ST. LOUIS PARK -- Since its inception more than a century ago, Minnesota's forest products industry continues to be a strong base in the state's economy. Forest-based industries make up the fourth largest manufacturing sector in the state, adding $3.2 billion to the state's economy and employing more than 40,400 people according to Minnesota Department of Natural Resources. Recently, industries such as bio-based energy and biochemicals have begun to emerge as viable opportunities for processing of wood, creating both opportunities and challenges for the industry.
In the last decade, pieces of Minnesota's traditional forest industry have been under attack. The housing market crashed, and the subsequent decline in construction material combined with unusually high timber prices across the state created a perfect storm to negatively affect Minnesota's forest-based economy. Three oriented strand board plants closed in northern Minnesota, leaving 750 people without jobs. The total employment impact across the supply chain was approximately 1,995 lost jobs.
These events have left more than 1 million green tons of wood off the market, and loggers across the state are still underemployed today. This creates a risk for the supply chain infrastructure to deteriorate over time, precluding growth opportunities over the next decades.
To implement industry recommendations from Destination 2025, a strategic plan for the state to grow life science based industries, The BioBusiness Alliance of Minnesota partnered with organizations across the state to identify issues and opportunities in the growth of biomass-based industries. Special attention was given to forest products, to ensure the economic viability of Minnesota communities. The result of the project is the following four recommendations.
First, Minnesota needs to continue making investments into programs designed to maintain and improve the ecological health of the forest. This is critical to ensure all forest-based industries have room to expand operations while practicing sustainable management techniques. Timber sales create $41.60 of economic activity for every $1 invested, and forest management programs are necessary long-term strategic investment into the economy.
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Second, the state needs to make investments into markets that can utilize wood in the near-term. This is a step toward keeping forests as forests and helps in getting loggers back to work. In the absence of impending short-term expansion of existing industry, creation of an expanded local market for biomass heat and electricity production is an option that should be pursued. Economic development efforts to support opportunities for increased utilization of wood should be a priority, whether this occurs in expansions of existing or emerging industries.
Third, long-term policies and coordinated action that focuses on manufacturing of high-value products should continue to be pursued, since these industries can sustain themselves over the long-term, just as lumber and paper have stood the test of time for the past century.
Lastly, industries across the state of Minnesota, including agriculture and forest products, must come together to explore and foster industrial manufacturing partnerships with biofuels and biochemicals companies. Action now can retain hundreds of jobs in the state through diversification and revenue generation for existing businesses while expanding the opportunity for recruiting additional high-paying jobs to the state.
Through careful analysis conducted by The BioBusiness Alliance of Minnesota and other statewide partner organizations, these recommendations would likely yield between 1,400 jobs and 3,300 jobs, depending the level of investments spurred by these actions in existing and emerging industries. None of this can be achieved without an unprecedented level of cooperation, where communities across greater Minnesota pursue opportunities for biomass processing in an integrated strategy that marries old with new, higher value with lower value. The BioBusiness Alliance of Minnesota is committed to aligning its goals and projects to support this vision to grow a strong bio-based economy across the state of Minnesota. To read the full report, go to www.biobusinessalliance.org .
