Michigan Strategic Fund Approves Support for Billerud's Escanaba Mill Transformation Project

Billerud U.S. Production is analyzing whether to bring advanced technology and advanced manufacturing capability to its Escanaba operations, a project that is expected to generate a total capital investment of approximately $1 billion.

Dec. 15, 2022 (Press Release) - Billerud U.S. Production Holding LLC is a subsidiary of Billerud, a leading paper and packaging provider headquartered in Sweden. The company has about 5,800 employees worldwide, with more than 1,200 employees in Michigan. Earlier this year, Billerud acquired Ohio-based Verso Corporation, a leading producer of coated paper in North America as part of its global strategy. The acquisition included Verso's production operations in Escanaba and Quinnesec, Michigan, and Wisconsin Rapids, Wisconsin.

Billerud U.S. Production is analyzing whether to bring advanced technology and advanced manufacturing capability to its Escanaba operations, a project that is expected to generate a total capital investment of approximately $1 billion and retain at least 1,240 well-paying jobs in the region.

Billerud plans to transform its Escanaba operations to produce a more technologically advanced paper product known as paperboard or cartonboard. This multi-ply product is used as packaging for pharma and healthcare, cosmetics, drinks and others, and will allow the company to compete in a growth market for this product. The company's investment into cutting-edge technology and advanced manufacturing capability will serve as a model of sustainable industrial development with significantly improved energy efficiency.

The Michigan Strategic Fund [on Dec. 13] approved a 15-year Forest Products Processing Renaissance Zone estimated to be worth $29.4 million in support of the project. In addition, Delta County, Escanaba Township and Wells Township anticipate authorization of a 15-year Renaissance Zone, and the townships anticipate approval of a 50-percent property tax abatement in support of the project.

As the company partners with its stakeholders on the company's analysis, Michigan is the leading contender for this project. In addition to retaining well-paying jobs for Michiganders, the company's investment will create a significantly bigger impact on the state's overall economy than just the direct jobs being retained. Not only will the investment require that a large number of construction workers be employed for years on this transformation, bringing with them significant investment in the region, but the project will also include investments to improve the infrastructure around the mill.

"We thank the Michigan Strategic Fund board members for their recommendation that Billerud's Escanaba Mill be designated as a Renaissance Zone. This designation is an important step forward in our plans to transform the mill into a world-class paperboard production facility," said Billerud North America Deputy President and General Counsel Kevin Kuznicki. "Our pre-feasibility study is underway and expected to be completed in early 2023. We look forward to continuing to partner closely with our employees, unions, and local and state authorities over the next several months to finalize project and incentive details."

"We are excited to see the Michigan Strategic Fund approve a Forest Products Processing Renaissance Zone for Billerud today, and are grateful not only to the Strategic Fund for its support but to Quentin Messer and his team at the MEDC for its hard, thoughtful work to ensure the availability of this tool for Billerud," said InvestUP CEO Marty Fittante. "With the renaissance zone in place, it will permit Billerud and the state of Michigan to continue to work together to support this project in the Upper Peninsula and we look forward to continuing to be a partner to the company, the state and the community to secure this investment in our region."

SOURCE: Michigan Strategic Fund

PaperAge Editor's note: The Escanaba Mill has the capacity to produce approximately 730,000 tons of paper per year. The mill produces graphic papers used in commercial printing, media and marketing applications, including magazines, catalogs, books, direct mail, corporate collateral and specialty papers used in label and converting applications.