Friday, September 16, 2011

Israeli Company Picks Mississippi For Major Investment

An Israeli company that converts biomass to biofuels is establishing its U.S. headquarters in Mississippi, and plans to invest up to $1 billion to establish several operations across the state. On Sept. 2, the Mississippi Legislature met during a special session and passed a $100 million economic development package for the project.

HCL CleanTech, based in Herzliya, anticipates creating 800 jobs in the state, with an average salary of $67,000 plus benefits. “HCL CleanTech shows how Mississippi has become a top site for high-tech, high-skilled manufacturing, with high paying jobs for our citizens,” said Governor Haley Barbour.

The company plans to establish its headquarters in Olive Branch, a small-scale commercial facility and research and development center in Grenada, and three large-scale commercial plants that the company intends to locate in the Booneville, Hattiesburg and Natchez areas. The incentive bill included a $95 million loan and $5 million grant that could be used for training, infrastructure or equipment.

“HCL CleanTech is delighted to receive this incentive package from the State of Mississippi to move our company’s headquarters, R&D and four commercial factories to Mississippi. Just as the Midwest, with its thriving agriculture, created significant economic wealth since the 1970’s, the Southeastern wood basket carries the enormous potential to be the nexus for a new breed of industries, ranging from renewable plastics to drop-in biofuels. We thank Governor Barbour for his vision and business acumen that put Mississippi at the core of this new industrial revolution,” said HCL Cleantech’s CEO Philippe Lavielle.

“We’re excited that the state will be the place where Israeli technologies will join the best of U.S. forestry, engineering and manufacturing to extract great values from wood,” added Eran Baniel, General Manager & VP Business Development of HCL Cleantech Ltd. in Israel. The plants will be located in areas that have plentiful pine tree supplies, with the first plant opening in 2012. The Natchez plant is slated for 2015, with Booneville and Hattiesburg opening in 2017 and 2019.

The American-Israel Chamber of Commerce Southeast has been involved with HCL CleanTech since they first began to look at the U.S. market. “We have supported their successful efforts for BIRD Foundation funding, and are very excited that they have chosen to make this very impressive investment in the Southeast,” added Tom Glaser, AICCSE president.

The company established a pilot facility in Oxford, N.C. last year, and that facility will relocate to Mississippi.

Ironically, the foundations of the Israeli company’s technology comes from German efforts during World War II. Figuring that the Allies would cut off German access to fossil fuels, they adapted a process to use concentrated hydrochloric acid to hydrolize wood chips into sugar, fermenting the sugars into ethanol using yeast. After the war, the U.S., Russian and British armies sent engineers to study the process.

When HCL CleanTech was allowed access to the reports, they found the reason this process never continued on a large scale was the cost of recovering the acid. The HCL CleanTech founders solved that problem and produce sugars at a lower cost than corn mill sugars, in a process that is 80 percent more environmentally friendly and uses virtually no virgin water.

The sugars can be used in pet foods, cosmetics, lubricants and a wide range of other products.

The Natchez Democrat reported that the plant is seen as a huge boost for the timber industry in that part of the state, which has been struggling since the closure of an International Paper plant in 2006. The HCL plant is said to need 1 million tons of wood per year, while the International Paper plant used 1.2 million tons annually at its peak.