DULUTH — Sofidel’s plans to expand its paper mill operation got a boost this week with the Minnesota Department of Employment and Economic Development’s announcement that it will provide nearly $2.4 million in assistance to help clean up the site where the company aims to build.
Sofidel has pledged to add another 160 employees to its current Duluth payroll of about 80 by the time its proposed project is completed. The company reports its employees earn an average of about $32 per hour.
ADVERTISEMENT
But contaminants on lots surrounding the existing paper mill have complicated the company’s plans, as much of the property formerly was home to scrapyards and foundries that left trails of pollution in their wake.
The state cleanup aid is expected to leverage at least $87.2 million in private investment.
Sofidel currently operates out of a 476,000-square-foot production plant in Duluth. But the pending project would lead to the construction of a 295,000-square-foot facility to convert the mammoth rolls of tissue paper that come off the line in Duluth into finished consumer products.
Another 76,000-square-foot warehouse to store raw materials and a new 108,000-square-foot automated warehouse to handle finished products would also be added to the mix, more than doubling the footprint of the current Duluth operation.
The overall expansion costs are expected to total about $200 million.
In addition to the cleanup cost assistance it stands to receive from DEED, the city of Duluth will offer Sofidel $14.3 million in tax-increment financing. TIF is a form of public subsidy that captures new property taxes generated by a project and uses them to defray certain qualified development costs for a period of time.
Further state aid also is envisioned for the expansion in the form of a $3.1 million forgivable loan from the Minnesota Investment Fund and $1.7 million from the state’s Jobs Creation Fund.
ADVERTISEMENT
The Italian-based papermaker acquired its Duluth mill from ST Paper in January 2024, about one year after it reopened under the ownership of ST Paper.
ST Paper converted the facility to produce tissue, which goes into products such as toilet paper, paper towels and facial tissues. The mill previously manufactured coated papers of the sort often used in magazines and advertising circulars. As demand for that type of paper waned, Verso Paper, the previous owner, shuttered the plant in 2020.
The Duluth mill first opened in 1987 and has changed hands repeatedly. But Sofidel’s leadership says it intends to bring newfound stability to the facility, investing with an expectation of long-term ownership.
The Trust Project
