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Digi-Key unveils new 2.2 million square-foot product distribution center expansion

The afternoon celebration, by invitation-only, gathered about 100 guests.

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Digi-Key president Dave Doherty, center, shares a laugh with Carol Rosengren, Dan Fabian and Scott Daniels during a tour of the 2.2 million square foot addition in Thief River Falls Wednesday, August 17, 2022.
Eric Hylden / Grand Forks Herald
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THIEF RIVER FALLS, Minn. — Digi-Key Electronics celebrated the opening of its new Product Distribution Center — a $400 million, 2.2 million square-foot facility that will meet the company’s growing needs for at least the next decade.

A number of local and state dignitaries visited the new space on Wednesday, Aug. 17, to see and talk about the new building and what it means not only for Digi-Key but the Thief River Falls community and the state of Minnesota.

“This is a significant milestone for all Digi-Key employees and our community,” said company President Dave Doherty. “For us, it’s deeper roots in Thief River Falls and a commitment to continue investing in this community and the state of Minnesota.”

“Everything that is good is what it means to have Digi-Key in Thief River Falls,” said Mayor Brian Holmer.

The afternoon celebration, by invitation-only, gathered about 100 guests. It started with a luncheon and introduction by Shane Zutz, Digi-Key’s vice president of human resources, who welcomed the invited guests and introduced Doherty and the other speakers.

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Doherty thanked the company’s partners, who are many, and said Digi-Key could not have the success it has achieved without that support.

“We don’t have a magic bullet. We’re not proud enough to think we can change the world by ourselves,” Doherty said, but noting with partnerships, the impossible can happen.

Holmer, Department of Employment and Economic Development Commissioner Steve Grove, Digi-Key Vice President of Order Fulfillment Chris Lauer, and the company’s CIO Ramesh Babu also addressed the crowds. Short, pre-recorded video messages also were given by Minnesota Gov. Tim Walz and U.S. Sen. Amy Klobuchar, D-Minn.

Walz said Digi-Key is an example for Minnesota.

Ron Stordahl, founder and CEO, told the Herald in an interview after the luncheon that he never imagined the company would become so big. The building, which exemplifies the company’s success, exceeded his expectations.

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From left; Chris Lauer, Digi-Key vice-president, order fulfillment; Thief River Falls mayor Brian Holmer; Digi-Key founder Ron Stordahl; Digi-Key president Dave Doherty; DEED commissioner Steve Grove and Digi-Key CIO Ramesh Babu react at Wednesday's PDCe grand opening in Thief River Falls.
Eric Hylden/Grand Forks Herald

“I didn’t plan to go this far,” he said, noting his original goal — which hasn’t changed — “was to just do the best job possible for clients.” When asked what other company successes he envisions for the future, he said it is tough to tell. “The growth has just been so phenomenal.”

Company reps and dignitaries also touted the jobs the expansion effort has and will yet create.

Work on the PDCe started in 2018. At the time, the company received a $40 million grant from the state of Minnesota for job expansion, Laura Stengrim, Digi-Key’s public relations and marketing communications manager, previously told the Herald, noting the company is well on the way to fulfilling that goal. It so far has added nearly 680 new employees.

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Holmer said the city recognized several years ago that Digi-Key’s expansion effort was both a business decision and something that would benefit the community. But, he said, it took him at least a week to understand how big the facility would be.

“Our city decided to roll up our sleeves and help make this expansion happen, to make it a reality for our community,” he said. “We felt this investment by Digi-Key would help solidify their position in Thief River Falls and bring many years of growth and economic development to our community.”

A ceremonial package handoff to its carrier partners, guest and media tours, and a press conference followed the luncheon.

The new building is connected by skybridge to the main headquarters and existing distribution center, which is about 800,000 square feet — dwarfed by the new building that is large enough to fit 22 football fields inside. It is one of the 10 largest warehouse buildings in North America.

The facility has 27 miles of automated conveyor, with the average order traveling more than 3,200 feet inside the building.

The new facility allows Digi-Key to pick, pack and ship nearly three times the previous daily average of 27,000 packages to customers in more than 180 countries around the world.

Founded in 1972, Digi-Key offers more than 13.4 million products from more than 2,300 quality name-brand manufacturers. The company employs more than 5,200 — 3,600-plus in Thief River Falls alone — and has an annual sales of more than $4.7 billion.

Designed by Minnesota-based Widseth, McShane Construction served as general contractor and more than 80 subcontractors were hired to help complete the expansion.

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The company received a certificate of occupancy in April 2021, but has been going slow with the new facility’s launch. It still is not full-scale even now, Doherty told the Herald. The company is taking it slow to make sure all of the technology is online and running smoothly.

The PDCe is a hallmark of the company and a brightspot for the community and the state of Minnsota, according to Grove, calling it “tremendous” and “outstanding” — not only Digi-Key, but the community that has supported it.

“This is a self-starter community. This also proves that people can live anywhere” — even in a rural community like Thief River Falls, population just under 9,000 by 20202 census estimates — “and still have a good job.

“I think that is something where Minnesota can differentiate itself.”

Andrew Weeks is an award-winning journalist who has reported for a number of newspapers and magazines. He currently is the editor of Prairie Business, the premier business magazine of the northern plains. The magazine covers various industries and business topics in the Dakotas and western Minnesota.
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