CalAg Rice MDF Plant Is A Go

The CalAg rice straw-based medium density fiberboard plant is becoming a reality. CalPlant I, as it is called, has completed and closed financing for a $315 million plant to be built in Willows, Calif. with a production capacity of 140MMSF (3/4 in. basis) and a startup goal of late 2018.

The project has been in the works for more than 20 years, since the principals first shipped California grown rice straw to England for testing. Since then, the endeavor experienced a series of “almosts,” until the recent successful financing, which includes $228 million of tax-exempt private activity revenue bonds priced through the California Pollution Control Financing Authority, and $87 million cash equity.

A group of minority investors includes a subsidiary of Teachers Insurance and Annuity Association of America, Columbia Forest Products, the German-based machinery manufacturer Siempelkamp, CalAg LLC and a range of other investors.

The project stems from state legislation in 1991 that prohibited farmers from burning rice straw, the waste product of rice harvesting. Smoky haze had become an issue in the region.

CalAg President Jerry Uhland, a rice farmer, joined a small venture formed by another agriculture man, Jim Boyd, in 1996 that began researching rice straw-based MDF. They were soon joined by Les Younie, who had worked in wood products operations, and who today remains Vice President of Manufacturing.

The project is expected to bring several environmental advantages including water use reduction, methane emissions reduction, fungicide and chemicals reduction. And obviously it provides a new recycling market for roughly 275,000 tons of rice straw annually.