Segetis, the Golden Valley-based "green chemistry" company that makes plant-based solvents that are petroleum substitutes, plans to start construction on a $105 million plant by next spring in wood-rich northeastern Minnesota.
The Iron Range Resources and Rehabilitation Board (IRRRB), the economic development agency funded with taconite taxes, has approved $21.2 million in funding for the renewable biochemical plant at Hoyt Lakes, 60 miles north of Duluth.
"Segetis is on the leading edge of the biochemical economy and will add value to our timber and forest-products economy," said IRRRB Commissioner Tony Sertich.
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.
In an interview, CEO Atul Thakrar said the IRRRB commitment will allow Segetis to raise project-debt financing and equity from its existing stockholders and, possibly, new investors.
"There is a tremendous biomass basket up there in northeastern Minnesota, and in the long term this is the right place for us to be, from a logistics point of view, and we believe that we can be a catalyst to a 'bio-economy' cluster of companies up there. There is a lot of wood and a skilled workforce.''
Segetis, which employs about 40 people, develops and makes bio-based material for flexible plastic products, synthetics, cleaning products, and other consumer goods that supplant oil-based feedstock.
"We have customers and we have potential customers who have tried [Segetis products] and are ready to buy,'' Thakrar said. "We could begin construction in spring of 2015, maybe even the fall of this year. We need to finish our engineering and get our money together. And we have interest from investors, including existing investors."
