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Sneak Peak: APEX Annual Meeting and Celebration

Tuesday, December 24, 2013
On January 30, 2014 the APEX annual meeting and 10 year anniversary celebration will take place at the Kitchi Gammi Club. APEX investor-members will hear from a panel of speakers that includes a few of the proud founders of the organization: Nancy Norr, Bruce Stender and David Gaddie. APEX Board Chair, Peter Hedstrom will moderate the panel. After the business meeting, APEX investor-members will enjoy dinner together and then hear from guest speaker, Matthew Godfrey, CEO of Better City, an economic development company. Godfrey obtained a Bachelor of Arts, Finance Degree with a minor in Spanish and a Masters in Accounting. While in college he became an NCAA All-American in Track and Field.

He was 29 when elected to his first term as Mayor of Ogden and was the youngest Mayor to be elected in the history of Ogden and was the youngest full-time Mayor in the country. He served as Mayor for 12 years.

Matthew has been listed as one of Utah’s “Rising Stars” and profiled as one of the top 40 stellar professionals under the age of 40 as well as being listed as one of the top five most influential people in Utah for business. He has twice been named as one of the most influential people in Utah for sports. During his tenure he recruited more than two-dozen outdoor company brands to Ogden, revitalized more than 150 acres of downtown, attracted more than $1 billion of private investment and brought in more than 8,000 jobs. His last year in office his community lead the nation in job growth.

APEX investor-members will receive formal invitations to the annual meeting in early January. In the meantime SAVE THE DATE, and contact Sandy Johnson for additional information.

New Face at APEX – Emily

Tuesday, December 24, 2013
APEX recently welcomed Emily Nygren as the organization’s Administrative Intern. Nygren is a senior at the University of Minnesota Duluth, completing coursework toward majors in Political Science and Psychology. Nygren has previously held internships with the Duluth Central Labor Body, St. Louis County Law Library and HOMELine. Her responsibilities will include assisting the APEX team with investor-member events, industry research and other related administrative functions within the organization. Please welcome Emily to the APEX team.

APEX Pinnacle Recognized at Site Selectors Forum

Tuesday, December 24, 2013
While in Chicago at the Annual Competitiveness and Site Selectors Forum hosted by the Mid-America Economic Development Council, APEX President and CEO Brian Hanson accepted an award recognizing APEX’s marketing efforts. The APEX Pinnacle received the first place award for best newsletter. As part of the recognition, APEX will also be highlighted in an advertisement in the January issue of Site Selection magazine. “Receiving this award in front of a crowded room of key industry site selectors was a great way to showcase the marketing efforts of our organization. The recognition is another example of how we continue to leverage the APEX brand outside of northeastern Minnesota and northwestern Wisconsin to help drive additional attention and investment to the region,” stated Hanson. The APEX team extends a sincere THANK YOU to our friends and partners at Giant Voices for lending their talents to the Pinnacle.

2013 Breakfast Club Results

Tuesday, December 24, 2013
Through September and October, APEX hosted the annual Breakfast Club meetings with investor-members. This year a total of 43 members shared insight on the organization’s mission, marketing and communication efforts, membership, industries of focus and critical issues to help the APEX team prioritize strategic efforts going into 2014. As in the past, the small group format facilitated intimate discussion between the APEX staff and investor-members. At the meetings, APEX also reported results of the 2013 strategic plan implementation, stating that the ten goals identified for 2013 will be accomplished by year-end. For the executive summary of the Breakfast Club results, please contact Sandy Johnson.

Talent Attraction and Retention Efforts Underway

Tuesday, December 24, 2013
Pathway to Careers

On October 29, APEX and TwinPortsConnex hosted a booth at investor-member Northland Foundation’s Pathway to Careers event at the Duluth Entertainment and Convention Center. More than 1,100 high school students from around the region were in attendance to learn about career paths in various industries and hear from business, industry and academic professionals. The students also heard from several panelists and speakers, including APEX immediate-past Board Chair, Al Hodnik, President and CEO of ALLETE , about their own personal career paths.

The expo portion of the event featured more than 60 employers and educational institutions. To engage the students, the APEX and TwinPortsConnex booth featured a spin-wheel game with questions about in-demand occupations in northeastern Minnesota. Watch a short video from the event, featuring APEX’s Sandy Johnson, provided by the Northland Foundation.

