CLICK BELOW TO HEAR COMMENTS FROM MARTY FITTANTE, CEO INVEST U.P.
CLICK BELOW TO HEAR COMMENTS FROM STATE REP. DAVE PRESTIN
CLICK BELOW TO HEAR COMMENTS FROM STATE SEN. ED MCBROOM
Upper Peninsula business and political leaders expressed disappointment following Tuesday’s announcement from the Swedish forest products company Billerud that it would not be expanding its Escanaba paper mill.
The $2 billion project to convert the mill from making coated paper to producing cartonboard. The State of Michigan had pledged $200 million to help the project become a reality.
“The press release today from Billerud was certainly not the news we wanted to hear,” Upper Peninsula State Senator Ed McBroom (R-Norway) told RRN News. “We (state lawmakers) have tried to help various projects, including this one, with infrastructure needs, making the site more ready for business. That was put on the table to help convince Billerud that investing in Escanaba was the right thing to do.”
While Billerud officials went out of their way during a Tuesday conference call that the company was committed to the Escanaba mill, the news that Billerud was not making that long-term investment into the mill came as hard news to swallow.
“It was definitely a gut shot,” state representative Dave Prestin (R-Cedar River) told RRN News Tuesday night. “It’s not something that I really saw coming down the pike. The focus now is on trying to maintain viability, as far as those funds, for projects and for development in the U.P., on an institutional basis.”
Marty Fittante, the CEO of the economic development agency Invest U.P., said the news was “disappointing”. But he says this was not totally unexpected.
“The fact that the project hadn’t proceeded at the (projected) pace probably was some indication of that,” Fittante told RRN News. “I think Billerud did the best they could to try to re-scope it. As time continued, I think we got some sense that, while they were working in good faith to figure out a path, market conditions were making it more difficult. Inflation, construction costs, certainly made a difficult project more difficult.”
When the announcement was made in 2022, politicians on both sides of the aisle, including Gov. Gretchen Whitmer, all said that the project would solidify the mill’s existence in Escanaba for generations to come.
“Modernizing this plant is a hugely-important thing for the future and security of the forest products industry in the Upper Peninsula,” McBroom said. “For loggers, truckers, the whole industry, not just in the Delta County and Escanaba area, but across the entire UP and northern Wisconsin, this was a really big deal.”
“It’s the largest investment ever made into the Upper Peninsula,” Fittante said. “I don’t think this changes the effort that went into that. I don’t think you can look at the end result now, and say anything other than, what a great effort it was.”
And so what about the $200 million?
“There was a termination of the grant agreement that was signed today,” Fittante said. “The $200 million will go back to the state’s general fund for reallocation. Now it’s up to state lawmakers to say, how do you keep that money in the Upper Peninsula?”
“There lies the challenge,” Prestin said. “Trying to make the argument that the UP is definitely overdue, and that an investment like this, especially a multi-generational one like this, is needed for its continued viability and progress. The Upper Peninsula is always on an economic tightrope.”
“I’ve had some preliminary talks with some of the stakeholders and the MEDC. My hope is to somehow, that we’re able to sandbox this money into a fund that’s for UP development,” Prestin continued. “And really get to work on attracting business development and industry into the UP, and make something happen. This kind of money can pave the way and open up doors that might not otherwise necessarily be opened.”
If that $200 million, or some of it, is to stay in the Upper Peninsula, chances are that Invest UP would have a hand in directing those resources.
“I think the message from my perspective is, the strength of what brought this investment together was really one that was born in collaboration and partnership,” Fittante said. “I think we need to continue that type of approach to say ‘how do we strengthen opportunity around, not only this mill, but forest products in general, and extraction even more broadly. Let’s continue that same approach that was just successful in landing this investment. There’s still opportunity in front of us.”
CLICK HERE to read the Billerud press release, and to listen to the conference call from Tuesday morning.
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