Damage amount

not yet determined

By KURT NESBITT

Journal Staff Writer

NEW ULM -- The consequences of Wednesday's damaging fire at the AMPI butter plant remain uncertain, officials of Associated Milk Producers, Inc. said Thursday.

Decisions on rebuilding and employees will come after further examination of the damage to the facility.

The dollar value of the damage done by the fire hasn't been determined and probably won't be for a while, they said.

The AMPI plant, which both produces butter and serves as a way station for milk, caught fire around 6 p.m. Wednesday. Firefighters from New Ulm and surrounding towns fought the blaze until early Thursday morning.

The blaze demolished two large coolers used to chill the butter made at the plant, effectively shutting down the plant's entire butter operation. Those coolers comprised about one fourth of the 90,000-square foot facility. The fire also destroyed an older portion of the building's roof.

The plant employs 180 people and produces millions of pounds of butter every month. The butter is packaged using different brand names. It is one of New Ulm's largest employers. The plant is located one block from New Ulm's downtown business district.

The fire shocked and scared many AMPI plant employees like Jane Brown, who has worked in the butter-packaging operation for nearly 30 years. Brown was one of the 30 people who were working a 6 p.m. to 6 a.m. shift at the time the fire started. She said she's waiting to hear the official word on the future of her job. A meeting for plant employees is planned for Sunday, she said.

"It was unbelievable," Brown said from her home in New Ulm Thursday afternoon. "It was like a family down there. You'd see some people just as much as you'd see your own family."

Another AMPI employee of four years, who declined to give his name, said the fire could not have happened at a worse time. He predicted a ripple effect on the local economy because many AMPI employees shop in New Ulm, particularly around the holidays. He also expressed concerns that AMPI might not rebuild the New Ulm plant or may move the operation to another part of the state or the country.

"Obviously, there are a whole lot of people that are out of work," said AMPI General Manager Mark Furth. "The number of affected people is in the vicinity of 130 people. Whether or not the impact will be long-term will depend upon the length of time it will take to get the plant back up and running. Certainly, that's what we want to do."

Despite heavy damage and the possibility of layoffs, the dark clouds of Wednesday may have a silver lining. The plant's milk receiving operation, which shares the same space but operates separately from the butter operation, was undamaged in the fire.

The portion of the plant that packages the butter received heavy amounts of soot. However, much of the packaging machinery appears to be in very good shape, according to plant manager Bill Swan.

"From what we've looked at so far, it's in surprisingly good shape. It was very encouraging at that point," he said.

Furth said that because the operation is the co-op's only butter operation, AMPI isn't likely to fold the New Ulm plant into another plant. But he also emphasized that a decision on the plant's fate will rest heavily on the cost of the damage and the amount of insurance coverage.

"The bulk of the damage was obviously done to the coolers, which is the easiest thing to fix. That's got to be a positive. When you operate a plant like this, bricks and mortar are a small part of your business. The largest parts are your customers and your employees. We have a 35-year reputation in the butter business and that's a strong reason to rebuild," Furth said.

Furth and Swan said they can't give meaningful numbers on the total value of the damage to the plant, although 3 million pounds of butter was inside the building at the time of the fire. While part of that butter was burned, some of it is intact. Furth said it's too soon to know how much is salvageable. He said it's also hard to put a dollar amount on the physical damage to the plant.

"The butter side of the operation is down," he said. "Period, period, period."

Furth said that some employees could be back at work helping with the cleanup within days -- provided that the building is safe.

Swan said a great amount of butter is still on the plant's floor and was floating in water with debris from the fire. The butter and the debris will have to be removed before the production machinery can be accessed.

Furth said he is unsure how the fire will affect butter prices, but he was certain that it won't impact farmers' abilities to market their milk.

The fiscal impact of the fire is harder to assess.

"I think it's safe to say that this is going to be a setback -- how serious we don't know," Furth said, adding that the New Ulm plant is one of 13 AMPI plants across five states. "This is a challenge to us in the butter business, but butter is just one AMPI business. We're actually larger in cheese than in butter."

He said that while the fire is significant to New Ulm, the amount of butter lost "is very insignificant to the totality of the butter business. It's a small part of the total industry inventory, so it shouldn't have an impact on price."

In the meantime, AMPI is buying butter from its competitors to avoid an interruption in services to its customers. Furth said he is confident that AMPI will be able to meet the need "without too much more than a hiccup."

In addition to assessing the damage to their plant, AMPI officials met with state, local and county officials Thursday to coordinate cleanup efforts for the butter that oozed from the plant. Several agencies have assisted AMPI with the clean-up, including the Minnesota Pollution Control Agency.

According to Nancy Miller, information officer for the MPCA, cleanup will center on the AMPI plant.

Co-op officials will assume most of the responsibility for that effort. The majority of the butter that seeped down Second North Street from the plant was contained by sand berms at the base of the hill on that street. Although some butter and contaminated water found its way into city storm sewers and ultimately wound up in the Minnesota River, it poses no threat to the river at current temperatures, Miller said.

Ice flows in the river hampered efforts to contain the butter flow using floating booms. Temperatures kept the butter in a mostly solid state. An MPCA helicopter spotted pockets of butter chunks at spots along the river Thursday morning.

Brown County Solid Waste Manager Jane Starz said cleanup will start with removal of the street sand berms and the butter. It will continue with removal of building debris, all of which will go to the Brown County landfill near Essig.

The Center Street plant is one of the original AMPI plants. The co-op, which was formed in 1969, developed from the New Ulm Farmer's Co-op Creamery, which expanded and opened the Center Street building in 1951.

The blaze was the first fire at the plant. An acid spill at the plant in 1995 forced the evacuation of the 20 employees who were working inside at the time.

Wednesday's fire was also one of the largest in New Ulm's history. In 1993, a fire consumed two-thirds of the Garden Terrace apartment building.