Utility Economic Development Association

In late October, Brian Hanson was a guest at the Kellogg School of Management’s Workforce Development course at Northwestern University, hosted by the Utility Economic Development Association. Hanson and Sue Wegener, with the City of Duluth, were guests of APEX investor-member, Minnesota Power (link: http://www.mnpower.com/). The course contained information about best industry practices for collaboration and marketing efforts relating to workforce development.

APEX Marketing and Target Industry Updates

Tuesday, December 24, 2013
Throughout late October, November and early December, the APEX team traveled extensively to promote the region’s capabilities and assets for both the data center and clean energy/biofuels industry strategies.

Data Center Strategy

APEX Director of Business Development, Elissa Hansen, attended several events, including Data Center World in Orlando, FL and two site selector trips to promote the region’s data center recruitment strategy. In October and December, Hansen met with several site selection firms in Chicago specifically to disseminate information about Lake County’s mega data center site. Brian Hanson extended his trip to Chicago in December for the Annual Competitiveness and Site Selectors Forum hosted by the Mid-America Economic Development Council to join Hansen in meeting with site selectors and companies interested in the region’s data center credentials.

Clean Energy and Renewables Strategy

Wood Fiber Availability Study
On November 8, APEX released findings following an extensive wood fiber availability analysis with the objective to utilize the information to assist in the promotion of new private sector investment to support forest resource processing and manufacturing operations in the region. At the request of a regional team comprised of Minnesota Power, APEX, ALLETE Clean Energy, Great River Energy, and the Iron Range Resources and Rehabilitation Board (IRRRB); TSS Consultants (TSS), of Rancho Cordova, CA, conducted the wood fiber supply analysis that addresses key factors and criteria regarding sustainable availability of forest resources (roundwood and biomass).

With this study, APEX and the region will promote the expansion of existing, or recruitment of new, value-added processing and manufacturing enterprises that could step in and utilize abundant forest resources in northeast Minnesota and northwest Wisconsin. “There is tremendous potential to increase investment at existing facilities and to site new value-added manufacturing that has the capacity to convert underutilized tree species to products including specialty chemicals, transportation fuels and other products,” said Brian Hanson, President and CEO of APEX.

After considerable research and investigation, the regional team focused on three key target market areas (TMAs) within the region for this fiber resource review. The TMAs represent a 75-mile radius and are considered economically viable for raw material haul distances.

Interviews with resource managers and forest products industry representatives within three key target market areas identified for the study (Grand Rapids, Hoyt Lakes and Duluth) confirmed that there are a number of underutilized tree species. In addition, over eight million acres of forests are certified as sustainably managed under the Forest Stewardship Council and/or the Sustainable Forestry Initiative programs.

APEX, Minnesota Power and other regional economic development partners have utilized the TSS analysis to develop an attraction and retention strategy and to cost-justify the business case for companies researching or conducting business in the region. APEX investor-member, Nancy Norr, Minnesota Power’s Director of Regional Development, commented, “This assessment strengthens our position that there is fiber available to promote additional growth for our current forest and paper industries and to support new development opportunities. The regional team will continue ongoing dialogue with policymakers to enhance the region’s competitiveness.”

To receive additional information, contact Elissa Hansen Read Executive Summary

World Bio Markets

In late October, Elissa Hansen attended the World Bio Markets conference in San Francisco, CA with Lisa Hughes from the Department of Employment and Economic Development (DEED), and Steve Peterson from Iron Range Resources and Rehabilitation Board (IRRRB). The economic development team met with key Biochemical and Biofuel prospects from across the country. APEX also utilized the findings of the wood fiber availability study to explore expansion opportunities for additional revenue streams within the forest products industry.

Inside LHB

Tuesday, December 24, 2013
On Monday, November 4th APEX hosted the third APEX Insider at LHB. Over 30 investor-members attended the event to tour the Company’s remodeled and expanded offices in downtown Duluth. LHB showcased the $1.8 million investment in the Company’s headquarters located in the Lake Superior Place building. “In addition to expanding our physical space, LHB invested in technology that allows our employees the ability to work from the office location they desire on projects being managed in either office. Recruiting and retaining the best talent is paramount to our success and where employees reside is a major component of employee satisfaction,” commented Bill Bennett, LHB CEO.

