In 2007, Chris Forslund and his colleagues at Thesis Chemistry Inc. put the chemical manufacturer on a path toward developing its products using renewable non-food biomass rather than petroleum. That new strategy led the company to Nevada, Iowa, where by this time next year it will begin construction of a multimillion-dollar biorefinery that will begin production of bio-based chemicals in early 2014. The company plans to locate the operation on a 40-acre site in the West Industrial Park.

Founded in 2002 in Ohio, the company specializes in manufacturing complex compounds that are used in the pharmaceutical industry. Currently, 95 percent of all chemicals manufactured are derived from petroleum. With the proprietary biorefining process it has developed, Thesis plans to become the first U.S. chemicals manufacturer to produce a sustainable line of chemicals using lignin, a fibrous material found in plants.

“We’ve got a proven track record of developing the technology and processes and taking it to a successful commercialization,” said Forslund, Thesis Chemistry’s CEO. “With that kind of track record on the pharmaceuticals side, that is giving us the confidence that we can commercialize our green chemical technology ourselves.”

The company’s investment in the biorefinery will be in the $30 million to $35 million range, which will increase to about $65 million as it’s built out to full capacity, he said. Thesis expects to bring a new bio-based chemical product to market every 12 to 24 months.

The initial chemicals that will be made in Iowa, among them vanillin for food flavoring, will be sold to customers in the food, pharmaceutical and fine chemicals markets. “These will be identical to those made from petroleum,” Forslund said. “There are already significant markets for these chemicals; the only difference will be that now we’ll be making them from renewable resources.”

Having Lincolnway Energy LLC’s ethanol plant and eventually the DuPont Danisco Cellulosic Ethanol LLC plant nearby will provide ready sources of feedstock for the biorefinery, which will use both ethanol and lignin, Forslund said. “Lignin is actually a byproduct of cellulosic ethanol production,” he said, “so having the DuPont plant in close proximity is very appealing to us as a supplier for feedstock.”

Thesis is in discussions with the Iowa Energy Center’s Biomass Energy Conversion research facility, also located in the industrial park, to lease space for a pilot biorefining operation that it plans to have running by early 2013. The company evaluated multiple sites in three states before zeroing in on the industrial park, where it will also build a headquarters office building and a research and development laboratory.

“We were very fortunate that both (the city of) Nevada and Iowa were very easy to do business with,” Forslund said. In late November, the Iowa Economic Development Authority approved a $500,000 loan to the company along with an estimated $4.8 million in High Quality Jobs Program tax credits. The city of Nevada is considering $3.1 million in property tax rebates. Thesis expects to hire approximately 130 people, with about half the positions paying more than $21 per hour.

In July, Thesis announced it had partnered with Smet Construction Services, a Wisconsin-based construction firm, to build the biorefinery. Forslund said the project will still provide many opportunities for Iowa-based construction companies to provide subcontracting services.

“We’re in discussions with a number of different firms in Central Iowa that have expressed interest,” he said.