Multinational tissue paper maker Sofidel is getting $5 million in state money to expand its paper mill in Duluth.

On Thursday, Gov. Tim Walz announced that the company will use the funds on a $200 million expansion that’s expected to triple the company’s workforce in the northern Minnesota city. Sofidel America, the U.S. subsidiary of the Italy-based firm, operates the Duluth plant and has additional facilities in seven other states.

The funding comes from two separate pots of state money: the Job Creation Fund and the Minnesota Investment Fund, both of which are administered by the Minnesota Department of Employment and Economic Development.

Sofidel’s Duluth expansion is expected to create 160 new jobs, according to a news release issued by Walz’s office on Thursday morning. The governor, who’s mounting a VP run, said the state’s investment is “creating jobs and reinforcing Minnesota as a top place to live and work.”

Per the release, the expansion project calls for constructing an automated warehouse for product storage and distribution. Construction is expected to begin late this year and continue through late 2026, according to the release.

Finance & Commerce first reported on plans for the expansion in late August. At the time, the newspaper reported that the existing facility spans almost 400,000 square feet. The expansion would more than double that with 600,000 feet of new space.

In the news release, Sofidel’s integration manager Simone Giacomelli said that in Duluth, the company has “found a favorable operating environment, with a skilled and dedicated workforce, and strong partnerships with local institutions and the community.”

“These factors encouraged us to further invest in this facility,” he said.

Though Sofidel has been operating in the U.S. since its 2012 acquisition of Florida-based Cellynne Tissue Co., the Italian firm is a relatively new entrant to the Minnesota market. At the start of 2024, Sofidel acquired the Duluth paper mill, then owned by Wisconsin-based ST Paper.

The Duluth paper mill had changed hands just about three years before that, when Ohio-based Verso Corp. sold it to ST Paper.

Notably, this isn’t the first time the paper mill has received money through the Minnesota Investment Fund; when it was still owned by ST Paper, the state gave the facility $3 million through the fund, the Star Tribune reported earlier this year.

Meanwhile, the city of Duluth is also kicking in some incentives for the project: News station KBJR-TV on Wednesday reported that the city council this week approved $14 million in tax assistance for the project.