Billerud U.S. Production expects to transform its Escanaba mill to produce a more technologically advanced paper product known as paperboard or cartonboard. (Billerud Americas Corporation photo)

LANSING — The Michigan Strategic Fund will support a project by Swedish paper producer Billerud in Escanaba, retaining at least 1,240 jobs in the Upper Peninsula, Gov. Gretchen Whitmer said Tuesday.

Billerud plans to transform its Escanaba operations to produce a more technologically advanced paper product known as paperboard or cartonboard, according to the Michigan Economic Development Corp. The Michigan Strategic Fund on Tuesday approved a 15-year Forest Products Processing Renaissance Zone estimated to be worth $29.4 million to support the project.

Whitmer also announced a new outdoor recreation innovation hub in Marquette, part of a wide range of projects that EDC officials say will create or retain 1,846 jobs and generate more than $1.2 billion in investment in Michigan.

Billerud U.S. Production is analyzing whether to bring advanced technology and advanced manufacturing capability to its Escanaba operations, a project that is expected to generate a total capital investment of approximately $1 billion.

Paperboard, a multi-ply product, is used as packaging for pharma and healthcare, cosmetics, drinks and others, and will allow the company to compete in a growth market. Billerud’s investment into cutting-edge technology and advanced manufacturing capability will serve as a model of sustainable industrial development with significantly improved energy efficiency, officials said.

In addition to the state’s 15-year Forest Products Processing Renaissance Zone, Delta County, Escanaba Township and Wells Township anticipate authorization of a 15-year Renaissance Zone, and the townships anticipate approval of a 50% property tax abatement.

As the company partners with its stakeholders on the company’s analysis, Michigan is the leading contender for this project, EDC officials said.

The company’s investment will create a significantly bigger impact on the state’s overall economy than just the direct jobs being retained, Whitmer said. Not only will the investment require that a large number of construction workers be employed for years on this transformation, but the project will also include improvements in the infrastructure around the mill.

Billerud has planned to make the upgrades in Escanaba since it acquired the mill from Verso Corp. — along with a mill in Quinnesec — late last year.

“We thank the Michigan Strategic Fund board members for their recommendation that Billerud’s Escanaba Mill be designated as a Renaissance Zone. This designation is an important step forward in our plans to transform the mill into a world-class paperboard production facility,” said Billerud North America Deputy President and General Counsel Kevin Kuznicki. “Our pre-feasibility study is underway and expected to be completed in early 2023. We look forward to continuing to partner closely with our employees, unions, and local and state authorities over the next several months to finalize project and incentive details.”

Other announced projects include investments in Independence Township, Traverse City, Sterling Heights, and Auburn Hills that will build on Michigan’s leadership in electric vehicle manufacturing; community redevelopment projects in Monroe and Detroit; and actions that grow opportunities for Michigan’s small manufacturers and entrepreneurs.

“The projects approved today build on our statewide leadership in advanced and EV manufacturing, bring good jobs to Michigan residents, support vibrant communities, and help increase growth opportunities for businesses ranging from start-ups to established companies, and better prepare our state to compete for business attraction opportunities,” said Michigan Economic Development Corporation CEO and Michigan Strategic Fund President and Chair Quentin Messer Jr.

“We are excited to see the Michigan Strategic Fund approve a Forest Products Processing Renaissance Zone for Billerud, and are grateful not only to the Strategic Fund for its support but to Quentin Messer and his team at the MEDC for its hard, thoughtful work to ensure the availability of this tool for Billerud,” said InvestUP CEO Marty Fittante. “With the renaissance zone in place, it will permit Billerud and the state of Michigan to continue to work together to support this project in the Upper Peninsula and we look forward to continuing to be a partner to the company, the state and the community to secure this investment in our region.”

The Michigan Strategic Fund also approved a $3 million performance-based grant for Hoponassu OZ, LLC to develop Shop House Park Technology and Innovation Hub, an outdoor recreation and product innovation space situated between Northern Michigan University and the Lake Superior shore in Marquette. The project will include live-work-innovate space that will foster collaboration to grow the outdoor recreation and mobility industries.

The project is intended to solidify Michigan’s leadership position in mobility by connecting the state’s mobility sector to the outdoor recreation industry, drawing companies and teams from across the globe to create, develop, test and refine new technologies and vehicles that support activities like overlanding, off-roading, and van life, along with conventional outdoor recreation activities like hiking, biking and paddling. It is also expected to capitalize on private sector funding and capital as well as state and federal grant opportunities.

The development team will be led by owner/developer David Ollila. Project advisors include the Outdoor Recreation Industry Office, InvestUP, Michigan Technological University, the city of Marquette, MICHauto, 100k Ideas, and private consultant Michael Browne.

“David Ollila is a legend in the outdoor recreation industry, and I couldn’t be more excited to see him creating a place where Michigan can leverage the authentic Upper Peninsula outdoor experience while nurturing outdoor entrepreneurs and fostering collaboration with state’s full suite of design, innovation and production expertise,” said Brad Garmon, executive director of the Michigan Outdoor Recreation Industry Office.

“By aligning its natural resources and assets with this economic moment, Michigan has a chance to lead the nation and establish the U.P. and Michigan as the center of excellence in outdoor recreation and mobility innovation,” said Ollila. “This is an opportunity to drive stronger connections between our peninsulas and provide the U.P. an asset that contributes to our collective economy In a way we have not done since Ford was operating plants in the U.P.”

The MSF also approved an additional $1.5 million in grant funding to support Industry 4.0 awareness and preparedness and increase technology adoption with six nonprofit organizations being approved by MSF to administer the grant funding across the state. The grant program provides assistance to small manufacturers looking to adopt Industry 4.0 technologies and in turn, make transformational change to business, process and culture.

Since the launch of the I4.0 Implementation grants in May 2022, the regional partners have awarded 82 grants totaling over $1.9 million of the $2.55 million of available grant dollars. The allocated funds were awarded to small manufacturers in all ten regions of the state, across 38 counties.