Sofidel Group to invest up to US$250 million in Duluth mill expansion, adding 160 jobs
Italian paper giant planned significant growth at its Duluth facility, supported by a potential US$20.5 million in city tax incentives
Chad Ronchetti, the director of Duluth’s planning and economic development division, stated that Sofidel is preparing to invest a minimum of US$180 million into its new Duluth facility, with the total investment likely reaching close to US$250 million. This expansion is expected to create an additional 160 jobs, adding to the approximately 80 positions already in place since Sofidel purchased the mill from ST Paper in January.
ST Paper had revitalized the previously dormant mill by installing a new paper machine in 2023, bringing the facility back to life. However, Sofidel’s ambitious plans for the Duluth mill require further support.
To facilitate this expansion, the city of Duluth is considering a tax-increment financing (TIF) plan that could provide over US$20.5 million in financial aid. The Duluth Planning Commission is set to hold a special meeting to review the proposed support package for Sofidel’s expansion.
Tax-increment financing is a government subsidy method where new property tax revenues generated from a development are used to cover certain eligible expenses. After the subsidy period ends, the tax revenues revert to the local government entities, such as the county, school district, and city, without interruption.
The proposed expansion at the Duluth mill is anticipated to begin in 2025, with the TIF agreement slated to expire by 2035 or possibly earlier.
Currently, the Duluth mill produces large “parent rolls” of tissue paper, each weighing around 4,000 pounds. These jumbo rolls are sent to other facilities where they are converted into consumer products like toilet paper, facial tissues, napkins, and paper towels.
Sofidel plans to build a conversion facility and an automated warehouse in Duluth, which will allow the company to ship finished products directly from the site. The expansion will involve the construction of two new connected buildings, adding nearly 589,000 square feet to the mill’s existing layout.
The Duluth paper mill has experienced several challenges and ownership changes over the years. It previously produced supercalendered paper, commonly used in catalogs, corporate reports, and advertising materials. However, as demand for these products declined, the plant faced difficult market conditions.
In 2020, Verso idled the plant, resulting in the loss of over 220 jobs. The facility remained closed until ST Paper purchased it and shifted production to tissue paper, a more stable market segment.
Sofidel, which is the second-largest tissue paper producer in Europe, entered the U.S. market in 2012 and has since expanded its presence, focusing on producing private-label products for American retailers. The company now operates seven mills across the United States.
