California biotech investing $30M in Van Buren County
The USDA just awarded a $10 million loan guarantee to Marrone Bio Innovations in Bangor.
Marrone Bio Innovations Inc., a manufacturer of bio-based pest control and crop health treatments, has received a USDA-backed guarantee for $10 million in financing.
The funds will help the Davis, Calif., company increase production and employment at a former bio-diesel plant in Bangor, Mich.
MBI, a publicly-held corporation launched in 2006 by California scientist Pam Marrone, now employs 20 people at the former Michigan BioDiesel LLC in Van Buren County and plans to employ 50 as the facility is expanded over the next two years. MBI makes biologically-based, non-chemical products including Zequanox, which kills the invasive zebra and quagga mussels; an agricultural fungicide called Regalia; and two agricultural insecticides, Grandevo and Venerate.
“This is our first plant and right now it’s what we intend to use and build out for manufacturing products that will be distributed around the world,” MBI vice president Keith Pitts told the Business Journal.
He said MBI plans to invest more than $30 million in Bangor over the next two years. MBI acquired the defunct plant in 2012 and spent 2013 building an addition housing three 20,000-liter microbial fermentators, with production beginning in December 2013. MBI, described by Pitts as “a small company,” first began production at other U.S. locations in 2009, using contracted food processing or pharmaceutical facilities. Bangor is MBI’s first wholly-owned production facility.
Alec Lloyd of the USDA staff in East Lansing said the MBI project “is one of the largest loan guarantees that we have in Michigan. It is a big one.”
Backing by the USDA Rural Development Business and Industry Guaranteed Loan Program makes it easier for a business to get a commercial loan at a better interest rate.
“By guaranteeing a high quality loan, like this one to Marrone Bio Innovations, the economic benefits resulting from the program stretch from the Bangor area in Michigan to MBI’s home in California,” said U.S. Agriculture Secretary Tom Vilsack.
James Turner, USDA Rural Development director for Michigan, called the MBI loan guarantee “one of our most significant investments.”
“MBI has transformed what was once a shuttered biodiesel plant into a thriving manufacturing facility that will contribute well over $1 million a year in wages to the local economy when it is fully staffed,” said Turner.
Pitts said MBI was committed to building a manufacturing facility in the U.S. and was looking at areas “with the historic capability to do (microbial) fermentation work, typically regions of the country with pharmaceutical” and similar types of processing. He said MBI was approached by Sen. Debbie Stabenow, D-Michigan, “who was aware of the shuttered biodiesel plant,” and urged MBI to consider it.
Pitts said the Michigan Economic Development Corp., Southwest Michigan First economic development agent, Van Buren County government and the city of Bangor “all have been really enthusiastic partners” in helping MBI select Bangor for its production site.
“We found we’ve got a workforce that’s in the area that can support our growth plans,” said Pitts.
Stabenow, chair of the Senate committee on Agriculture, Nutrition and Forestry, said she “first met with Marrone Bio Innovations a few years ago and strongly urged them to come to Michigan, because we are leaders in bio-based manufacturing, an area poised for growth.” She said the June 4 USDA announcement about the loan guarantee “is welcome news and will help this innovative company expand its operations and create new, high-tech jobs in Southwestern Michigan.”
In a May 2010 report on the Michigan BioDiesel plant in Bangor, the Business Journal noted that the plant had not produced anything for a year. It had been formed about 2006 by a consortium of farmers and biodiesel distributors and planned to produce biodiesel fuel from soybeans. However, starting in 2008, U.S. soybean oil prices began to rise due to increasing exports, while petroleum prices began to fall. When MBI acquired the plant, the company was in bankruptcy.
Located on M-43 halfway between Kalamazoo and South Haven, Bangor has a population of about 1,600 to 1,700, according to Bangor Economic Development Director Leonard Lux. Two major employers in town are Getman Corporation and InterCare Community Health Network.
Getman manufactures heavy equipment for underground mines around the world. Its main plant is in Bangor, where Lux estimates about 120 are employed. He figures InterCare employs probably 50 to 60 in Bangor.
Getman’s skilled manufacturing workers are “higher on the pay scale” than many other employers in the region, according to Lux, and he added that MBI is “also up on the higher end of the pay scale.”
Lux said MBI first contacted the city of Bangor when studying the community’s industrial infrastructure, including water and sewer utilities.
MBI bought the biodiesel plant and its contents at auction in July 2012, according to Pitts.
Lux said MBI is now entering its Phase 2 of investment and development, building a new addition for storage.
“It is high-tech,” said Lux. “Everything is pure, clean.”
The microbial derivatives generally originate in soil and water and are not genetically engineered, according to Pitts.
“We are just taking what Mother Nature produces and screening it for activity,” he said.
MBI’s first product on the market was Regalia, starting in 2009. Now Regalia is being made at the Bangor plant, according to Pitts. The raw material is imported from Asia; an extract from the giant knotweed plant, which is used in Asia in foods and pharmaceuticals.
“We’re very pleased to already have a product (from the Bangor plant) that we’re selling in the United States, Canada, Mexico and parts of Latin America and Africa, and the Middle East,” he said.
Lux said Bangor city officials are excited about the prospects for Zequanox, in view of the fact that the Great Lakes states are trying to deal with a serious invasion of both zebra and quagga mussels.
“That’s going to be a big one right there,” predicts Lux.
When city officials first learned about MBI’s interest in Bangor, there was hope it would pan out, said Lux.
“The hope part of it was in the beginning,” he said. “Now we know. The amount of money, the way they do things — you know this one’s going to make it.”