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Dakota Western Corp. is a model for upward mobility

AGENCY VILLAGE, S.D. - Most people pay little attention to those white plastic bags they see used cleaning crews use at a McDonald's restaurant, but one tribal company makes a point of noticing them. They represent a major contract that helped build a strong customer base and employment opportunities for the Sisseton-Wahpeton Sioux Tribe.

Dakota Western Corp., established in 1988, continues to grow, adding another plant site about 27 miles northwest of its headquarters. It is diversifying in a highly competitive plastics market. Nearly a decade after the plant opened its doors, it doubled in size and was ranked in the top 25 minority-held plastics processors just three years ago.

The company's success has been a team effort and extensive market research, General Manager Tim Azure said.

"The market, the market, the market and the market" are the four rules that Azure said drive the company's product line and its niche in a marketplace that is no small ballgame. Dakota Western competes with companies set in highly industrialized areas, many of them in the Northeast and Northcentral region of the nation. It distributes products nationally to the government, private industry and service businesses.

With fewer than 50 workers, the company's sales were more than $5.6 million in 1998, industry estimates for sales performance show. Closely watching trends and keeping an eye on changes in the market has given a lean company a highly competitive edge in a fast-paced business, Azure said.

"We have a good crew here. Everybody contributes and that's important."

Modest about the success, Azure pointed out manufacturing isn't for every tribe and tribal government has to allow a business to compete and stand on its own, without interfering with its operation.

The gain is great because such industry generates diverse employment prospects for tribal workers including skilled labor, management, engineering, marketing, production, quality control and packaging. He said spin-off jobs including construction and distribution have been realized by the company's growth.

The company's real success is tapping into a larger than local market which further improves the overall economic outlook for residents on the Lake Traverse Reservation with a historically high unemployment rate of more than 50 percent.

Finding start-up capital is a challenge, but Azure said if a well-planned proposal is brought to the table, government sources and bankers are willing to take the risk.

"It can cost as much as $100,000 per job to do it. Manufacturing jobs are expensive, but the yield is in the return, in the upward mobility and a variety of jobs created."

"Manufacturing is a hard ball of a business. If you are up to the challenge, keep the politicians out and bring in the brains," Azure said.

One of the company's strengths is its diversity. The majority of the workforce includes tribal employees, but there are non-tribal members as well and a very diverse client list.

"We couldn't do it with Indian people alone," he said.

Perhaps the one cultural factor that has helped fuel the manufacturing plant is self-discipline, Azure said. "Business is self-sacrifice."

The Turtle Mountain Band of Chippewa from North Dakota cautions tribes against simply copying Dakota Western's venture. Tribes need to be creative about embarking on new industry by finding their own niche.

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"Come up with your own idea. Don't be quick to copy."

He said tribal businesses can do very well if tribal leaders and businessmen commit themselves to an aggressive plan for economic growth. Dakota Western was founded on the principle of creating meaningful employment opportunities for tribal members and residents of northeastern South Dakota.

To profit from examples like the manufacturing plant, Azure said tribes must be willing to leverage tribal lands and take risks.

"Tribes have advantages, they just don't use them.

"We don't take advantage of our land base. We should be leveraging our land base. You can't have a business without any risk. You have to manage the risk, but nothing good ever came without a risk," Azure said.

"We had to compete with the big guys. People are out to get a better price to the customer. It's the toughest most competitive hard basketball game I've ever been in.

"We are the longest-running manufacturing plant on a reservation in the nation."

Paving the road to sovereignty, Azure said is simply economics. Moving tribal residents off welfare to work brings sovereignty to tribal members.

"The real trophy on an Indian reservation is a running, job-creating, growing manufacturing facility.

"Sovereignty is having your own cash," he said.

Azure and other tribal leaders are working on a federal level with South Dakota's congressional delegation to create tax credits for companies who buy from vendors on reservations.

"All indications are that it is a concept that will go on political and economic levels," he said.

Azure said the media rarely is allowed inside the plant to see its operation. Indian Country Today is the first newspaper ever allowed to photograph the site.

A tour reveals an amazing variety of plastics being produced including plastic bags tailored to client specifications. High-strength hexene trash bags for industrial and commercial use are the cornerstone of its market. Its bags can be ordered in quantities that weigh as much as 45,500 pounds. Dakota Western produces construction material that can weigh 2,400 pounds. It is fashioning a 24-inch plastic-film pipe nearly a quarter of a mile long - in a single roll - for the construction industry.

The plant's 25 to 30 employees work in four-man teams, two shifts per day on 12-hour shifts, seven days a week. The plant can produce more than 50,000 pounds of plastic bags a day when all of the machines are running. The plant produces an average of 35,000 pounds in roll stock each day and 34 truckloads of bags head out in every direction across the nation from the plant each month, said Lynn Halbert DuBois, the special tour guide.

Halbert DuBois said there is no waste because the company recycles all of its scraps back into the next production of resin bags.

The new site in Veblen will allow the company to further diversify as it enters a new market, producing plastic planks used in the construction industry. Careful not to reveal many details, Azure noted the company is at work on an exclusive prototype for a client.