Emerging biotechnology offers hope for struggling timber industry

As collapsed segments of Minnesota's timber industry struggle to recover from the national slump in new home construction, the state could see an increase use of timber resources by biotechnology firms.

Companies see big potential in using trees to make a wide range of products - from bio-chemicals to fuels and bio-plastics.

But some experts say Minnesota may be missing opportunities because the state doesn't have a clear plan for attracting those industries.

One company that is utilizing chemicals from trees is Lonza, a Swiss firm that is a leading supplier to the pharmaceutical and life science industries. At its industrial plant in Cohasset, Minn., the company runs the only plant of its kind in the world to commercially produce a natural chemical called arabinogalactan, often called LAG.

Lonza workers extract LAG from northern Minnesota tamarack trees by subjecting tamarack wood chips to water, heat and high pressure. The process dissolves the arabinogalactan.

Site manager Todd Jaranson said LAG is used as an ingredient in dietary supplements for immune system health in both animals and people. It's also used in shampoos, lotions and cosmetics.

When done with the wood chips, the company sells them for use in landscaping. Although the plant, which employs 15, is idle because workers are upgrading it, the facility usually runs for 24 hours a day, every day.

The Lonza plant typically consumes about 9,000 cords of wood a year, and is capable of producing up to three million pounds of powdered LAG per year.

The Lonza plant may be the only facility in Minnesota commercially producing a biochemical product from timber. But that's likely to change.

A recent report from the BioBusiness Alliance of Minnesota projects the worldwide biofuel and biochemical market could approach $585 billion by 2025. That's a six-fold increase from today.

Some people worry Minnesota may be missing big opportunities, because of its permitting process and environmental regulations.

"It's a little tougher to get anything done here, to get a new project through," state Department of Natural Resources forest economist Don Deckard said.

Deckard said there may be opportunities for Minnesota's timber industry in biodiesel, bioplastics and other cellulosic fiber products. But he said Michigan, Wisconsin and Canada are beating Minnesota to it because they have more focused programs that offer capital incentives.

"I'm frustrated with it," Deckard said. "Things are happening all around us and we're just not getting it here.

Before the recession, the Minnesota Legislature allocated money and made tax credits available to promote bio-business.

State officials also developed a one-stop-shop where state agency experts guide potential project creators, and created an expedited environmental permitting process.

Some environmental groups say it's too early to take a position on how biotechnologies affects forests as little public information is available on the processes or the products.

Anna Dirkswager, biomass coordinator in the DNR's division of forestry, thinks using state dollars to entice biotechnology business may be risky as many companies still haven't demonstrated success on a pilot scale. But Dirkswager said policy makers still need to develop a more refined bio strategy.

"I think that if we're not going to be doing that soon, that yes, that would be missing the boat," she said. "We've got to take steps right now to make sure that what we have left of the forest products industry remains competitive and functioning."

As for jobs, Dirkswager doesn't think biotechnology is going to be the savior of the timber industry, which has shed thousands of jobs the past few years.

Minnesota does have some advantages. There are still logging companies left to harvest timber from forests and existing facilities like paper mills and idled lumber mills could adapt new bioprocesses.

A handful of Twin Cities-based companies are developing new uses for timber. Some of them are nearly ready to build pilot plants to test their technology.

Jaranson expects more companies to look for new biochemical uses for trees.

"Minnesota has a great wealth of raw materials in the timber that we have here," he said. "We need to find uses for that resource so that resource does not go to waste. If we don't harvest it and use it, it will get old, it will get disease, it will die."

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