DULUTH, Minn. (From news reports) -- Less than a year after taking over a once-idled mill, the Sofidel Group, an Italian multinational papermaker, hopes to grow its local operations substantially. Sofidel aims to invest at least $180 million in its new Duluth mill and probably closer to $250 million when all is said and done, said Chad Ronchetti, director of Duluth's planning and economic development division. That expansion promises to bring another 160 jobs.
The Duluth Economic Development Authority last reviewed a Tax Increment Finance District plan that would facilitate expansion of the Sofidel Paper Mill in the Spirit Valley neighborhood.
Sofidel acquired the plant earlier this year from ST Paper. The international producer of sanitary and household tissue products has a history of making large investments in its newly acquired properties.
A budget for the TIF improvements shows that $5 million is allocated toward site improvements, $10 million toward utilities, $2.8 million toward administrative costs and $6.2 million toward other improvements. The expanded property would extend between the St. Louis River and Central Avenue on one side and roughly from I-35 to Raleigh Street on the other.
TIF assistance would be needed, according to the city, because a development is unlikely to occur in the foreseeable future solely through private investment.
"The developer indicates they would not have gone forward without tax increment assistance," the TIF plan says. During an Aug. 20 review, the Planning Commission determined the TIF proposal conforms to the city's general development plan.
City officials are supporting the plan because it includes a specialized manufacturing facility, according to the TIF document. Specific details are not revealed in the document.
As BusinessNorth reported in February, the 56-year-old parent company established Sofidel America in 2012 through the acquisition of Cellynne tissue company. The initial purchase included an integrated plant in Haines City, Fla., and converting plants in Green Bay and Henderson, Nev. (converting plants take bulk rolls of paper and prepare them for sale as specific products, such as paper towels, toilet paper or napkins.) The Henderson plant later was moved to Las Vegas, where it remains a converting plant.
Other U.S. investments included its first greenfield plant, constructed during 2018 in Circleville, Ohio
That was followed by a 1.8 million-square-foot production plant in Inola, Okla. The $360 million mill is an integrated facility that can produce 120,000 tons of tissue annually.
A second Circleville investment was announced last September. The project includes the construction of a new building that will house a new paper machine, which will start operation in Q3 2025 with a production capacity of 70,000 metric tons per year. The project cost is $185 million.
"Sofidel America has production sites in six states, and this operation will enable us to further meet the growing demand from our customers and continue to fuel our growth in this country," CEO Luigi Lazzareschi, said Sept. 13 about the Duluth acquisition.
Holdings also include the Horsham, Pa., corporate headquarters and a converting plant in the Hattiesburg, Miss.
