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Dakota Plains approves merger with CHS

Members of Dakota Plains Cooperative, a Valley City-based agribusiness, approved a merger last week with CHS Inc., a global wholesale company.

CHS Inc., based in St. Paul, Minn., provides crop nutrients, feed and petroleum products to its customers. The company has plans to build a $1.5 billion nitrogen fertilizer plant in Spiritwood Energy Park in the near future. Lani Jordan, director of corporate communications for CHS, said the merger will not have any impact on the fertilizer plant project.

The next step is for the CHS Board of Directors to grant final approval. Jordan said the next board meeting should be sometime in mid-November, but no date has been set.

CHS Inc. has about 10,000 employees, while Dakota Plains has 163.

Ken Astrup, general manager and CEO of Dakota Plains, said the vote was taken at a meeting Sept. 26, and 92 percent of the 98 members in attendance voted in favor of the merger.

"This has all been exciting," Astrup said. "The neat thing for us is the vote shows our members have the same vision that the board and management have for the merger."

Dakota Plains had a $135 million sales volume for the 2012-13 fiscal year, which ended in August.

Dakota Plains offers agronomy, seed, feed, and energy services and products. It has 15 locations in central and southeast North Dakota.

Astrup said assuming the CHS board grants final approval, the merger would go into effect Jan. 1. Dakota Plains customers won't see any changes in how the co-op operates. Astrup said he will remain as general manager.

"All our employees will stay and a local producer board will make policy decisions for the co-op and provide direction for growth," he said.

The two businesses have worked together in the past, according to Astrup.

About two years ago, Dakota Plains had its agronomy staff look at what assets it would need to keep up with the needs of its members in the future. Astrup said. The highest priority the co-op faced in the future was providing enough fertilizer for its members. To keep up with demand, Astrup said the co-op would need to build two fertilizer plants.

He said Dakota Plains would have been able to get enough funding from its business bank for one plant, but not two. Astrup said the co-op members looked at the different businesses the co-op already had relationships with, and CHS stood out.

Jordan said previously the merger with Dakota Plains would strengthen an already strong bond between the two companies.