Segetis, the Golden Valley “green chemistry” company that makes plant-based solvents that are petroleum substitutes, announced plans in 2014 for a $105 million factory at an industrial park in a wood-rich area near Hoyt Lakes, Minn.
However, several-year CEO Atul Thakrar left the company earlier this year, and the company has not presented the Iron Range Resources and Rehabilitation Board (IRRRB), the Range economic developer, with its roughly $65 million in equity-and-debt financing.
Several current and former Segetis executives did not respond to inquiries last week.
“We haven’t put any of our money in,” Commissioner Mark Phillips of the IRRRB board said. “We’re waiting for Segetis to come up with their [$65 million] equity and debt portion.”
The deal between the state and Segetis expires in January unless the financing is presented and approved by the IRRRB board.
The IRRRB and the Minnesota Department of Employment and Economic Development pledged about $28 million in loans to the project. About $1 million of the money has been disbursed to the city of Hoyt Lakes to buy the vacant building. Duluth-based Minnesota Power also committed $3 million.
Segetis, which has a small, leased commercial plant in Wisconsin and two pilot plants in Golden Valley, was pursued by several states and at least one Canadian province.
“Segetis is on the leading edge of the biochemical economy and will add value to our timber and forest-products economy,” said former IRRRB Commissioner Tony Sertich last year.
Part of the company’s problem is thought to be low oil prices. Segetis makes solvents and cleaners from raw materials such as corn and waste wood. Its competitors’ products are petroleum-based and as oil prices have plummeted that has lowered the price of those products, giving customers little incentive to switch to higher priced greener solutions. That may have given prospective Segetis investors and lenders concern.
Segetis has raised more than $60 million in venture capital since 2007. The company, which last year employed 40 people, develops and makes bio-based material for flexible plastic products, synthetics, cleaning products, and other consumer goods that supplant oil-based feedstock.
The Segetis project at Hoyt Lakes was forecast to have an annual $55 million economic impact, an inaugural 55 jobs and support 545 jobs in related industries, according to a study by the University of Minnesota Extension Center for Community Vitality.
Meanwhile, BioAmber, another promising green chemistry company, apparently has moved its main headquarters from Plymouth to Montreal, Quebec. The Canadian government has subsidized construction of a flagship plant.
Investing ‘in people’ propels Veritae Group
Sally Mainquist and Kris Larson, veteran accountants and placement-firm executives, really meant business when they started their Veritae Group last year, after leaving Certes Financial Pros in 2013 after many years of executive service.
It also helps to be veteran head hunters in a growing economy.
Veritae is headed for revenue of $4 million this year, Mainquist said, well above expectations.
“I always say, ‘We are just helping our friends out and every now and then we get paid,’ ” Mainquist said. “Our boutique business focuses on leadership-level accounting and finance professionals. … So we never know when a person will be a client or a contractor. It’s the same pool of people. And our business model allows us to share more of our bill rate with our contractors.
“We invest in people, not brick-and-mortar. Our people are outstanding, and we have nearly a 90 percent ‘fill rate’ when a client calls looking for help; this is unheard of … with all the competition out there.”
Mainquist added that some clients also appreciate that the partners donate 10 percent of profits to local charities and discount their placements for nonprofits such as Greater Twin Cities United Way and St. David’s Center for Child & Family Development.
NAWBO recognizes female-headed firms
Several female business owners were honored recently at the annual awards ceremony of the Minnesota Chapter of the National Association of Women Business Owners. They included:
• Stacy O’Reilly, owner of Plunkett’s Pest Control, which has been around since 1915 and serves 40,000 clients in 11 states. Before joining Plunkett’s, O’Reilly worked for SimonDelivers.com, PUR Drinking Water Filters and McKinsey & Co.
•Ingrid Christensen, founder of a much younger business called INGCO International, a language services firm providing interpreting, translation and global marketing services in over 200 languages to private and nonprofit businesses ranging from 3M and Xcel Energy to the Humane Society and Catholic Charities.
Christensen, a single mom, started INGCO in 2006 and has grown it to five full-time employees and hundreds of contract linguists across the world. More information at: www.NAWBO-MN.org or http://tinyurl.com/q4lbt6o.
WomenVenture recognizes growth
WomenVenture, the Twin Cities nonprofit that counsels and helps finance female-headed small businesses, last week honored several successful entrepreneurs. They included: Angie Bastian, co-founder of popcorn company Boomchickapop, also the keynote speaker at last week’s annual awards ceremony; Jen Swendseid, founder of Heart&Core, a company that provides post-surgical bras for women suffering from breast or lung cancer; and Natalia Hals, founder of A Woman’s Design, a full-service boutique doula service.
Hannah Barnstable, the former investment banker and founder of Seven Sundays, received the Expanding Business award. The four-year-old outfit makes muesli, a nutrient-dense breakfast cereal of grains, nuts, seeds and fruits.
Health care forum set for Nov. 17
Minnesota HealthBasics has teamed with Northwestern Health Sciences University and others for a Nov. 17 forum that seeks common-ground solutions to rising health costs and other issues. HealthBasics will present insights from research on priorities Minnesotans bring to the health care discussion. Also included will be tips to better navigate the health care system to save money and improve care. More information: www.mnhealthbasics.com.