A $2 million loan that will provide Northern Minnesota's forest products industry with a much-needed boost was approved Thursday by the Iron Range Resources and Rehabilitation Board.

Louisiana-Pacific (LP) sought the $2 million loan from the Douglas J. Johnson Economic Trust Fund to assist in a $7 million expansion of its Two Harbors facility, which produces siding used in new construction and remodeling.

The project will rebuild the existing press at the plant and increase capacity while also reducing costs, according to L-P executives. The higher capacity will increase wood consumption from 80,000 cords annually to 100,000 cords, providing a new source of demand for local loggers, who have been hit hard by numerous shuttered forest products facilities in recent years.

IRRR Commissioner Tony Sertich voiced high praise for this and other expansions under funding consideration Thursday.

“They’re existing businesses in our area that are growing,” he said.

Steve Twining, Two Harbors plant manager, noted L-P is the world’s largest manufacturer of oriented strand board with 24 facilities in North and South America.

The IRRRB loan has an interest rate of 1 percent, amortized during a 10-year period. IRRRB will retain a first lien position on the refurbished press.

Other project funding includes $4.3 million in equity, a $350,000 IRRRB infrastructure grant to Lake County, a $350,000 infrastructure grant to Lake County from the Minnesota Department of Employment and Economic Development and $60,000 from Lake County.

Once completed, the project is projected to create 17 new positions with annual wages between $32,000 and $58,000. Approximately 112 persons are currently employed at L-P’s Two Harbors plant.

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