St. Paul, MN (NNCNOW.com) - Minnesota's suffering timber industry could soon get a new lease on life.
Golden-Valley based Segetis wants to build its first commercial biochemical plant at the Laskin Energy Park in Hoyt Lakes.
"This is an opportunity for the Iron Range and the wood basket to get into the biochemical industry," said Sen. Tom Bakk (DFL-Cook).
The proposed $105 million plant would produce cleaning products using wood-based biochemicals, instead of oil-based plastics.
"To have something that is homegrown, something that is renewable, you know, I look upon wood and corn and things that come from the earth as renewable resources. If we can add value to it, that's what my company is involved in." said Atul Thakrar, CEO of Segetis.
On Tuesday, the Iron Range Resources and Rehabilitation Board unanimously agreed to give the company $21 million for engineering and construction of the project.
"It's a great opportunity to bring in this company, in an emerging industry, the biochemicals industry and create hundreds of jobs, help out our loggers and diversify our economy in northeastern Minnesota," said Tony Sertich, IRRRB commissioner.
A study by the University of Minnesota Duluth found the project would create more than 400 jobs and have a $55 million impact on the region, with Hoyt Lakes at the center.
"We want to be a good neighbor to any company that comes through our community. And we want to be ready for whatever we need, if it's a housing issue, infrastructure issue," said Mayor Mark Skelton of Hoyt Lakes.
Lawmakers say the partnership will position the Iron Range a future leader in the biochemical industry.
The next step for Segetis is to secure the remaining funding and apply for environmental permits.
The rest of the funding for the project is expected to come from private investors and the Department of Employment and Economic Development.
Barring any hurdles, the company hopes to have shovels in the ground in six to 12 months.
Segetis says the facility will initially use corn sugars once it's running next year, and by 2018, transition to wood.