Iowa Retailer Finds Blueprint for Successful Expansions

Floaters sitting idle in the field coupled with an unnecessarily slow and inefficient process to load fertilizer at the warehouse were catalysts for change at New Century FS.

As retailers examine their businesses today—and how to grow their businesses for tomorrow—many are identifying high rates of return by investing in facilities. Despite the headwinds of a tough ag market, investments in efficiency and advanced technologies have paid off.

Systematic Approach. A decade ago, a plan started to develop that would transform the New Century FS dry fertilizer facilities and extend to other facets of the business as well.

To understand the entire business’ needs, the team at New Century went to work to plan for the future.

“We looked at our whole territory and split our business into three geographical areas,” says Jake Jacobs, general manager at New Century FS. “We quickly realized we had a lot of antiquated fertilizer sheds that either needed to be updated or closed.”

Early in the process, the team at New Century FS could easily identify ways that consolidating and upgrading facilities would better serve customers and likely grow business. Previously, the individual sites each had a fertilizer storage facility and blender to serve a 25-mile radius area.

“We couldn’t blend fast enough to keep the dry floaters running—even though we were running two 16-ton tenders to each machine, our floaters were sitting in the field waiting,” Jacobs explains.

In addition to the in-season backlog, New Century FS wasn’t able to take advantage of seasonal pricing savings and pass those on to the customers. Analyzing sales gave direction on the size and capacities needed.

“We looked at annual sales and then split that into fall and spring because we wanted to take advantage of early-season pricing discounts from our suppliers. With the old sheds, we weren’t able to stock enough material to avoid paying higher in-season prices,” Jacobs says.

The first project was in Vinton, Iowa, in the northeastern section of the company’s trade area. The facility was built on a rail line, and the new 15,000-ton fertilizer shed was an upgrade from a 1,000-ton facility. New Century also shut down four other small sheds. It worked with Yargus Manufacturing on fertilizer blending equipment. The site also included added UAN storage; a new crop protection building, office, shop and seed warehouse; and increased anhydrous ammonia storage.

“We learned from that site how a major update and consolidation could prove to be very efficient,” Jacobs says.

Two years ago, the second phase started in Melbourne, Iowa. The company purchased more land around its existing footprint and built a 12,000-ton fertilizer warehouse with Sackett-Waconia equipment. That consolidated four other fertilizer locations.

Today, the larger facility serves six floaters, and according to Jacobs, since the investment in facilities, a floater hasn’t had to sit in the field waiting for a tender delivery.

Consolidated But Not Closed. Despite consolidating fertilizer facilities, the New Century FS team kept the offices and ammonia sites of the previous locations open.

“We’ve learned that if we completely closed a site, customers left and went elsewhere,” Jacobs says. “We want to maintain our presence in close proximity to our customers to maintain relationships.”

Larger Capacity, Bigger Sales. Now, the Vinton and Melbourne sites serve an area that had been covered by eight separate facilities.

“We’ve already grown our overall fertilizer business. We sell 10,000 more tons of fertilizer now than we did three years ago,” Jacobs says.

Part of the advancement included a fully automated Kahler blending system at each site. The size of the facility and the incorporated technology have gone hand in hand to help the business grow.

“We used to move fertilizer in all day and into the night to keep up with the daily demands. We knew we had to do something different. It took 45 minutes to 1 hour to unload a 20-ton load of fertilizer; this was a slow and dirty process that we can now accomplish in under 10 minutes,” Jacobs says.

With the new facility, New Century has added four new fertilizer products and the capacity to do custom blending for farmers and offer field-by-field specified blends.

The automation has eliminated some of the demand for part-time in-season help.

“Our teams at the locations love the new process and technology. They can put orders in at their home office, automatically send those files to the blend sheds, and the orders are ready when the farmers come in and say let’s get this done,” Jacobs says.

Technology has reduced waste and improved inventory management.

“With the automation tied into our billing and ordering, it’s helped us from an inventory control aspect. We get daily reports on what goes out of the shed and what’s left in the shed. It also keeps track of future orders and lets us know if we don’t have enough product to fulfill those orders. And it’s helped reduce shrink,” Jacobs says.

Building More Business. Similar to the Vinton site, the Melbourne site also incorporated a new crop protection warehouse, expanded ammonia site, a maintenance shop and an unattended fueling station. A&B Welding provided the tanks and plumbing for the crop protection and UAN systems. The ammonia site has three 30,000-gal. tanks and has the room to expand to a fourth.

“Before this expansion, all of our chemical mixing was done outside,” Jacobs says. He says customers appreciate the precision blending service on the crop protection side as well because it’s a faster and more accurate process.

The maintenance shop is large enough to unfold and lay out a 25-knife toolbar.

“Our maintenance and repair bills have gone down because we can do a lot of the work ourselves, and the employees have a large enough shop to get equipment in to work on during winter,” Jacobs says.

Fleet Upgrades. The upgraded facilities have grown the business, which has been matched with additional machinery. During this process, the company bought five 24-ton tenders, five 4,800-gal. liquid trailers and two liquid bulk trailers. The spray application business has also been well-served with the larger capacity at the updated facilities.

“We are running 32 company-owned sprayers in our territory. We are able to keep our machines moving as well as servicing customers who are spraying their own,” Jacobs says.

Next Step. With a successful blueprint to maximize the return on investment with facility updates, New Century is moving onto its next project—a new crop protection facility in Millersburg, Iowa.