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Sunday, 03 March 2013 22:00

Zeeland Farm Services: 2013 ACG-Western Michigan Outstanding Growth Award Winner

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Brothers Cliff, left, and Robb Meeuwsen, right, show off some of Zeeland Farm Services’ soybean oil products, sold under the Zoye name. Brothers Cliff, left, and Robb Meeuwsen, right, show off some of Zeeland Farm Services’ soybean oil products, sold under the Zoye name. PHOTO: JEFF HAGE

From its humble roots in 1950 as a one-man trucking operation, Zeeland Farm Services Inc. has evolved into an agribusiness enterprise with a global reach.

While the family-owned Zeeland Farm Services remains in the transportation business, the company grew by expanding into the food processing and fuels industries.

Founder Robert Meeuwsen operated his company, Meeuwsen Produce and Grain, out of his home north of Zeeland, hauling vegetables, shrubbery, fruits and other products using a truck he bought from his father. Among his customers was the H.J. Heinz pickle plant in Holland.

From that start, he steadily built up his company, adding trucks and employees over the years, before selling to his three sons 21 years ago. They, in turn, advanced the company further by taking a substantial risk in the mid-1990s by developing what remains Michigan’s largest processing plant for soybeans. They also launched ventures that now extend the reach of Zeeland Farm Services Inc. globally through agricultural exports.

Every step of the way, Zeeland Farm Services’ strategy behind each move was to have the business take the next step.

“You have to find the best way to market your products and you have to market them all the way down the line, as far as you can. It’s the only way you’re ever going to develop any kind of a market,” said Cliff Meeuwsen, CEO of Zeeland Farm Services. “Then it gives you the whole country, plus the rest of the world.”

Through its divisions, Zeeland Farm Services today processes corn and soybeans, refines soybean oil, and transports grain and feed to dairy and livestock farmers. The company now has 80 trucks on the road and employs 350 people.

The Zeeland Farm Soya plant processes some 900 tons of soybeans daily and sells the high-protein soy meal to livestock and dairy farmers. Soybean oil is refined and sold to food processors and, in a small operation, bottled and sold locally at Meijer, D&W and Family Fare stores. The consumer products are also sold through Whole Foods stores in southeast Michigan and online at Amazon.com.

The Zeeland campus is operated with steam and electricity generated using the methane gas delivered from a nearby landfill using a pipeline that Zeeland Farm Services built seven years ago.

The company is also involved in the fuels business. One of Zeeland Farm Services’ subsidiaries runs an ethanol plant in Nebraska, while an affiliate operates an ethanol facility in Pennsylvania.

“My dad handed down to us a work ethic. And he was innovative. Those two things were the difference,” Meeuwsen said of the company’s evolution. “You can study books and everything, but if you can’t apply them and if you’re not innovative, you’re never going to keep up in life.”

Cliff runs the business with his brothers, Robb and Arlen.

Robb Meeuwsen operates the company’s food division, while Arlen Meeuwsen is in charge of the grain merchandising division.

Cliff Meeuwsen was driving a truck at 14 years old and started out working for his father by painting, cleaning out trucks and shoveling corn off flat trucks by hand – all 700 bushels at a time. And he did it six or seven times a day.

“You ever shovel 700 bushels? I could do that in about 55 minutes,” Meeuwsen said.

A bushel of corn weighs 56 pounds, which equates to more than 39,000 pounds per truckload that Meeuwsen shoveled. The work taught him to “keep learning and keep working and strive to do better,” he said.

“I learned back then what I didn’t want to do my whole life. My dad made sure. About every job my dad gave me was one of those jobs I didn’t want to do all my life,” Meeuwsen said.

Zeeland Farm Services’ success in 63 years in business earned it the 2013 Outstanding Growth Award from the West Michigan chapter of the Association for Corporate Growth. Zeeland Farm Services joins past Outstanding Growth Award winners that include corporate icons like Herman Miller Inc., Perrigo Co., Wolverine World Wide Inc. and ADAC Automotive Inc.

Bob Boehm, manager of commodities and marketing at the Michigan Farm Bureau, considers the family-owned Zeeland Farm Services a critical piece of the state’s $91.4 billion agricultural economy that Gov. Rick Snyder has targeted for growth through value-added food processing.

Zeeland Farm Services fits right into the state and industry’s strategy for agriculture and was doing many of the things now targeted well before they became the priorities of state government, Boehm said.

“It’s a great asset to have in the state,” Boehm said of the company. “It’s the whole program everybody is trying to push.”

The soybean-processing plant improved the cost of getting product to market and the market opportunity for growers across Michigan, although at the time there were doubts about locating it in Zeeland, Boehm said. The general view was that a central location in equal proximity to growers would have been better, he said.

“You probably wouldn’t pick (Zeeland) as the place to locate a soybean plant on the west side of the state,” Boehm said. “But that’s where they live and that’s their home, and they made it work.”

In the early 1990s, when the Meeuwsen brothers first acquired the company, growers in Michigan and the U.S. were increasingly rotating their crops to soybeans.

Zeeland Farm Services was hauling soybeans for local growers to processing plants 200 to 250 miles away in central Indiana and central Illinois. The company would then haul soy meal back to Michigan to sell to farmers for dairy and cattle feed.

The increased soybean loads and the associated transportation costs planted the seed for developing a local processing plant.

