Nexyst moving forward on $40 million agricultural distribution project in Willmar Industrial Park
Nexyst plans to close on a $1.1 million purchase agreement for at least 137 acres in the Willmar Industrial Park to construct an agricultural distribution complex.
WILLMAR — Nexyst, in the next 60 days, plans to close on a $1.1 million purchase agreement for at least 137 acres in the Willmar Industrial Park to accommodate a $40 million project — constructing an agricultural distribution complex — according to Aaron Backman, executive director of the Kandiyohi County and City of Willmar Economic Development Commission.
“This is kind of an exciting development,” he said as he shared a site plan with Planning Commission members on Nov. 16.
The project would be an intermodal hub that would tie into the recently completed $48 million Willmar Wye railroad bypass project. An intermodal hub is a central location where cargo containers can be easily and quickly transferred between trucks and trains.
“This intermodal transportation complex would facilitate unit train loading; would facilitate transloading, bulk storage, trucking and other services,” Backman explained. “There is nothing quite like this in the area here; you would have to go down to Omaha or St. Paul or other locations farther afield.”
Transloading, also known as cross-docking, is the transfer of goods from one mode of transportation to another en route to their ultimate destination.
The project site is north of Minnesota Highway 40 and west of the new FedEx distribution center. Temporary access for studies was granted in April, and the Willmar City Council has also approved a letter of intent for the sale of the land.
The money from the purchase of the land would go to the Industrial Park Fund, Backman noted.
Nexyst, which was recently acquired by Minneapolis-based holding company Realm5, moves crops from field to consumer by using a network of specialized containers that allow buyers and consumers to know exactly where the food was produced, according to the Nexyst website.
Farmers load their crops into a NexBox, a smart container that stores the crop and also captures all the crop data, according to the website. The container is tracked and monitored for air quality until delivery to a final buyer.
The full NexBox first goes to a NexPad, a regional site where the boxes can be stored before being shipped out using rail, the website says.
At the NexPad, which will be built to store 15,000 of the smart containers at a time, the filled boxes will be graded, sealed, dried if needed and stored until shipment. NexPads will also be where NexBoxes are repaired, cleaned and stored empty until needed, according to the website.
The Willmar location for Nexyst will be its regional transportation hub, known as the Realm5 Logistics Park, to which everything will be transported and then loaded onto rail and shipped to where it needs to go, such as the port in Duluth.
“Literally, if (Nexyst) wanted to have just volume, they could get everything they need within Kandiyohi County, literally,” Backman said. “But, they have a number of customers in Minnesota, northern Iowa, South Dakota, that want to use their services because they can save transportation costs and they can go faster. So, I suspect, we are going to see a number of people that want to jump on the train, so to speak, and utilize their services.”
The project would include a railway loop with railway spurs, at least two buildings — one of which would be larger than the FedEx facility — grain storage facilities and other amenities, he added.
“In terms of the rail, there’s about 3.6 miles of rail here that would tie into the Wye,” Backman said, noting BNSF Railway is aware of the project. “We’ve invested a lot of money in — both as a state and on the private side — setting up this Wye, now let’s use it. This is, I think, a good utilization of it.”
The loops of the railway through the project would be privately owned, but it would be the city's responsibility to construct the spurs, which would be available for public use for other industrial park businesses, according to Backman. It is yet to be determined what fees or agreements would be in place for those businesses who would like to use the spurs.
“I’ve made it clear to the end user, we are not going to have a rail spur that will only serve one user,” Backman noted. “I want to make sure that we have the ability to serve more than one user for the rail.”
The rail spurs will be located near the decommissioned airport runway, which Nexyst plans to use as a staging area for the storage units that will be loaded onto trains, according to Backman.
At full buildout, the site is expected to accommodate 436 vehicle trips per day and operate 24 hours per day, seven days a week, he added. When the project is complete, it is expected to employ roughly 58 people, he said.
Backman learned on Friday, Nov. 18, that a $900,000 Transportation Economic Development grant from the Minnesota Department of Transportation was approved to fund improvements to Minnesota Highway 40 to facilitate the traffic needs. The highway will be upgraded with turn lanes and acceleration lanes, according to Backman.
He noted the project would also potentially allow for the extension of Willmar Avenue to Highway 40 through the industrial park, which would then would allow for more than one access point to the project area.
“I think (Nexyst is) on the cusp of some very, very unique things that are going to change a number of industries,” Backman told the Planning Commission. “For instance, their environmentally-tracked containers can be shipped on rail from the farm all the way to the end user. They don’t have to go to elevators, they don’t have to go to other ports.”
Backman also gave examples of how Nexyst is on the cutting edge of transporting agricultural products throughout the world.
This summer, the company shipped 200 containers of red kidney beans from the Duluth port to Belgium and Italy.
Recently, a cooperative in Volga, South Dakota, that grows specialized, high-protein soybeans was having problems shipping its product to Norway from ports on the East Coast. It was taking 80 to 150 days to ship from Volga to Norway.
“Sometimes they have to wait at ports, sometimes they have to be moved several times,” Backman said. “(Nexyst) just did a shipment that went from Volga all the way to Norway — 27 days. 27 days. Less than one-fifth the time. And, if anybody has looked at the price of diesel lately, it’s diverging between gasoline and diesel right now.”
He noted that diesel stocks in the U.S. are the lowest they have been since 1951, and said, "There’s going to be a crunch, I don’t think people realize it, for shippers, trucking, and for farming."
“If you can save fuel, if you can get there faster, that is a real plus,” Backman added. “They can load the trains, they can ship it to Duluth, they don’t have to go to the east coast.”