Representatives from Iowa's state government, Cargill, and South Korea's CJ Cheiljedang attend the official grand opening of the lysine factory in Fort Dodge. Image: CJ CheilJedang

Top Korean Food Maker Begins Long-term Partnership with Fort Dodge, Iowa

Korea

On June 25, 2014 officials from Fort Dodge, Iowa and South Korea’s top food maker CJ Cheiljedang officially opened a plant that, according to CJ Group president Kyung-Shik Sohn, will become “the largest producer of lysine in the global market.” Lysine, an amino acid essential to the production of animal feed, is a huge commodity in the United States. Last year, the lysine market in the United States totaled 450,000 tons, making it the world’s third largest market after China (700,000) and Europe (600,000).

At the new facility in Fort Dodge, the CJ Group has invested $320 million with the initial goal of producing 100,000 tons of lysine per year. CJ Group is expected to continue funding the plant’s expansion until an annual capacity of 700,000 tons of lysine is reached. At that point, it is predicted that the Fort Dodge facility will account for 30% of the global market share. The plant, which began operating last year before its official grand opening, appears to on pace to exceeding even its initial goal. The new plant was responsible for around 1,200 temporary jobs during its construction and is expected to support 180 full-time jobs. Fort Dodge, which is located in Iowa’s 4th congressional district, had already seen an 87% growth in the number of jobs supported by goods exports to Asia from 2007-2012, and the new plant will further grow that number. In 2012 over 46% of the district’s total exports went to Asia, with exports to South Korea totaling $212 million. Of those exports the majority were in agricultural sectors such as oilseed and grains and meat products. Not only would CJ Group have access to more of the U.S. lysine market, but Fort Dodge would also be able to ship the product abroad to other customers in Asia.

The plant is adjacent to a facility owned by Cargill, a leading agricultural and industrial distributor that has had success in similar ventures with the CJ Group in Blair, Nebraska and Eddyville, Iowa. Cargill will be providing the bulk of the corn starch needed for lysine production at the plant. The close proximity between the plant and Cargill will decrease transportation costs substantially, which benefits customers within the United States and abroad. The inauguration of this plant has built up the profile of Iowa’s Crossroads of Innovation, an agricultural industrial park. Using the products generated through this partnership, Dave MacLennan, CEO of Cargill, sees this “Fort Dodge biorefinery campus as an investment [… that] will continue to create jobs in Iowa, reinvestment in the local community and help connect our farmer customers to our global customers.”

Sarah Batiuk is a Research Intern at the East-West Center in Washington, DC.