Nov. 13, 2024

CJ Schwan’s, also known as Schwan’s Co., officially has started work on a 142-acre project to bring an Asian food production facility to Sioux Falls, while acknowledging that this could be the start of an even broader operation in the community.

The 700,000-square-foot building will be one of the world’s largest Asian food factories, spanning the length of more than 12 football fields at Foundation Park in northwest Sioux Falls and include two state-of-the-art production lines, plus room for expansion.

It will support the company’s bibigo brand, making egg rolls and steamed dumplings.

The project also includes a wastewater treatment plant, warehouse and distribution center, shipping and receiving docks and office space.

About 600 jobs will be created once the production facility is complete, with an additional 50 jobs planned to be located in downtown Sioux Falls, where the company has leased space at River Centre with plans to renovate it. Potentially, there could be more than 100 jobs in the office building at 10th Street and River Road as manufacturing begins.

“Today is an incredibly exciting moment for us and an important milestone in our company’s history,” said Brian Schiegg, CEO of U.S. operation CJ Schwan’s.

Today’s groundbreaking drew the company’s top leadership, including Schiegg and Minsok Pak, CEO of the parent company, South Korea-based CJ Foods.

“I would not have missed this for anything,” Pak said. “Korea is only about half of our business. The rest of our business around the world, that’s where we see the growth right now.”

CJ Foods acquired a majority stake in Minnesota-based Schwan’s retail and food service business in 2019. The frozen-food home delivery company, which recently ended operations, was not part of that deal.

The Sioux Falls facility will produce egg rolls and dumplings for bibigo, which is the company’s No. 1 line. CJ Schwan’s produces popular brands such as Red Baron, Tony’s and Freschetta pizza, Mrs. Smith’s and Edwards desserts, and bibigo and Pagoda Asian-style foods.

“It is going to be one of the most state-of-the-art manufacturing and food production facilities in the world, and we’re proud to have that here in Sioux Falls,” Mayor Paul TenHaken said.

“I’m ready to call us the egg roll capital of the world.”

The path to invest in Sioux Falls began six years ago, Schiegg said, under his predecessor, Dimitrios Smyrnios.

“Projects like this — size, scale and scope — don’t come together without partnerships between private and public, and I think this is just a shining example of that,” Schiegg said.

Gov. Kristi Noem, whose office first held conversations with the company, estimates the total investment from CJ Schwan’s at $1 billion.

“It’s a game-changer for the state of South Dakota. I’m so grateful to this company,” she said.

“All along throughout this project, they have been men of integrity. … They have followed through on their commitment to this state, and this state has kept their commitment to them. … I think it represents what the culture of South Dakota is.”

Noem credited the state’s low tax base, commitment to freedom and work ethic for its attractiveness to CJ Schwan’s.

“With this project, we’re going to have workforce needs, and South Dakota is committed to making sure we meet them,” she added.

Sioux Falls stands out for a combination of its central location, infrastructure and education system, Schiegg said.

“All those things came together,” he said. “And fundamentally, what you’re able to do in a green field facility is take the newest and latest technology into the facility.”

CJ Schwan’s already has started talking with multiple tech schools about training employees ahead of the production facility beginning operations, company leaders said.

The facility itself “is going to be very sophisticated, highly technical, and parts of it will be very automated,” Pak said. “We’ve learned from other facilities the more we get ahead (in educating workers) we can generate the skill sets we need.”

That includes positions involving robotics and automation, systems management, hydraulics, equipment operation and maintenance, and data analysis.

While the initial construction is estimated at $500 million, the building itself plus parking and the water treatment plant will take a small fraction of the land the company owns.

Reaching $1 billion in investment will take future development that will depend on market conditions for timing, Schiegg said.

“You don’t get this much acreage without definitive plans in the future to expand,” he added.

Asian food, which is driving growth for the company, likely would continue to be the focus in Sioux Falls, Pak said.

The global consumer interest in all things Korean — from pop bands to skin care — is fueling interest, he added. In South Korea, CJ Foods is the country’s largest food company.

In coming together with Schwan’s, “we saw a company with very similar values, very similar culture, 70 years-plus of family history, iconic brands and a team in place that wanted to win,” Pak said.

While the Sioux Falls production facility is starting with egg rolls and dumplings, “the portfolio is much broader, so as we look at expansion, it would be to bring other products on the same campus,” he said.

The contractor for the project will be Kansas City-based Burns & McDonnell. Vertical construction is expected to start next year, with an opening in 2027. Hiring for some leadership roles could start early next year.

The project originally was announced in 2021.

“This is a day we’ve been waiting for for a long time,” said Bob Mundt, president and CEO of the Sioux Falls Development Foundation.

“It’s just great to see this happening and see that facility start to take shape.”

TenHaken credited the Sioux Falls Development Foundation for the vision to develop the industrial park, which is northwest of interstates 29 and 90.

“This was a barren place for quite a few years, and now we’re almost out of land, and we’re talking about Foundation Park II,” he said.

For the Sioux Falls Development Foundation, which has some additional land available on the north side of Foundation Park near the CJ Schwan’s campus, the groundbreaking “continues to show tremendous momentum in Foundation Park,” Mundt said. “The fact that one of the primary tenants is starting construction … activity breeds activity, and that’s really where we’re at.”

Post-election, activity from prospects already has picked up, he added.

“People are calling us back and telling us where they’re at and where they want to be in the next 60 to 90 days, so I think 2025 is going to be strong, and we’re going to see a lot of activity.”