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'Quite amazing' review of business in Perham

Those who live in Perham know its unique and state and federal officials agreed at the annual Perham Economic Development Authority's annual meeting on Feb. 1.

Officials from the state Department of Employment and Economic Development and U.S. Department of Commerce were on hand to address the group.

U.S. Rep. Collin Peterson made a stop at the meeting and said it was too early to tell what will be done in the Legislature.

"The budget will consume a lot the debate that goes on in Washington and St. Paul," Peterson said, referring to the country's estimated $1.5 trillion deficit. The debate is whether to cut back to 2008 spending levels or as the president has suggested, freezing where we're at right now for the next five years.

"Either won't make a whole lot of difference," Peterson said, but did say he preferred the former. He said he advocates for making budget cuts similar to the agricultural department. Peterson chairs the agriculture committee. He also said there is an effort to reform the tax code including reducing exemptions and credits, which hasn't been donce since 1986. There's also talk in Washington about lowering rates, Peterson said.

He also mentioned the health care reform bill, saying he believes the individual mandate is unconstitutional and hopes to work to get provisions of the bill changed in the next session.

The majority of the meeting was spent recapping a year of business in the city and future plans.

Perham-based companies employ about 3,189 people, according to EDA Director Chuck Johnson.

One "quite amazing" aspect of business in Perham is the amount of commodities exported out of the country, according to Matthew Woodlee, international trade specialist with U.S. Department of Commerce.

Perham exports to 21 countries within the seven major manufacturers in the city. There are 33 export contracts scattered all over the world, Johnson said.

In addition, $150 million of agriculture commodities are purchased by these companies in Perham, Johnson said.

"It's a tremendous regional impact," Johnson said.


Several major employers in the city gave presentations at the meeting.

Charlie Nelson, son of KLN owner Kenny Nelson, said things at the companies are going well.

Charlie Nelson serves as general manager at the Barrel O' Fun plant in Phoenix that has been up and running for about a year.

"Sales are growing," he said. "It has been tough because we're not efficient down there yet."

Oil and other ingredients are expensive, Nelson explained, as Barrel transports oil from North Dakota to the Phoenix plant.

"We're not quite where we need to be yet," he said. "We need to make consistent product with the plant here."

There are 180 workers at the Phoenix plant, Nelson said. Perham employees do come down to help train employees in Phoenix.

As for the Perham businesses, Nelson said, business is also doing well.

KLN plans to market aggressively this year nationally, especially with television ads particularly during baseball season. KLN is in the midst of a three-year contract with the Minnesota Twins and will continue to advertise Barrel O' Fun on various TV and radio sports, and in-stadium events. Overall, the goal is to increase sales by 20 percent in 2011, Nelson said.

One difficulty has been raising product costs, Nelson said, which he attributed to raising costs of oil and potatoes.

Arvig Communication Systems

Business is also growing for Arvig Communications Systems, according to David Arvig, COO and vice president. In the past two years, ACS has acquired several telecommunications businesses including Home Telephone Company of Grand Meadow, Minn; Redwood-Clements Telephone Company. These companies were acquired in December with a price tag of $15 million, Arvig said. Other acquisitions included Diversicom of Melrose and Sauk Centre, Minn.; and Birth MidBOOK of St. Cloud, Minn. This fall ACS acquired Smart Search, which covers the Fargo-Moorhead and Grand Forks areas.

ACS is also providing new services, Arvig said, including access to, an online video site with plenty of Minnesota sports coverage. Only ACS subscribers may tap into the channel, Arvig said, due to a corporate agreement.

KitMasters and Swan Machines

Darrin Swanson of KitMasters and Swan Machine also gave an update. The companies had two acquisitions in 2009 and plan to manufacture a new, innovative product this year. The widget is a lawn mower blade with replaceable blades so there's no need to sharpen. It fits any type of push mower including commercial mowers and garden tractors.

"It's a new and exciting business that could potentially come to Perham," Swanson said.

The plant is also looking to expand by 20,000 square feet, Swanson said. The companies added 14 new employees last year and expect to do the same in 2011.

Hospital update

As for the new hospital, construction is about halfway through. The hospital is expected to open the first week in January of 2012. As for the existing hospital, it is being developed into suites that will be leased or used by the hospital as an assisted living facility. A new Boys and Girls Club will be moving into one of the suites, Chuck Hofius, executive director of the hospital said.