$7-Million Valley Investment And Never Turned A Dime Of Profit - Valley News Live - KVLY/KXJB - Fargo/Grand Forks

$7-Million Valley Investment And Never Turned A Dime Of Profit

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  Baked Chips in Mahnomen wound up costing 7-million dollars by the time it was completed in 2008.  It was financed by Midwest Minnesota Community Development Corporation, a non-profit company in Detroit Lakes that invests in all kinds of small town projects. But, the plant never produced one package of chips for sale.

Arlen Kangas, Midwest Minnesota Community Development Corporation: "As a company we do a lot of things, a lot of complex things. But, baking is not something we're good at and so it's an expensive lesson to be sure."

  Kangas says the main reason for this plants failure is its oven. The 300-thousand dollar oven could not produce baked, stackable chips with a low enough moisture content.

  The baked chips were stackable, but since their moisture content was too high, they couldn't be stored for any length of time, like Pringles. And turning up the heat on this massive oven simply burned the chips.

  Kangas says at this point, they're waiting until next spring, when financing regulations will allow them to sell the plant or the equipment.

Reporter: "Sometimes you win, sometimes you lose?"

Arlen Kangas: "That's right, and you have to win more than you lose, otherwise yo go out of business. We're far from that point."

  Three-hundred-thousand dollars of the plant's seven-million dollar cost was financed by the State. Kangas says that money has already been paid back.

  He says their company and it s investors are on the hook for the remaining debt.   Kangas says he's hoping to find a buyer for the plant, since he says it's already well equipped to produce cookies or crackers.  

  Meanwhile, it appears that the giant Kellogg's Corporation may be getting into the baked, stackable potato chip market.

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