News and Events
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
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."
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.”
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.
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.
Published in Business North:
Left to Right: Mid-America EDC President Tom Lambrecht of Great River, APEX President & CEO Brian Hanson, and Executive VP & General Manager of Site Selection Magazine Ron Starner
Duluth, Minnesota: The Area Partnership for Economic Expansion (APEX) announced today that the organization’s newsletter, The Pinnacle, won 1st place in its division for the Mid-America Economic Development Council (MAEDC), 2013 Annual Economic Development Awards.
MAEDC presented its annual Economic Development Awards at the 2013 Mid-America Competitiveness Conference and Site Selector Forum, held December 8-10 in Chicago, Illinois. APEX entered and was awarded 1st place for The Pinnacle under the small division Newsletter category. Awards were given in two market categories, large (annual marketing budget over $100,000) and small (annual budget under $100,000).
“APEX has received a great deal of positive feedback since partnering with Giant Voices on redesigning and updating The Pinnacle newsletter,” stated Brian Hanson, APEX President and CEO. “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,” continued Hanson. As part of the recognition, APEX will also be highlighted in an advertisement in the January issue of Site Selection magazine.
MAEDC is a multi-state association dedicated to being the leading resource for education, making connections, and sharing best practices for economic development professionals. They have sponsored these Economic Development Awards to recognize and stimulate creative marketing efforts by economic development organizations throughout their ten-state region.
Download printable version of this press release:
Download official MAEDC award recipient press release:
In the last five years northeast Minnesota and northwest Wisconsin, along with other regions of the country, have experienced reductions and closures resulting in underutilization of available wood fiber. 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.
Numerous researchers and State sponsored studies have confirmed there is significant opportunity to increase Minnesota's timber harvest rates over and above those of the past decade on a long-term sustainable basis. Therefore, it is important to note the harvest levels used in this study are conservative and below the maximum sustainable harvest levels. "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 northeast Minnesota and northwest Wisconsin for this fiber resource review. The TMAs represent a 75-mile radius and are considered economically viable for raw material haul distances.
Target Market Areas Map
Using the US Department of Agriculture Forest Inventory and Analysis National Program data and published work from the Minnesota Department of Natural Resources (MN DNR), TSS identified the annual availability of roundwood, biomass and other forest resources potentially available for utilization in each of the three regions. "Our assessment confirmed that there are significant volumes of underutilized trees species within the three target market areas and these volumes are available on a sustainable long term basis" noted Tad Mason, CEO for TSS.
The following numbers conservatively represent the estimated available feedstock (green tons (GT)/year) in each target market area studied net of current consumption.
Interviews with resource managers and forest products industry representatives confirmed that there are a number of underutilized tree species in northeast Minnesota and northwest Wisconsin. 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. 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."
Northern Minnesota and Wisconsin have an extensive supply of underutilized wood species, according to an extensive wood fiber availability analysis funded by the Area Partnership for Economic Expansion (APEX).
“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” APEX President and CEO Brian Hanson said in a prepared statement announcing the results.
Results of the analysis will be used to promote new private sector investment in existing forest product and manufacturing operations and the recruitment of new, value-added processing and manufacturing enterprises, APEX said. It was conducted 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, Calif., performed the analysis and addressed key factors including sustainable forest resources such as roundwood and biomass.
The latest study is among numerous studies that have confirmed there is significant opportunity to increase sustainable regional timber harvest rates over and above those of the past decade.
A regional team focused on three key target market areas (TMAs) within northeast Minnesota and northwest Wisconsin. They represent a 75-mile radius and are considered economically viable for raw material haul distances.
“Our assessment confirmed that there are significant volumes of underutilized trees species within the three target market areas and these volumes are available on a sustainable long term basis” said TSS Chief Executive Tad Mason.
More than 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.
“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,” said Nancy Norr, Minnesota Power’s director of regional development.
To follow the article visit:
Please join us for a Business Leaders’ lLncheon Forum featuring:
Federal Reserve Bank of Minneapolis Economist Rob Grunwald
"Minnesota's Economic Outlook and the Role of Early Childhood Education"
The Northland Foundation and APEX are pleased to invite you to enjoy lunch and hear from economist Rob Grunewald. Grunewald will present the Minneapolis Fed’s outlook for the Minnesota economyand discuss long-run trends for the state’s labor force. Grunewald will also show how early childhood education plays a key role in building Minnesota’s future workforce.
Monday, November 18, 2013 Noon-1:30 p.m. (lunch provided)
Holiday Inn Downtown Duluth Conference Center, Lyric Room (first floor)
Free of Charge. ONLY 12 SEATS STILL AVAILABLE. Please RSVP by November 14th
to Sandy Johnson, APEX, email@example.com or (218) 740-3667
Rob Grunewald conducts regional economic research and co-authors the Minneapolis Fed’s “Beige Book” report on current economic conditions. Grunewald regularly speaks to business, community and school groups about the Federal Reserve and the regional economy. He co-authored “Early Childhood Development: Economic Development with a High Public Return” (Jan. 2003), an economic policy paper, which has been featured in the media, legislative hearings, and seminars throughout the United States. Grunewald holds a bachelor’s degree in economics and religion from St. Olaf College and a master’s degree in applied economics from the University of Minnesota.
The APEX Insider provided investor-members the opportunity to tour the recent expansion and remodel of the Company's downtown Duluth location. LHB recently invested over $1.8 million in the Company's headquarters located in the Lake Superior Place building which is owned by one of their long-term clients, Minnesota Power. With the expansion and remodel, LHB now occupies approximately 43,000 square feet and the entire 4th, 5th and 6th floors of the 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." Bennett also conveyed excitement at the opportunity to host an APEX Insider, "It was LHB's pleasure to host the event at our office and showcase the diverse talents of our employees," stated Bennett. "We have a strong team of multi-faceted professionals, giving us a unique balance between an engineering firm and an architectural firm."
LHB has served the Duluth/Superior and Twin Cities markets for over 47 years and has experienced significant growth in the past five years. As a result, LHB has grown from 180 employees in 2008 to a combined total of 250 in both markets. With annual gross revenue of around $28 million, LHB estimates that the Company provides design services for approximately $300 million in construction each year spread throughout the various infrastructure and building markets it serves.
For information on LHB or APEX, please visit their respective websites at www.LHBcorp.com or www.APEXgetsbusiness.com.
December 8th - 10th, APEX President and CEO, Brian Hanson, will attend the Mid-American Economic Development Council's annual Competitiveness and Site Selectors Forum in Chicago. The APEX Pinnacle has been selected as a finalist for recognition as an outstanding communication piece for the organization's investor-members, partners and stakeholders. 2013 Economic Development Award recipients will be announced at a luncheon on Monday, December 9th.
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