$105M Biotech Facility Lands $21M In Financing
Golden Valley-based Segetis, Inc., was given the green light Tuesday to receive more than $20 million from a state agency to help finance its planned $105 million biotech facility in Hoyt Lakes.
Segetis produces sustainable materials with renewable biochemicals rather than fossil fuel-based chemicals in things like flexible plastic, cleaning products, and consumer goods.
The facility will initially use corn sugars to produce its biochemicals but said it will transition to the use of wood by 2018. Construction of the plant is expected to be completed by 2015.
The Iron Range Resources & Rehabilitation Board (IRRRB) met in the state office building in St. Paul Tuesday morning to discuss providing $21.2 million in funding to help finance the construction of the plant. The IRRRB announced approval of the funding early Tuesday afternoon.
Segetis will fund 70 percent of the facility development itself, or about $74 million. According to IRRRB documents, Segetis also plans to apply for a $7.1 million grant for the facility’s construction from the Department of Employment and Economic Development.
The IRRRB cited a study from the University of Minnesota that estimated the new plant will have an annual $55 million economic impact on the region and will directly and indirectly support more than 545 jobs. The plant itself is expected to add 50 jobs and indirectly support 140 supply chain jobs, while the construction phase is expected to bring 245 jobs to the region. The IRRRB said it also expects the facility’s conversion to the use of wood-based chemicals to bring 20 more direct jobs and 230 more indirect supply chain jobs.
Segetis currently has 30 employees and has raised more than $60 million in capital over the last five years.
IRRRB Commissioner Tony Sertich said the Segetis project is an ideal fit for the Iron Range and would help position the region as a leader in the biochemical economy.
“By partnering with Segetis, we will be putting our flag in the ground as a region interested in developing a cluster of biochemical businesses willing to use our wood resources, improve our environment, and create good jobs on the Iron Range,” Sertich said in a statement.