“APEX was delighted to provide our investor-members the opportunity to tour LHB’s downtown Duluth facility and highlight the outstanding growth they have recently experienced,” commented APEX President and CEO, Brian Hanson. “LHB has grown from a structural engineering firm to a complete full-service firm, greatly contributing to the development of the regional economy.” 

Early Childhood Education Has Economic Benefits

Tuesday, December 24, 2013
On November 18th, the Northland Foundation and APEX co-sponsored a business leader’s forum featuring Rob Grunewald, Economist from the Federal Reserve Bank of Minneapolis. The luncheon, attended by more than 40 local business executives, focused on “Minnesota’s Economic Outlook and the Role of Early Childhood Education.” Grunewald presented both an economic update for 2013 and projections for 2014. He cited a modest gain in employment throughout the remainder of 2013 and for early 2014, stating unemployment forecasts should remain flat in 2014.

Grunewald shared statistics on early childhood education and the long-term ROI that can be achieved through targeted funding toward Minnesota youth. He revealed the direct correlation between funding early childhood education starting at age 3, and how it supports the long-term health of children, parents and business professionals in Minnesota.

Grunewald highlighted a new initiative: MinneMinds – where businesses across the state dedicate funding for early childhood education scholarships. "As Minnesotans, our goal should be to prepare our children to enter kindergarten, ready to succeed in school and life, regardless of their personal circumstances. You don’t even have to like kids to realize the benefits of funding and nurturing the next generations of Minnesotans," joked Rob Grunewald. He went on to say, "an investment in early education truly pays off in the long run." Link to slides & photo that Barb took of Grunewald, Elissa & Dave McMillan. Watch presentation

Innovation and Expansion at Lake Superior College

Tuesday, December 24, 2013
Dr. Patrick Johns Addressed APEX Board of Directors and Investor-Members

At the November APEX Board of Directors meeting, Dr. Patrick Johns, President of Lake Superior College (LSC) shared plans of the College’s expansion of both programming and physical space with investor-members. Johns indicated that LSC is responding to the local demand for increased course offerings, specifically in aviation and integrated manufacturing. To meet this demand, LSC will expand their campus presence to downtown Duluth, at the former Advanstar building. Johns expects the renovation to be complete and that LSC will occupy the facility by mid-2014.

Jenny Swenson, LSC's Dean of Business and Industry, and Steve Wagner, Executive Director of Workforce Development, accompanied Dr. Johns for his presentation to APEX investor-members. Swenson updated investor-members on LSC's Airframe and Powerplant mechanics certification program. She indicated that the program is nearing approval and accreditation from both the Minnesota State College and Universities (MNSCU) and Federal Aviation Administration (FAA). LSC is also assessing the need for pilot, aviation management, avionics and unmanned aircraft programming. Swenson also provided insight on enhancements to the integrated manufacturing program, specifically regarding the certified Haas CNC machine training, the fabrication lab (Fab Lab) expansion and opportunities to engage with the community. Swenson shared that LSC would ultimately like to connect both the aviation and manufacturing coursework to a four-year degree program through partnerships with other academic institutions.

Steve Wagner provided an update to investor-members on Minnesota Job Skills Partnership and low-income and incumbent worker grant opportunities in the region. Wagner shared a local success story, featuring Cirrus Design and SOAR Career Solutions, that enabled a class of participants the ability to receive coursework and on-the-job training for assembly positions at Cirrus Design.

APEX Chairman, Peter Hedstrom, complimented LSC on the responsiveness to accommodate the needs of the business community saying, “it’s exciting to see the College expanding into downtown Duluth; not only for the purpose of generating additional capacity for the workforce but also to see increased energy and economic impact due to the increased student activity."

Wood Industry Finds Second Wind in APEX Region

Friday, December 13, 2013

It seemed like a no-brainer last month when the Area Partnership for Economic Expansion (APEX) announced that a new study has found Northern Minnesota and Wisconsin have an extensive supply of underutilized wood species.

For many people, lumber, particleboard and paper come to mind as likely end uses. But APEX has a broader goal.

“We’re on the cusp of several great developments in the area of cellulosic fuels and biochemicals,” said APEX President and CEO Brian Hanson. “Our region could see some of that investment within the next five years.”

