory” that was originally planned.

The company had envisioned a 100,000-square-foot headquarters complex, occupying 50,000 square feet initially with 50,000 square feet of expansion space next to it.

“When the decision was made to close Memphis and move the food operations here, the general idea was that we could build a mega-laboratory here and maybe not close all the other laboratories, but significantly downsize them,” Russell said. “But as that question was actually translated from idea to operations, it became clear that that would not work. As we do acquisitions, there may be a very strong reason for leaving (the acquired) company intact where it is.”

Additionally, Eurofins’ acquisition in early June of Strasburger & Siegel Inc., a Maryland-based food-testing laboratory, means Eurofins won’t base its emerging U.S. food audit division in Des Moines as it had originally planned, he said. “They had an existing food consulting business in place; we said it doesn’t make sense to pick that up and move it here,” he said. “We’re just going to augment theirs at that location.”

In most instances, Eurofins will try to consolidate many of the same kinds of tests into one laboratory to gain efficiencies and have that laboratory be the expert in that type of analysis, Russell said.

“We are going to rely on a very strong (information technology) system to bring all of that data back to the sample point to give it to the customer,” he said. “To the customer, this is going to be a seamless operation. They give it to any of the Eurofins laboratories, and behind the door we disperse that sample to whichever laboratories are required.”

Widely publicized outbreaks of food-borne illnesses in the past couple of years, significant technological improvements in food-testing equipment and a push for more transparency in the food chain are trends that are reshaping the global food industry, Russell said.

“You’re seeing the (U.S. Food and Drug Administration) being pushed to do more, and they really can’t, so more third-party laboratories will be involved,” he said. “You’re seeing retailers such as Wal-Mart saying, ‘Before you can become a food vendor for us, you have to become a certified vendor.’ The criteria they’re using is SQF – Safe Quality Food – an international standard.”

The increased focus on food safety, made possible by highly sophisticated instruments that enable foods to be tested for contaminants at the parts per billion level, also has caused Eurofins to change significantly, he said.

“In the past few years, we have changed from a seed laboratory focused on high throughput to a much more sophisticated food-testing laboratory, very skilled in analytical ability and very deep in our instrumentation capability and with the ability now to offer these certified audits of companies,” he said.

Eurofins’ decision to remain in Des Moines was cemented by an economic development package approved last month by the Grow Iowa Values Fund board of directors. The board approved a $200,000 grant from the Community Economic Betterment Account for the project, on top of $685,000 from the city of Des Moines. The city will provide the bulk of those funds, $500,000, as a forgivable loan against the tax increment finance district funds accrued from the building.

The economic development package was an important factor in the company’s decision, Russell said.

“There is very strong competition between various geographic locales to bring business in,” he said. “In point of fact, we have an existing facility just outside Washington, D.C., and one outside Kalamazoo, Mich., that were strongly considered as locations. So the fact that Iowa and Des Moines showed a lot of interest in keeping us here – they were very cooperative and helpful – it just made sense to continue here.”