CalFibre raising funds to restart rice-straw MDF plant

CalPlant was the manufacturer of Eureka MDF, the world's first no-added-formaldehyde rice straw-based MDF. In 2023, it liquidated its assets. The original inventor of the material has put together a group that is looking to restart the plant.

Photo By CalFibre

WILLOWS, Calif. — CalFibre, a California-based bio-material company, is seeking $75 million in funding to acquire and reopen a factory to produce 300,000 tons per year of tree-free boards.

The factory, strategically located in Willows, at the heart of the Californian rice growing region, spans 276-acre and at one point was the world's first commercial-scale producer of annually renewable, rice straw-base MDF.

Last year, in May, CalPlant I Holdco LLC, the original owner of the facility, focused on creating a no-added-formaldehyde, rice straw-based medium-density fiberboard, Eureka MDF, liquidated its assets. In October 2021, CalPlant entered into a plan support agreement with its senior bondholders, while pursuing a sale of the company. To facilitate the sale process, CalPlant voluntarily filed for Chapter 11 protection in the U.S. Bankruptcy Court for the District of Delaware.

It took California rice farmer Jerry Uhland 20 years, 8 months, and 17 days to raise $325 million to achieve his mission to convert rice straw, a residue of rice farming, historically burned after each harvest, into the MDF product, a common construction material conventionally made of wood, and used for a variety of interior purposes like cabinets, doors, floors, and molding.

It took so long to convince funders to support his first-of-its-kind rice straw board plant because the raw material supply, the manufacturing plan, and the markets all had to be perfect. “I had 20-year contracts with fellow farmers and balers for 400,000 tons of rice straw, a full guarantee from the equipment-maker to make my technology work at scale, and a 20-year purchase contract for 100% of the production from the plant,” said Uhland.

Construction was completed on the plant in 2020, and beginning in early 2021, hundreds of truckloads of formaldehyde-free and tree-free 100% rice straw fiber boards started reaching the marketplace. Uhland said, “the buyers loved getting a product with our substantial green credentials, and at the same quality and price as their everyday wood-based boards.”

Hard luck all around
But, the production and distribution of products were fraught with problems. According to Uhland, first it was about a $100 million “laundry list of bad luck.” 

There were the major construction costs over-runs from an over-promising and under-delivering contractor. The Federal Aviation Administration demanded the company lower the height and move one of its major installations, a dryer tower. Then came Covid shutdowns, and if that wasn’t enough, a dry lightning storm caused a fire and burned 50,000 tons of stored straw. After construction completed, the final financial blow came when a small but critical part of the guaranteed equipment line didn’t work properly, causing the plant to only reach 40% of the designed manufacturing capacity.

“The creditors carried us through the hard times during the challenges of the construction phase with additional investments, but the expense of a long shutdown to solve that one process issue exceeded what they were willing to invest. They were then forced to choose bankruptcy and asset liquidation,” according to Uhland.

CalFibre to the rescue
Uhland joined forces with several industry allies to form CalFibre LLC. CalFibre is currently seeking investors for a capital raise of $75 million to acquire, repair, restart, and operate the distressed asset. There have been numerous bids on the asset, according to Uhland, but none of the potential buyers have committed to restart the plant using local crop residues as the raw material, and the intention of some is to disassemble the mill and ship out the pieces.

“CalFibre has all the elements for success in hand: 150,000 tons of rice straw at the plant site and 400,000 tons per year of ongoing straw contracts; a guaranteed equipment fix; a full turnaround team from line workers to the CEO; unwavering support of the local community, and buyers lined up for our MDF products," he said. "Once CalFibre is up and running, we have a ready-made solution for the rest of the world to save trees, to reduce greenhouse gas, to reduce harmful construction chemicals, and to demonstrate the potential of the bio economy and circular economy.”


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About the author
Larry Adams | Editor

Larry Adams is a Chicago-based writer and editor who writes about how things get done. A former wire service and community newspaper reporter, Larry is an award-winning writer with more than three decades of experience. In addition to writing about woodworking, he has covered science, metrology, metalworking, industrial design, quality control, imaging, Swiss and micromanufacturing . He was previously a Tabbie Award winner for his coverage of nano-based coatings technology for the automotive industry. Larry volunteers for the historic preservation group, the Kalo Foundation/Ianelli Studios, and the science-based group, Chicago Council on Science and Technology (C2ST).