ABERDEEN, S.D. (AP) — The Minnesota-based Schwan Food Company is closing distribution centers in Oakes, N.D., and Faulkton, S.D., and building a facility in the South Dakota city of Aberdeen.
The move is aimed at increasing efficiency. The 7,000-square-foot Aberdeen facility is to be completed in the fall at a cost of more than $1 million, company spokesman Chuck Blomberg told the American News.
Schwan sells branded frozen foods through home delivery, the food service industry and grocery stores in North America. The company says it markets and distributes more than 350 products, from meat and sea food to ice cream and other desserts.
The 15 employees in Faulkton and the 12 in Oakes are being offered jobs in Aberdeen and at other sites within the company.
"We certainly loved operating from both towns; however, we had to make the right decision for our business as we looked to upgrade our facilities, operate more efficiently and better serve our customers in the area," Blomberg said. "We are committed to growing our business in the area, and this new building will better position us to serve our customers and grow. As we grow, the new facility can easily be expanded to meet our needs."
Faulkton Economic Development Corp. member Dwight Hossle said the job losses will hurt the town of about 730 people.
"Even a job loss of 10 is a big deal in Faulkton," he said. "It is a much bigger deal than in Aberdeen, where there are 10 to 15 jobs lost or created almost every day."
Aberdeen is a city of about 26,000 people.
"Anytime a business leaves a small town, it is tough to replace those jobs," Hossle said. "Those paychecks are important. Those people are buying groceries, paying utility bills and shopping at stores."
Oakes Mayor Monte Zimmer said that community of about 2,000 people also will feel the impact of the job losses.
"It hurts the community as a whole. It affects the school district, housing market and other parts of town," he said. "I know that business has been here as long as I have been here — more than 20 years — so it is a loss."
Julie Johnson, executive director of the Absolutely! Aberdeen development group and leader of Prairie Vision, which works to increase economic development in northeast South Dakota, said Schwan's is an important contributor to the region.
"We encouraged them to take another look at Faulkton," she said. "We are very sensitive to Faulkton and the smaller towns in our region. We want to see them prosper. I can assure you that attracting businesses from smaller towns in the region to Aberdeen is not in our business plan."