Butter business booming at AMPI
A spectacular fire destroyed much of the AMPI plant 5 years agoBy Kevin Sweeney Journal Editor and Fritz Busch Staff Writer
Article Photos
NEW ULM - It was a fire New Ulm will long remember.
Five years ago today, a spark in the butter storage warehouse at Associated Milk Producers, Inc.'s butter plant in New Ulm touched off a perfect storm of a fire, a fire involving 1 million pounds of butter out of three million stored in the plant.
It was a fire that challenged the capabilities of the New Ulm Fire Department and assisting fire departments, which weren't well equipped to handle what turned into a giant grease fire.
It was a fire that threatened the jobs of the 180 employees who worked at the plant, and it presented challenges and difficult decisions over the next several months to the AMPI management on how to meet their customers' needs, how to clean up and restore equipment, and indeed, whether to stay in the butter business at all.
It was a fire that captured the imagination of people throughout the country, especially when some early news reports erroneously described rivers of molten butter flowing through the streets of New Ulm and into the Minnesota River. In fact, very little butter escaped the plant. The New Ulm street department quickly blocked off storm sewer inlets, and what little butter did seep through some drains in the plant quickly solidified in the cold December air. So little butter made it to the river that the EPA and Minnesota Pollution Control Agency quickly signed off and said there was no problem.
AMPI's board of directors decided to stay in the butter business, rebuilt the plant and today is producing more butter than ever.
Ed Welch, president and CEO of AMPI today, was Director of Operations for AMPI five years ago.
"I had forgotten it was the anniversary until you reminded me," he said Monday. "It's not the kind of anniversary you want to remember."
Welch had gone home and was playing basketball when he got the word from another AMPI employee, Dave Hanson, that there was a fire in the plant.
Welch remembers that the fire looked under control for a while. The New Ulm Fire Department had knocked it down and it looked like it was subsiding, but then the melted butter caught fire.
"It was obvious they weren't going to get it out very easy after that."
From attack
to defense
New Ulm firefighter Paul Macho said he arrived at the Associated Milk Producers (AMPI) butter plant on Center Street at little after 6 p.m., on Dec. 1, 2004.
"By the time we pulled up, there was fire through the roof," Macho said. "We called for mutual aid from Courtland, Lafayette and Sleepy Eye (fire departments).
"I was fighting it up by the plant when it really got hot," Macho added. "We were in attack mode for about an hour before butter really started burning and we went into defensive mode."
The fire required help from other city departments, businesses and state agencies who quickly answered the call.
"There was butter flowing all over the place. It was everywhere," Macho said.
About a dozen New Ulm Street Department workers, M R Paving and Excavating, Inc., and the Minnesota Pollution Control Agency (MPCA) quickly responded.
The MPCA called a private contractor to bring in a boom to help catch hot oil emanating from burning butter.
Macho said firefighters and everyone else called to the scene battled the blaze until New Ulm Fire Chief Curt Curry declared the fire under control at about 4:30 a.m. the next morning.
Meanwhile, butter rolled downhill toward the Minnesota River.
Firefighters stayed on the scene into the next morning.
New Ulm Street Commissioner Tom Patterson said he and his workers got to the fire at about 8 p.m.
They spent the next 12 hours trying to keep the fire, butter and oil from spreading.
"It was quite a night for sure, but things went pretty well given what we had to do," Patterson said. "I can't say enough about the fire department. They were fabulous."
Patterson said the MPCA called everyone who fought the fire "environmental heroes since only a small amount of butter got into the river."
Bulldozers, an excavator and other heavy equipment scooped up the butter that Patterson said looked like "gray mud."
Street crews sanded streets after ice formed from mist generated from fire fighting efforts.
"It was truly a multi-task operation," Patterson added.
Four options
Once the fire was out, "that was when the real work started" for the AMPI management, said Welch.
There were four options, said Welch. First, whether to get out of the butter business entirely. AMPI had 13 other plants, though New Ulm was the only butter plant, AMPI wasn't dependent on butter production.
If rebuilding was the option, should it rebuild in New Ulm at the old plant site, or move it somewhere else in town? Finally, it could move the butter operation to some other AMPI plant, like the Glencoe plant that was standing empty.
"We considered all four options," said Welch. AMPI is a cooperative, owned by the farmers it serves, and the board of directors felt butter had been good for AMPI, and decided to rebuild.
"Rebuilding in New Ulm was the first choice," said Welch
The big factor in the decision to rebuild was the people who worked at the butter plant.
"We have a talented bunch of employees," said Welch. "Butter equipment is unique, and our maintenance crew knows how to keep it working."
It was also determined that most of the packaging equipment, as sooty and grimy as it looked, was largely undamaged.
"What was interesting was the next morning when we went through, everything was black of course, but the butter cups in the packing area were still butter. The butter hadn't melted.
"When we saw that, we realized that the heat on the packaging equipment wasn't as intense as on the other part of the fire, because the packaging equipment is all steel, and if it gets too hot it gets warped.
"We only lost, I believe, only three packaging lines out of 12 to 15," said Welch.
So rebuilding in New Ulm was determined to be the quickest and best option.
The Sunday after the fire, AMPI had a meeting with its employees, who were concerned about their jobs and their paychecks just a few weeks before Christmas. AMPI had met with its insurance company, and the insurance company gave AMPI the OK to use its own employees for cleaning and restoring equipment. Many of the employees were back at work in January working on the cleanup and restoration.
The city of New Ulm rallied around the AMPI employees. An employee benefit fund was established, and thousands of dollars were raised and distributed to help the employees.
A couple of production lines were set up in a nearby building to get some product going out to AMPI customers.
With the warehouse section of the plant destroyed, and much of the production area damaged, AMPI took the rebuilding opportunity to redesign its floor plan, said Welch. The same number of machines and lines were in use, but they were placed in different spots to make the production processes more efficient. The plant's mechanical systems and condensers were also moved into a separate area.
Within a year of the fire, AMPI was able to celebrate its grand reopening, with a special visit from Gov. Tim Pawlenty. The total reconstruction was finished a few months later, at a total cost of $14 million. In all, AMPI's insurance claim was $20 million to cover the cost of reconstruction, lost inventory and other items.
Brian Tohal, New Ulm's Economic Development Coordinator, remembers the uncertainty after the fire involving the city's sixth largest employer. "Whatever decision they made was going to have a big impact on New Ulm.
The city and New Ulm EDC assisted as much as it could, helping with government grant and loan applications. AMPI qualified for some JOBZ tax exemptions and credits, and helped gain a $300,000 Minnesota Investment Fund low cost loan, and a $200,000 New Ulm Revolving Fund loan.
Booming business
With the rebuilding, AMPI's butter business has been booming. After a low production year in 2005, when the plant was basically out of business for the first quarter, AMPI has recovered all of its customers, and has seen its annual production jump - 31 percent in 2006 over 2005; 11.5 percent in 2007, 6 percent in 2008 and an estimated 3 percent in 2009. AMPI is looking at close to 130 million pounds in production. Considering that AMPI packages most of its butter for the consumer in 1-pound blocks, quarter-pound sticks and "continentals," the foil-wrapped, one-pat servings you see in restaurants, that's a lot of pats going out the door.
With that, and with 13 other plants to run, AMPI is busy looking ahead, said Welch.
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12-01-09 6:39 PM
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Fire department from New Ulm and other communties did a great job on this fire all should be proud of a job well done
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HopeMaria
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12-01-09 8:59 AM
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Sorry - seems like
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HopeMaria
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12-01-09 8:57 AM
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Wow. I can't believe it's been five years....semms like yesterday.
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