It’s already happened at Sappi’s Cloquet mill. Late in October, the company held an open house to demonstrate how it converts wood pulp into a specialized cellulous product that’s being used in everything from clothing to processed food.

“It’s one of the most versatile materials on the face of the Earth,” said Deece Hannigan, Sappi vice president of procurement and fiber resources. Beyond textiles and consumables, its pulp byproduct can be added to pharmaceutical drugs as a binder, be converted into hard plastics and become a component in explosives, just to name a few uses.

It received far less publicity regionally, but UPM, owner of Blandin Paper in Grand Rapids, also has entered the biochemical market. In June, the Helsinki-based corporation entered into a joint development agreement with U.S.-based Renmatix, which manufactures celluslosic sugar for the biochemical and biofuels markets. The long-term goal is to make cost-competitive bio-based alternatives to petrochemicals.

Similar processes can be developed at other pulp and paper mills in Minnesota and Wisconsin. For economic developers, the challenge is to partner existing wood processors, which have already invested hundreds of millions of dollars into their plants, with start-up biofuel or biochemical companies capable of producing high-demand new products, said APEX Director of Business Development Elissa Hansen.

“We did a fair amount of outreach (to mills) in the past, but at that time, timber and paper companies were busy. Then the business environment changed. The recession brought construction to a halt,” reducing the demand for studs and wood panels. “Electronic devices reduced the demand for paper. Now, mills are more interested in talking,” Hansen said. “None of these new companies would be directly competing with paper mills, but they could become partners (with existing mills) to diversity their output and help them stay in business. I think every paper company is looking at other ways to use their pulp right now.”

Environmental factors

The area’s plethora of trees isn’t the only factor providing impetus for new wood fiber uses.

Sappi officials say population growth, combined with higher third-world incomes, has led to growing demand for better clothing. The supply of cotton will soon become insufficient, and cellulous is a likely replacement.

“The same can be said for things like plastics,” Brian Hanson said. “The base for plastics is moving from petroleum to renewables such as ag (corn in particular) and wood. We know it’s coming.”

Sappi, a worldwide corporation with $6 billion in 2012 sales, had sufficient resources to finance its in-house venture into cellulosic fiber. The same can’t always be said of start-up firms that develop new wood-based products.

“Wood fuel and bio chemical companies, because of the emerging technology situation they’re in, can’t get typical bank financing. It takes either revenue bonds or non-traditional financing,” Elissa Hansen said.

“The amount of money they’d be looking at would go way beyond what we tend to have available to make developments happen in this region,” Brian Hanson explained. “There are certain large equity houses such as Piper Jaffrey that are interested in alternative type projects. That’s the kind of firm they might turn to.”

Another trend that’s developing is for established petrochemical firms to invest in emerging biochemical companies. As trends change, it’s anticipated that corporations such as Dow and DuPont will acquire their biochemical counterparts.

Regional assets

Northeastern Minnesota and Northwestern Wisconsin have an abundance of infrastructure to support large new wood-based industrial investments. The same features that originally attracted the forest products industry more than a century ago – experienced loggers, ample water, transportation corridors and strong utilities – continue to be major assets moving forward.

“Having the knowledge, skills and supplier network does give us a competitive advantage,” said Elissa Hansen.

Corn-based ethanol is probably the best-known ag-based fuel product to gain market momentum, but wood pellets could also become a viable product, particularly in Europe. In the United States, pellets primarily power industrial boilers. Overseas, they’re a popular home heating fuel, and the wood supply might not be sufficient to meet demand. Development of a wood pellet plant in our region is considered likely, economic developers say, and pellets could be exported on ships.

Key to success for the next generation of wood-based products is development of commodities that will be profitable without a subsidy, Brian Hanson said.

Although ethanol received a tax subsidy for many years, similar incentives might not be available to help other bio products get off the ground.

Having a favorable business climate will help, he added, and some trade associations already are lobbying state lawmakers to help accommodate the next generation of forest-based products.

Success came quickly for Sappi, which modified its mill and began production within a 16-month time frame.

“Our goal was to be at budget by the end of our fiscal year on Oct. 1 and we made that goal,” said Cloquet mill Managing Director Rick Dwyer.

Tss Wood Study Executive Summary

APEX Bio-Fuel Innovation Strategy

Published in Business North: