Global demand spurs growth in new forest product sectors

James Chittum sees a tremendous opportunity for Maine companies that make products using renewable biobased resources from forest, farm and sea instead of petroleum-based compounds such as polyethylene or polystyrene.

As director of business development at Grow-Tech LLC, Chittum says the company is capitalizing on strong global for its biobased peat “plugs,” propagation trays and rooting substrate layers used for seed germination, transplanting tree seedlings and growing hydroponic salad greens. Roughly 25% of Grow-Tech's sales are to export markets. The company got its start in the 1980s when Dole Food Co. was looking for ways to boost production in its lettuce fields. Its 30,000-square-foot plant at 165 Pleasant Ave. in South Portland now has 43 employees and runs two to three shifts a day to keep up with demand.

“Consumers want safer, more sustainable products,” says Charlotte Mace, executive director of Biobased Maine, a trade group that works with Grow-Tech and other companies. “Companies, increasingly, are setting stringent sustainability goals. Biobased products are quickly outperforming products made from petrochemicals. Global demand is key to this growth.”

Growing Maine's biobased economy

Along with Grow-Tech, Mace says Maine's biobased manufacturing sector includes companies like Tom's of Maine, Maine Standard Biofuels, Cerealus, True Textiles, the Environmental Health Strategy Center, the University of Maine's Forest Bioproducts Research Institute and Trout Brook Enterprises — all of which are member partners in the nonprofit trade group.

Her organization's mission is to grow the sector.

“There's sharply rising global demand for renewable resources that come from forest, farm and sea,” she says. “This is straight from Bloomberg: Virtually any biobased products you can think of — chemicals, bioplastics, advanced biofuels — they have double-digit annual growth. Biobased food and beverage packaging? Double digits.”

The biobased industry has an estimated value of $369 billion, with four million workers, according to a 2014 study published by the U.S. Department of Agriculture. The market for bioplastics is increasing by 20% to 30% per year, though the USDA report said “there is a potential to produce two-thirds of the total volume of chemicals from biobased materials, representing over 50,000 products, a $1 trillion annual global market.”

A separate study by the Biotechnology Industry Organization estimates that U.S.-based jobs for the renewable chemicals sector will rise from approximately 40,000 jobs in 2011, which represents 3% to 4% of all chemical sales, to more than 237,000 jobs by 2025 and approximately 20% of total chemical sales.

Maine is positioned to capitalize on new and promising technologies that can extract high-value from plants and trees, Mace argues, citing as an example biobased chemicals, fuels and materials made from pulp wood, which can then be used to make a whole host of everyday products.

What's lacking, she says, is a road map to get there.

Road map to a biobased future

Biobased Maine has partnered with the University of Maine in Orono in a grant application to the U.S. Economic Development Administration to create a strategy for expanding Maine's biobased manufacturing sector. She expects to hear from the EDA soon if that application was successful.

“The first piece of our strategy is to draft this road map that includes all the information that investors want to know: What would be the cost curves for all of the different sources of wood fiber?” she says. ”It also would include an inventory of our industrial infrastructure. Often investors don't want to build a new facility. They want to use a facility that's already there and permitted. It's important to note that a lot of the industrial infrastructure used at a pulp and paper mill — such as a digester — is also needed for capturing cellulosic sugars from trees.”

Selling points would include Maine's workforce, its transportation assets (including deep-water ports in Eastport, Searsport and Portland) and the R&D work being done at UMaine's Forest Bioproducts Research Institute.

A second step would be a global marketing effort to highlight Maine's potential as a hub for biobased companies. “If we take these biobased assets that Maine has, along with this growing cluster of companies, we become a state that people hopefully will look twice at when they are considering where to invest in next,” Mace says.

The third piece of the strategy, she says, involves attracting private investment for the manufacture of cellulosic sugars. “This is something we really need to do in this state,” she says. “It's because the sugars are chemical building blocks. You can get the sugars from trees and once you get the sugars you can make anything.”

Combating an 'economic hurricane'

Adding urgency to Biobased Maine's efforts is the closure of five paper mills in the last two years coupled with Covanta Energy's decision this spring to close its biomass power plants in West Enfield and Jonesboro. In a videotaped message to those attending the organization's June 3 “Plants to Products Forum” hosted by Maine Standard Biofuels, U.S. Sen. Angus King likened those closures to an “economic hurricane” devastating the communities of inland Maine. At the same time, he says, Maine's 17.7 million acres of forest represent a huge resource for the emerging biobased industry, since technology already exists to convert wood chips and low-value trees into high-value biobased chemicals, biofuels and bioplastics.

“This is a huge opportunity,” he says. “It has to happen fast. We don't have 20 to 25 years to figure this out. We have to figure out what else we can make besides paper — not to replace pulp and paper, but in addition to paper — in order to safeguard the economies of the rural part of our state.”

