St. Michael-based J&B Group Inc. plans to cease production at its meat facility in Pipestone, Minn., by late November.
The company says it aims to consolidate operations at its headquarters facility in St. Michael. For over a decade, J&B Group has been producing fresh and frozen ground beef and steaks at the Pipestone facility, where it employs 145 people. All workers “will have opportunities” in St. Michael, and they’ll be eligible for relocation assistance, according to a company news release.
The news comes after a contract to produce fresh ground beef fell through. J&B Group had invested more than $7 million in anticipation of that new business, president Chuck Weum said in the news release.
“This was a long and difficult decision and not a reflection of the quality of work done by our associates in Pipestone,” said Weum. “We are working with our Pipestone associates to ensure they are getting the resources they need during this transition and are providing enhanced benefits and severance packages to help during this time.”
J&B Group is the fifth biggest employer in Pipestone, says mayor Myron Koets. News of the plant’s closure caught the small community of about 4,300 by surprise, he says.
When J&B failed to clinch the fresh ground beef contract, it “really set them back,” Koets says.
On Wednesday, Koets will hold a meeting with local business leaders to discuss the closure. He also hopes to gauge interest in a potential buyer for the new facility.
Koets says he’s already received some inquiries from out-of-state companies, though he declined to name them.
J&B Group didn’t disclose the value of the plant in its new release. In an email, a company spokeswoman said the company is working "aggressively" to sell the plant. J&B has contacted more than 400 companies about the opportunity to purchase the facility, the spokeswoman said.
The plant has been around for almost three decades, says Koets, though it’s been under different ownership throughout its lifetime. The Pipestone facility is located in a federal “opportunity zone,” which means its owners are eligible for a tax credit.
J&B Group is the latest manufacturer to close up shop in greater Minnesota. Last month, food producer Del Monte Foods Inc. announced plans to shutter its plant in Sleepy Eye.
Earlier this summer, TCB inducted J&B co-founder Bob Hageman into the Minnesota Business Hall of Fame.