Kemin: Expand labs first, then headquarters

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When the heavy equipment breaks ground at Kemin Industries Inc.’s East Side campus this spring, it will be to expand the company’s laboratory space rather than to begin construction on a new administration building as originally planned.

To address a “really serious shortage of laboratory space,” Kemin has added $2 million to the scope of its planned research and development building expansion and has moved that project ahead of its plans for a new administration building, said Chris Nelson, Kemin’s president. Work on the planned 43,000-square-foot administration building, to be built just east of the current office building, will follow in spring 2007, he said.

“Our laboratories and manufacturing are really what make our business go,” said Nelson. “Offices come last in priority.” The company plans to invest more than $19 million in buildings, equipment and additional working capital for the expansion projects at its Maury Street campus.

On Dec. 5 the Des Moines City Council approved its portion of a $4.5 million economic development incentive package it’s offering in conjunction with the Iowa Department of Economic Development, Des Moines Area Community College and Polk County. Those incentives, which include a $800,000 tax abatement and a $280,000 forgivable loan from the city, require Kemin to create at least 40 new high-paying jobs over the next five years.

“Some of those positions are already slotted in our 2007 budget,” Nelson said. “I anticipate we will significantly exceed that 40-employee minimum. In every (previous) incentive, we’ve been able to exceed the minimum that we’ve guaranteed.” The types of positions created will be “across the spectrum of Kemin’s disciplines,” he said.

With annual sales of about $190 million, the Des Moines-based nutritional ingredient manufacturer employs more than 900 people worldwide in 12 autonomous subsidiaries. About 200 of its employees work in Des Moines.

In addition to adding space onto the west end of the laboratory building, next year’s project calls for a renovation of individual offices and small labs into an open floor plan, said Terri St. Peter, a project manager with Kemin Health who is coordinating the project.

“We hope to gain 30 percent more lab space by doing that,” she said. “We’re hoping to also foster more cooperation between the scientists of the various companies within Kemin Industries that share this lab space, so they can collaborate when they talk about their experiments. We’re hoping to get a lot more synergy between the groups.” Currently, 39 scientists use the building, which will have space for about 60 when it’s completed.

The expansion also allows Kemin to enlarge its pilot laboratory facility, which it uses to test new chemicals on a small scale prior to taking them into production, Nelson said.

On the manufacturing side, Kemin plans in 2006 to invest $1.5 million to add two “critical” pieces of equipment used in its proprietary process for producing lutein, a dietary supplement that reduces the risk of developing macular degeneration, a progressive disease that eventually leads to blindness. With the additional equipment, the company will be able to increase its production of lutein by 30 to 40 percent, Nelson said. Kemin recently defended two key patents it holds on the processes used to extract lutein from plants, which expire in 2010 and 2011.

After its new administration building is completed, the company plans to move the 50 to 60 employees who work in rented office space on East Court Avenue to the new building.

Nelson said the company has seen some success with its Sell Des Moines program, a national recruiting initiative it began earlier this year. “We’ve been able to recruit a number of people to Des Moines,” he said.

“There’s no doubt the big housing price bubbles on both coasts have helped,” he added. “You can still get very reasonable housing here, the schools remain a draw, and the downtown renaissance has been a big selling point.”