Public funding boosts $439M wood mill in Cohasset – Finance and Commerce

A new publicly and privately funded, $439 million wood production plant will open next year in Cohasset, Minnesota, bringing the region new production and construction jobs.

The plant will produce orientated strand boards (OSB) for Huber Engineering Woods. The Iron Range Resources and Rehabilitation Board (IRRRB) unanimously approved a $15 million forgivable loan during its Monday meeting.

The Minnesota Department of Employment and Economic Development is also considering a $20 million loan from its 21st Century Fund to help finance the project. The IRRRB and DEED will forgive their loans if Huber meets certain benchmarks, primarily employment and production goals, Matt Sjoberg, executive director of development for IRRRB, said during the meeting.

A majority of the funding, an estimated $376.8 million, is coming from Huber’s private financing, and the remaining $27.5 million will likely be sourced from partner investors, according to IRRRB meeting material.

The 800,000-square-foot OSB production plant would be built on 400 acres near Minnesota Power’s Boswell Energy Center in Cohasset, a town of over 2,700 people in southern Itasca County. OSB is used in the construction of walls, flooring, roof sheathing and furniture.

“I think everyone certainly understands that markets are booming in anything that has … to do with construction or remodeling or anything like that,” Sjoberg said. “I think it’s safe to say … it’s a pretty good time to be in this business.”

Last month, Itasca County, which is home to the new plant, had more than 1,000 unemployed people. With a labor force of 21,800, its unemployment rate was 4.8% — a figure lower than rates reported during the months immediately before the pandemic began in March 2020, according to data from DEED.

In the seven-county northeastern Minnesota region, DEED reports 7,180 residents held a construction or extraction occupation. This represented 5% of the region’s workforce as of the first quarter of 2020.

To construct the plant, around 300 to 400 construction workers are needed. Work is expected to start this fall or spring of next year, said Brian Carlson, president of Huber Engineered Woods.

Huber anticipates offering full-time employees a median wage of $31 per hour, in addition to benefits. The location will also service about 150 logging trucks each day, adding to the number of jobs impacted by the new plants, according to meeting material.

“We did an exhaustive study and evaluated wood baskets and labor force across the western U.S. and western Canada. [We] identified several that we wanted to investigate further and ultimately decided that northern Minnesota, given the fiber basket that exists there and the long history in the OSB industry and the quality of the workforce, was an ideal fit for us,” Carlson said.

IRRRB plans to invest an additional $600,000 to support workforce development and training. DEED is also granting the project the same amount through two of its job training and incentive programs, according to meeting material.

The project may see more public investment. Additional funding for production incentives is expected to be directed to the project through a bill lawmakers will approve in the ongoing special session, said Sen. Tom Bakk, I-Cook.

Sjoberg confirmed with Sen. David Tomassoni, I-Chisholm, that Huber has funding already lined up for the project.

“We have had great, big projects like this that have fallen through the cracks,” said Tomassoni, who, along with Bakk, sits on the IRRRB’s board.

Huber Engineering Woods is a subsidiary of J.M. Huber Corp., which has 4,000 employees worldwide. Huber Engineering employs approximately 1,000 employees in the U.S., with annual sales exceeding $1 billion. It has five other manufacturing facilities in Georgia, Maine, Tennessee, Oklahoma and Virginia, according to a news release from the governor’s office.

“Huber is an innovative and unique leader in the building products industry, and we’re excited about the positive economic impact this investment will make in the region,” Gov. Tim Walz said in a release.

RELATED:

2020 has been a transformational year for Iron Range mining

How the world ran out of everything

Like this article? Gain access to all of our great content with a month-to-month subscription. Start your subscription here.