Duluth's paper mill to be sold again with promises of new jobs

DULUTH – Duluth's longtime paper mill is expected to be sold to an Italian paper products company, about a year into operations as ST Paper.

Sofidel, which operates several plants in the United States, expects to not only preserve but add employees, said ST Paper spokesman Bill Broydrick.

"This is good news," he said of expanding operations at the mill, which first opened in 1987 and is a major taxpayer and utility customer, employing about 100.

Both Duluth's City Council and St. Louis County commissioners need to sign off on two aspects of the deal, and that could happen this month. Because ST Paper received $600,000 in tax credits from both the city and the county for things like job creation, with the city also offering a $242,000 forgivable loan, approval is needed to transfer those agreements to Sofidel.

The Minnesota Investment Fund gave ST Paper a $3 million forgivable loan to create 80 jobs, and Broydrick said that was satisfied and those jobs will remain, not putting any public aid in danger.

ST Paper has a signed asset purchase agreement with Sofidel.

With Sofidel's history of expanding plants it has purchased, the city is looking forward to a larger manufacturing footprint and potentially more jobs, said Chad Ronchetti, the city of Duluth's planning and economic development director.

"We're excited about the future with Sofidel," he said. "We hope that they not only meet the retention requirements within the agreements, but that they come to the table and start talking to us more about adding more jobs and investment."

The Wisconsin-based ST Paper bought the plant from Verso in 2021, and invested in converting it from a graphic and packaging paper producer to a tissue paper mill, making bath tissue, napkins and paper towels. Sofidel plans to expand its offerings.

If the mill grows, it potentially means more work for related industries, like logging, said Matt Baumgartner, president of the Duluth Area Chamber of Commerce.

"There's reason for not just optimism, but there's reason for hope that this ends up being a good thing for our local economy, the entire supply chain and all the jobs that supports," he said, noting that isn't always the case when a local company changes hands.

Sofidel was founded in 1966 and is the fifth-largest manufacturer of household paper products in the world, according to Tissue Online, and began operations in the United States in 2012. It now has six locations in the country, including Green Bay and Haines City, Fla.

In the late '80s, Lake Superior Paper Industries was built for nearly $400 million, creating 300 jobs. It was the largest investment in the city since U.S. Steel opened its Duluth plant.