Will the new owners of a mill engineered to turn soy straw into industrial-grade panels for cabinets, door core and other traditional wood-based panel products succeed where others have not?

We’ll soon find out when Agristrand Biocomposites begins production of panels at the Mankato, MN, facility that most recently housed Environ Biocomposites and was originally developed by Phenix Biocomposites in 1998.

Agristrand said it has raised $10.25 million to re-launch the mill, including for covering “considerable upgrades.” It is the fourth owner of a business model that has never lived up to its hype, namely to make money converting a waste product that would normally be burned into no-added formaldehyde panels as a suitable substitute for particleboard.

Original investors of Phenix Biocomposites included local farmers who hoped to reap profits from their wheat harvest waste. That first effort ended in bankruptcy making way for a local investment group to buy the plant and pour millions of dollars into the operation before selling it to a California-based investment group in 2005. That third failed try, operating under the Environ banner, ended in the default of nearly $10 million in bonds and foreclosure of the property.

Now along comes Agristrand hoping to see the Phenix rise from the ashes amid perhaps the most formidably economic challenging times since the Great Depression. No doubt the company is banking on the LEED and anti-formaldehyde movements to help it snare enough customer orders to achieve the plant’s annual 40 million square feet of capacity.

Déjà vu All Over Again
While I wish the new owners well, don’t mind me if I remain a bit cynical as I have been down this path a few of times already. During my long tenure covering the wood products industry, I have listened to the boasts of numerous companies that had developed the next great non-wood composite substrate to rival the market supremacy of particleboard and MDF. In addition to straw, there was rice hulls, sugar cane and even coconut shells. Many of these attempts never made it to production and quietly went away.

The most fabled of all was Isobord in Elie, MB, Canada, a wheat straw substrate that was going to revolutionize our industry. I wrote a feature article for Wood & Wood Products after attending the company’s official grand opening in fall 1999 that was attended by local dignitaries, investors, media and invited guests. I remember driving past miles and miles of wheat fields between Winnipeg and Elie. When I arrived at the plant I was awed to see this massive operation utilizing a continuous particleboard press and row after row of neatly stacked straw bales.

The company’s ambitions were not limited to the one facility. Spokesmen talked about plans to open up to five more facilities within the next decade. The future for strawboard was now.

One of the things that gave Isobord legs was an announcement that the bulk of the first plant’s capacity had already been committed to Sauder Woodworking, the RTA furniture dynamo in Archbald, OH, and VT Industries, a mega countertop manufacturer in Holstein, IA. But those deals fizzled as the desired price-performance requirements did not pan out.

When the Isobord’s sluggish orders proved insufficient to cover its massive overhead, the plant was sold to Dow Chemical, which had supplied the methylene diphenyl diisocyanate (MDI) adhesive used to bind the straw particles. Dow renamed the product WoodStalk but ultimately called it quits in 2005, permanently dismantling the operation.

I trust that the managers of Agristrand Biocomposites have done their homework, have learned from the mistakes of those that fell before them and have some new ideas to be successful.

It also wouldn't be bad for them or any of us for that matter if the economy would cooperate.

Recent blogs by Rich Christianson

PenPly's Wild Ride Ends in Fatal Crash, 1-13-12

Investigators of Hoeganaes' Tragedies Push for ComDust Rule, 1-6-12

Last-Minute Wooden Gift Ideas, 12-16-11

 

Read more of Rich Christianson's blogs.

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