Back then, the transportation cost for soybeans was about 25 cents per bushel and hauling the soy meal back to Michigan cost about $10 to $12 per ton. Today, with the higher price for fuel, costs are about 45 cents per bushel and $16 to $17 per ton.

“We were hauling more and more soybeans out of Michigan because the yields increased, the varieties got better and we were able to grow just better soybeans in Michigan,” Meeuwsen said. “That’s a lot of freight and that’s a lot of cost that has to go into feed in Michigan that we thought we could cut out. (We thought we could) make it better … and cheaper for our customer base by keeping the soybeans right in Michigan, and by producing the soy meal right here and then shipping it a lot cheaper directly to the customer.”

After analyzing the idea, Zeeland Farm Services decided to proceed and develop a soybean processing plant at its 84th Street campus in Zeeland at a cost of $10 million.

“That was a big gulp back then for us,” Meeuwsen recalls.

And it was a big risk, too.

“That was a lot of money and we didn’t know if it was going to be successful or not,” he said.

Zeeland Farm Services was also unsure how its new competitors — the places where the company used to ship soybeans — would react. As it turned out, they were not pleased.

Competitors that were among the largest food processors in America quickly began to undercut the local market with their own soy meal, Meeuwsen said.

“They tried to put us out of business and almost succeeded a couple times,” he said. “They tried to do everything they could to get us out of business for the first five years. They would sell soybean meal into this area way under the price (they would normally sell it). They would just dump their excess over here.”

The volume of soybeans Zeeland Farm Services processed daily “was just a little splash in the pan” to the large competitors that could readily afford the losses in the Michigan market.

“If they broke even on it or lost money on it, it was basically no big deal to them. But it basically set the market for our whole area here and brought it all down cheaper. It made it so we couldn’t compete,” Meeuwsen said.

To survive, “we ate cheap (and) worked hard, 20-hour days – whatever it took,” Meeuwsen said. Zeeland Farm Services also refinanced its debt and “did whatever we could to raise money,” he said. “It was just one little thing at a time.”

Zeeland Farm Services eventually persevered. As the plant gained business, the company expanded its soybean processing capacity from 400 tons to 750 tons per day, generating efficiencies that improved operating margins.

A subsequent expansion in 2010 took capacity to 1,000 tons per day, although the plant now runs at about 900 tons per day.

The company years ago also began exporting products into foreign markets, which opened up new opportunities for the business. Among its customers: soy sauce manufacturer Kikkoman in Japan. By 1999, Zeeland Farm Services was exporting 16,000 tons of specialty soy meal annually to Japan for the production of soy sauce.

“Over time they (competitors) couldn’t knock us out. We slowly weathered the storm and we hit a good year. We started getting a little stronger,” Meeuwsen said. “Sometimes, you have to go through tough times to make you stronger and get there, and all we needed to do was get there.”

The company built on the success of the processing plant a decade ago when it developed Michigan’s first vegetable oil refining and bleaching facility and developed a line of low-saturated fat soybean oil. The company created the Specialty Oils Division and Zeeland Food Services Inc. to produce and market the soybean oil.

Following the company’s strategy of always looking for where to go next and extend the product line, the oil facility was upgraded a few years later to refine the soybean oil from a cruder version, enabling Zeeland Farm Services to sell directly to food processors and to bottle the oil for retail sale for cooking and baking.

Prior to upgrading the oil refinery, “we had a really rough time marketing our oil,” Meeuwsen said. “Basically, we were selling to our competitors. You’re never going to get a fair scrape out of that.”

“It just broadened that market out and you could no longer be cherry-picked,” he said of making its own oils. “That began to give us our margin.”

Zeeland Farm Services has grown by continually taking its core product and “getting a lot of great value out of it,” said Randy Thelen, president of Lakeshore Advantage, the economic development group for the Holland/Zeeland area. Thelen bets the thousands of people who drive by the Zeeland Farm Services’ site along Chicago Drive each day “don’t have the first clue of the technology and the ability housed behind that façade.”

“I suspect nine out of every 10 people who drive by suspect it’s just a big, old grain elevator,” he said.

Zeeland Farm Services today is “well-rounded feed, food and fuel” business that not only came through the recession in good shape but also flourished, Meeuwsen said. A weak dollar helped to boost exports and farm yields in Michigan during the period were “pretty good,” he said, “so we had products to sell.”

Exports today are three to four times that of 10 years ago, which has added to operating margins and removes excess product from the U.S. market, Meeuwsen said.

Given its nature, the agricultural business – even with its highs and lows, droughts and wide fluctuations in commodity prices – does have some protections against economic cycles.

“They were very good years for us. The ag industry held the state of Michigan up during those years. The car industry certainly didn’t.  That was gone,” Meeuwsen said. “Like any business in the ag industry, it has its ups and downs, but there is one thing very certain about the ag industry: People don’t have to buy cars, but they do have to eat.”

Looking back at the company’s history, Meeuwsen avoids second-guessing decisions, although he knows there are things he might have done differently.

What you want to do is continually learn and adjust. Second-guessing, he said, is “waste of time.”

“You never want to do that,” he said. “That’s looking back. You’re going to run into something if you’re looking back.

“How can you ever see where you’re going if you’re looking back?”

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Editor’s note: This story has been changed from its original version to correct the titles of Arlen and Robb Meeuwsen and to note that the Nebraska ethanol plant is run by a subsidiary of the company, while the Pennsylvania ethanol plant is run by an affiliate.  

Read 4402 times Last modified on Friday, 08 March 2013 16:54
Mark Sanchez

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