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January 1994

State Roundups
Minnesota

Duluth paper recycling plant opens

A state-of-the-art $76 million paper recycling plant that may be the answer to shrinking timber stock and landfill space opened Oct. 1 in Duluth.

Superior Recycled Fiber Industries (SRFI) produces de-inked pulp from office waste paper in its prototype plant. The pulp is used to make high-quality printing and writing paper. In addition to meeting the paper industry's increasing demand for high-quality pulp, the plant has generated 30 in-house and nearly 100 spin-off jobs in transportation and support services.

SRFI is the product of a unique partnership between Minnesota Power and five competing paper mills—Lake Superior Paper Industries, Duluth; Blandin Paper Co. of Grand Rapids, Minn.; Potlach Corp., Cloquet, Minn.; Canadian Pacific Forest Products Ltd., Thunder Bay, Ontario; and Consolidated Papers Inc., Wisconsin Rapids, Wis. These mills not only helped design the operation and choose the machinery, but they committed to collectively purchase 70 percent of the pulp output over the next five years. "Now we're working with our customers to develop new products and can position the company to meet future demand for these high-grade recycled paper products," says Anne Lewis, Blandin spokesperson.

Using the most technologically advanced recycling equipment and design available in the world, SRFI processes 300 tons of office waste paper daily that might otherwise end up in landfills. Operating around the clock, yearly output is expected to amount to 90,000 tons of pulp. "It's really not a 'save a tree' issue as much as it is reducing the amount of waste paper that's filling up the nation's landfills," says Gerald Ostroski, president of Synertec, the Minnesota Power subsidiary responsible for building the plant. The plant is designed to handle 6 percent of U.S. office-collected waste paper.

"The goal in designing this plant was to create a process that not only makes de-inked pulp but also provides solutions for common environmental issues," Ostroski says. The plant uses millions of gallons of recycled water each day and hydrogen peroxide to whiten the pulp instead of chlorine bleach, which could produce harmful dioxins.

Plant officials are currently studying plans to recycle the waste residue as well. "Our vision is to completely close the loop on this plant from a residue standpoint and we think we'll accomplish that within the next two years," Ostroski says.

According to Lewis, "The demand for the high grade recycled products isn't where we want it yet, but we're seeing a growing interest and have had a lot of customer inquiries." And she says the production people at Blandin, which produces light-weight coated paper for magazines and catalogs, are very pleased with the quality of the pulp product they now receive from SRFI.

—Christine Power

Minority-owned businesses grow in Minnesota

Ethnic minority-owned businesses are finding more room and resources in Minnesota's marketplace, in part due to the Metropolitan Economic Development Association (MEDA).

When MEDA was formed in 1971, "conditions were not ripe for minority businesses and capital was sparse," says Warren McLean, MEDA president. Most businesses were single-family operations without resources for expansion. By 1992, in just one year MEDA-assisted businesses created 224 new jobs and paid over $1.5 million in taxes.

Area business leaders created MEDA in response to a series of riots in North Minneapolis to bring minorities into mainstream business by providing technical and management assistance. Consultants at MEDA design a variety of training programs for clients, including administration, marketing, finance and accounting.

MEDA and its related programs receive strong support from the business community, a central reason for the organization's success, McLean says. Volunteers contributed 2,167 hours in 1992, equivalent to two full-time staff positions.

About 100 CEOs and other corporate officers participate in MEDA's mentor program that matches clients with area executives. Joe Kingman, former president of American National Bank in St. Paul, volunteers as a mentor for Dick Martin of Martin Communications in Roseville. They have met every six weeks for the past 10 years to discuss business in the Twin Cities. "He provides insight into how business works," says Martin, while maintaining "a hands-off approach."

While MEDA provides training, the Milestone Growth Fund offers venture capital for ethnic minority business owners. Milestone began in 1990 with $2.1 million in private sector donations. Milestone president Esperanza Guerrero-Anderson says this could eventually translate into a $10 million fund since the US Small Business Administration matches $4 in loans and investments for every $1 of private funds invested by a licensed venture capital firm.

Milestone has investments with 13 minority-owned companies in various industries, including the food, construction, hotel and medical fields. All investments are made with flexible terms and a commitment to help during slow business cycles. "As a long-term partner, we expect rocky times," Guerrero-Anderson says.

MEDA and Milestone help minority businesses create wealth, a key to solving problems in minority neighborhoods. "When we have the money, we can decide the social agenda," Guerrero-Anderson says.

—Rob Grunewald