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Land O’Lakes has prospered by using technology to bolster its three core businesses; sales have doubled in the past eight years.

Land O’Lakes,

Mike Ott

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Oracle helps make Land O'Lakes more efficient

  • Article by: NEAL ST. ANTHONY
  • Star Tribune
  • November 3, 2013 - 8:41 PM

Last week, Oracle showcased its technology partnership with Land O’Lakes for about 250 Oracle customers and employees on Land O’Lakes’ Arden Hills campus.

“We are one of their more successful partnerships,” said eight-year CEO Chris Policinski of Land O’Lakes. “We’ve taken a lot of the cost out of the business through less inventory and we run factories at greater capacity because our forecasting is so much better. More importantly, it has transformed the way we think about our business.”

Under Policinski, Land O’Lakes shed peripheral business and beefed up on its three cornerstone businesses of farm services, animal nutrition, including its Purina acquisition, and consumer dairy foods. The farmer-owned cooperative started by committing $95 million over several years, including adding about 40 tech­nology hires. It also partnered with Deloitte Consulting and built out a systemwide enterprise resource plan that helped it better manage, distribute and market products. Land O’Lakes integrated better online logistics, business intelligence, customer relationship management, and added FarmFacts, sort of a Google for their co-op dealers and farmer members.

Sales have doubled to about $14 billion and profitability and dividend payments to farmers rose more than 100 percent over the last eight years. Employment has less than doubled to about 10,000 people. Land O’Lakes’ truck fleet is down 15 or 20 percent. But it’s hauling a lot more product thanks to better computer-based forecasting and logistics.

Bottom line, Policinski says better technological applications help Land O’Lakes and help farmers produce more food with less fertilizer, energy and water.

“We’re all about increased productivity in an [environmentally] sustainable way,” he said.

Coal plant upgrade underway

A big upgrade to a large coal-burning power plant just got underway in northern Minnesota.

Minnesota Power, the Duluth-based electric utility whose customers include the power-intensive iron ore industry, on Thursday officially launched its $430 million, three-year environmental-control retrofit of Unit 4 at the Boswell power plant in Cohasset, Minn.

The generator, which is 20 percent owned by a Wisconsin municipal power supplier, will get new mercury and other emissions controls in a project that will employ 500 workers at its peak, the utility said.

To pay for its share of the project, Minnesota Power residential customers can expect a rate increase of 5.9 percent by 2017, with a bigger increase for industrial ratepayers, according to a regulatory document.

David Shaffer

 

Who’s No. 1 in Minnesota SBA Lending?

U.S. Bank was the No. 1 U.S. Small Business Administration lender in loans to Minnesota companies for the federal fiscal year ended Sept. 30. The 188 SBA loans, totaling $28 million in Minnesota, approved by U.S. Bank in Minnesota represent a 23 percent increase over last year.

Craig Veurink, regional small-business banking manager for U.S. Bank, which employs 11,000 Minnesotans, said SBA loans, which provide taxpayer insurance of up to 90 percent of value, have helped owners “invest in their businesses by purchasing new equipment or freeing up cash flow to hire that extra employee and keep up with demand.”

Meanwhile, Wells Fargo, which employs 20,000 Minnesotans, says it is the No. 1 Minnesota lender in terms of volume with $56 million in local SBA loans, up 13 percent from 2012. Wells Fargo is also the largest national SBA lender in terms of dollar volume.

For the second time in three years, Wells Fargo was named SBA large-bank lender of the year by dollar volume, in ceremonies last June presided over by SBA Administrator Karen Mills.

U.S. Bank and Wells Fargo are among America’s five largest banks.

Shop Small, Shop local, Deluxe survey indicates

A new study in advance of the critical holiday season reveals that 95 percent of consumers believe it is important to support local, small businesses this holiday season.

The Deluxe Annual Holiday Shopping Survey of 1,000 consumers nationally, commissioned by Deluxe Corp., supplier of products and services for financial institutions and small businesses, shows 35 percent of consumers plan to shop at small businesses this year for their holiday gifts, an 8 percent increase from 2012.

“Small businesses should be very encouraged by the results of the survey,” said Deluxe Vice President Tim Carroll in a statement. “Since shoppers increasingly use technology to plan and fulfill their holiday shopping needs, small businesses must leverage that same technology to remain top-of-mind and drive sales.”

The survey found that 78 ­percent plan to do their holiday shopping online and 28 percent prefer a small-business or boutique website; only 15 percent of consumers will do the majority of holiday shopping on “Black Friday” or “Cyber Monday,” while 42 percent prefer buying gifts earlier in November; 86 percent prefer a holiday card through the U.S. Postal Service over e-mail.

SHORT TAKES

• U.S. Bancorp’s fast-growing wealth management arm has named Mike Ott as president of the Private Client Reserve, which focuses on high net-worth customers with more than $1 million to invest. Ott replaces Michael Boardman who has jumped to larger rival JPMorgan Chase to become CEO of Chase Wealth Management. Ott joined Private Client in 2008 as its inaugural head of investments. Ott, former head of equity research at Piper Jaffray, graduated from the U.S. Air Force Academy, serves in the Minnesota Air National Guard and is an adviser to the Pentagon on cyber operations.

• U.S. Bank has closed on a financing package of $118 million for Plymouth-based Dominium to develop the historic Pillsbury A Mill in Minneapolis into 251 units of affordable rental housing for artists. The historic flour mill, built in 1881 and closed in 2003, is a U.S. National Historic Landmark and just two years ago was named one of the nation’s 11 most endangered buildings by the National Trust for Historic ­Preservation.

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