A keynote speaker at the June 3 forum gave some credence to King's comments.

“Maine has an exceptional amount of biomass. When I drove up here, I saw lots of fuel,” says Fred Moesler, chief technology officer of King of Prussia, Pa.-based Renmatix, which is developing lower-cost methods for deconstructing many non-food plants into the cellulosic sugars and polymers that are the biobased building blocks that can be substituted for petrochemicals.

Since its founding in 2007, Renmatix has had its share of unexpected pitfalls and pivot moments, Moesler says. But persistence pays off and in Renmatix's case the payoff is the successful development of a low-cost proprietary technology that converts wood pulp and other non-food biomass into cellulosic sugars by blasting them with water under extreme heat and pressure.

The company is now in an expansion phase to commercialize its technology. In addition to its R&D center outside of Philadelphia, the company has a feedstock processing facility in Rome, N.Y., and a facility near Atlanta that demonstrates the proprietary sugar-extraction process. Investors include the world's leading chemical company, BASF, which invested $30 million in the company in 2012; Total New Energies, one of the largest integrated oil and gas companies in the world; Waste Management Inc., a Texas-based provider of waste management services throughout North America; and two venture capital firms, Kleiner Perkins Caufield & Byers and Bright Capital.

“You can become a serious biomass hub,” Moesler says of Maine.

Renmatix Senior Vice President Mark Schweiker, a former governor of Pennsylvania, says state government has an important role to play in highlighting those assets for potential investors. “In plain English, who's got the biggest stake [in tapping Maine's biomass potential] and start there,” he says. “Who's got the big stake in it and the commercial hunger to do it big? You've got what it takes there. That is not an overstatement.”

In a follow-up interview with Mainebiz, Schweiker offered more details.

“The first order of business is to build a consensus on that effort, with stakeholder support,” he says. “In my mind, there's some affinity that most of Maine has with the northern region of Pennsylvania — there's a lot of forested acres. I've seen the shift and downturn in the forest products industry in my own state, and it isn't fun … Put those assets back to work: It represents a magnificent opportunity.”

New ideas, new technologies

At Grow-Tech, Chittum says the company's core technology makes up one of its key products, the Cellular Rooting Sponge, a blend of fine peat combined with a foam binder to create a flexible and stable material for seed germination and healthy plant growth. Large-scale agriculture, flower farms and forestry companies are the primary customers. The foam binder is made from polylactic acid, or PLA, a type of bioplastic derived from corn, switch grass, tapioca and other renewable plant resources.

The PLA-based foam binder is cost competitive, he says. When it's mixed with peat, it becomes a spongy substance that's moldable into plugs of different shapes and sizes that can be inserted into propagation trays. Its higher capacity for retaining water and superior aeration qualities make it an ideal medium for seed germination and faster rooting of the developing plant. It's also biodegradable, which Chittum says is a strong selling point for growers who want to minimize their environmental impact.

He cites users of growing systems like greenhouses, hydroponics and aquaponics as key markets.

“Food-growing applications are the fastest-growing segment of our business,” he says. “The local food movement and controlled environment agriculture are all drivers of growth for us.”

And from Orono ...

Nadir Yildirim, a graduate of University of Maine's Innovation Engineering Program who is slated to receive his doctorate in August, is program leader and president of Revolution Research Inc., an Orono-based startup founded in 2014. The company focuses on the development and commercialization of eco-friendly products for the construction and packaging industries. An early prototype taps the unique qualities of nanocellulose — derived from cellulose, the main component of plant cells — to make a 100% recyclable foam insulation board. The company also is researching bio-based suspended ceiling tiles and thermal insulation foam.

“We are using raw materials from the Maine forest,” says Yildirim.

The beauty of using nanocellulose fiber, he says, is its adaptability: It can be made either flexible or rigid, is both fireproof and waterproof and has excellent thermal insulation properties. It does not contain petrochemicals, making it an eco-friendly product in the thermal insulation market, which is expected to grow to $27 billion globally by 2020, according to a recent Markets & Markets analysis.

“It can be used in any kind of construction,” Yildirim says of the prototype. “We're looking for industrial manufacturing partners to scale up our technology.”

Early funding support from Maine Technology Institute's Kickstarter grant program enabled Revolution Research to land a $225,000 National Science Foundation grant. It won the UMaine Business Challenge in 2015, took first place in a competition in the Maine Top Gun Accelerated program and was a finalist in the Greenlight Maine Challenge competition held this June.

“It's important for us to find the right and correct partner,” he says, noting that he's hopeful Revolution Research will compete successfully for $750,000 in additional NSF funding to scale up and commercialize his product by 2017 to 2020.

“This technology is very compatible with papermaking,” Yildirim says. “Maine is a great location for this purpose. This is a really critical innovation.”

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