Dayton Chronicle - Your Hometown News Source

POMEROY––With the demise of Columbia Pulp, the concept of finding a use for the plentiful wheat straw produced in southeastern Washington may be continued by a local entrepreneur who, if investment capital is raised and plans come to fruition, could bring a new industry and 30 full-time jobs to Garfield County.

If all goes as planned, molded four-cup carriers made from locally produced wheat and barley straw may be manufactured in Pomeroy, says Kyler Lovgren, CEO of Palouse Fiber Holdings, LLC, which will be headquartered here.

The four-cup carriers is a product Lovgren has identified as a strong market and "a strong fit for wheat straw pulp."

The sale of Columbia Pulp I, LLC's Pomeroy assets was approved by order of Judge Douglass A. North of King County Superior Court on July 26, 2023, to Palouse Fiber, LLC, according to King County court records. Palouse Fiber is a subsidiary of Palouse Fiber Holdings, LLC, said Lovgren.

The 18,000-square-foot Pomeroy facility, located on the Port of Garfield campus, was a pilot plant originally intended for training and test production of wheat-straw pulp using Columbia Pulp's proprietary process. "We are not the same type of business that Columbia Pulp was," Lovgren said, "where they were making market pulp, we will be utilizing a different process to produce our molded pulp packaging products."

"Palouse Fiber Holdings, LLC, plans to initially invest around $20 million into the Pomeroy Facility to build their state-of-the-art, 15-ton-per-day molded packaging plant," Lovgren stated.

"We are a grassroots company, started and formed right here in Pomeroy, Washington," he said. "Wheat straw fiber performs well as a competitor to plastic, and as an addition to the recycled fiber stream aiding in a circular economy, we are proud of what we can do to improve the environment, but we also must take a common-sense approach to our business and that requires us to focus on cost and performance."

Palouse Fiber's plans require building a new process, Lovgren said, which requires bringing in a significant amount of capital. "We are still in the process of raising additional capital and hope to be fully funded by Q1 2024," said Lovgren.

"This is not Columbia Pulp 2.0," he said.

With a Q1 2024 full funding, Palouse Fiber Packaging plans to have its first molded packaging line in production by late Q1 of 2025. The Pomeroy Plant will employ approximately 30 full-time employees when operational, he said.

Most of the assets intended to be purchased from Columbia Pulp are utility-type assets that Palouse can incorporate into its facility, such as water, power, gas, etc., Lovgren said.

Wheat production in the Palouse is part of the culture, Lovgren added. "We have communities and farmers that take pride in being the best," he said. "Just because we have a good climate for wheat production, wheat doesn't grow and harvest itself. You have generations of farmers that have become the best at what they do and I want to build from that as we build our molded packaging lines."

It's not good enough to be "environmentally friendly," Lovgren said. "You need to be able to go to your customers and give them a solution that doesn't require them to sacrifice cost or performance and that's what we are doing here."

Much of the process equipment will be liquidated, he said, but in some cases, Palouse Fiber can repurpose equipment such as pumps and conveyors. "Our ultimate mission as an organization is to provide a high-quality, cost-competitive product that is produced right here in the Palouse," Lovgren said.

The whole reason I have personally invested both financially and emotionally into this business is because I truly believe in this," Lovgren said. "That belief has been developed over the years of working in these communities and seeing what we can do."

Still pending is the disposal of Columbia Pulp's pulp mill near Lyons Ferry, 1351 Highway 261, Dayton.

Lovgren acknowledged that one of the currents working against Columbia Pulp was that pulp and paper mills in general are struggling. "Bringing in a new source [of pulp] to an industry that's struggling for survival, it wasn't the right market to go into," he said.

The primary competition for molded pulp is plastic, Lovgren said. "People would much rather buy a biodegradable, recyclable product," he said, "and I believe demand for that could double over the next 10 years."

-Chronicle photo

The defunct Columbia Pulp Facility at 1351 Highway 261, near Lyons Ferry, awaits a judge's order that its assets be sold at auction. The facility was the first new pulp mill built in the United States in over 35 years, and utilized a proprietary process to convert wheat straw to market pulp with bio-polymers as a marketable byproduct. After years of heralded false starts, construction began in September, 2017, operations were underway in March, 2020, when COVID-19 forced a shut down, and the plant restarted in May, 2021, only to be idled in February, 2022. The tarped straw was sited to show potential buyers that the facility was turn-key ready, if purchased.

When Columbia Pulp folded, Lovgren was vice president in charge of operations, having stayed with the company through its ups and downs. "The question became 'Do I move on? or is there something here?" he said. Lovgren studied the industry, investigated other companies and, in the end, found that Columbia Pulp had "too many things stacked against it." He concluded that it isn't feasible to sell market pulp (Columbia Pulp's primary product) into the recycled market.

Lovgren went back to the drawing board and paired up the abundant raw material (wheat straw), defined a market of thick-walled molded pulp, and started putting financials together. "We can produce these products at a competitive price, with superior quality, into a market that's growing in demand," he said.

Columbia Pulp I is a single-purpose limited liability company organized in Washington for the sole purpose of developing, owning and operating an agricultural waste-to-pulp manufacturing plant, where wheat and see alfalfa straw sourced within a 100-mile radius, would be processed into wet-lap pulp sold to tissue, paper, molded fiber and packaging manufacturers in the Pacific Northwest and United States. The company halted operations in February, 2022, foreclosure action was initiated in March, 2022, and Paladin Management Group was appointed as receiver in August, 2022.