Could Alabama become home to a major new industry centered on bamboo farming and product manufacturing?

Southern Research and its Prosperity Fund initiative are teaming up with Resource Fiber, a bamboo fiber products company, to help realize the commercial potential of bamboo in a state known for thick pine forests.

Marsha Folsom, Resource Fiber’s Chief Development Officer/Governmental Affairs/Economic Development, said The Prosperity Fund has connected the firm with Alabama businesses interested in exploring industrial applications of bamboo and university professors who want to do bamboo research.

Meanwhile, Southern Research’s testing facilities are evaluating company bamboo products to determine strength and other important characteristics to advance their product development efforts.

“We are very excited about the prospects for the future with Southern Research and its Prosperity Fund and what this collaboration will do for the expansion of economic development around the mass cultivation of bamboo and manufacturing of bamboo industrial products in Alabama, a first for the U.S.,” Folsom said.

She added that one of Resource Fiber’s goals is to act as a magnet to attract other industries interested in utilizing bamboo fiber to Alabama and the region.

“Collaboration with Southern Research serves as a key component to making that happen,” Folsom said.

EXPANDING RELATIONSHIP

Steven Puckett, managing director of The Prosperity Fund, said the economics of bamboo are compelling. Bamboo grows rapidly, up to two feet per day, and it yields 20 times more fiber than trees, with no replanting necessary. Plus, it requires little water and no pesticides.

Estimates show that bamboo could yield considerably more revenue per acre annually than pine, Puckett said.

“Bamboo cultivation and product manufacturing could one day become a significant new industry in Alabama, and that’s why The Prosperity Fund is keenly interested in its future possibilities,” Puckett said. “We are committed to investigating innovative solutions that spark job creation and foster sustainable growth through a new brand of economic development.”

The testing of bamboo samples is now underway at Southern Research’s Birmingham engineering facilities, focusing on factors such as strength and flammability that are integral to product development.

“Southern Research is performing testing on the bamboo product as the company moves forward to achieve the certification needed for commercial use,” Puckett said. “Certification is an expensive process, and we are helping work out all the kinks as they prepare for the certification process.”

Folsom said the testing at Southern Research will provide Resource Fiber with performance information before it sends product samples to third-party laboratories for industry certification. Securing that certification is key to market acceptance for the company’s products, which include bamboo rail ties and bamboo nail laminated timbers for the construction industry.

She expects Resource Fiber to work with the Prosperity Fund to expand the testing to other products in the future.

“We see this collaboration continuing and hopefully expanding into the future. A myriad of products can be made from bamboo,” Folsom said. “Through collaboration and drawing on the respective expertise from both Resource Fiber and Southern Research, we can establish Alabama as the epicenter of bamboo research, bamboo farming at scale, and bamboo manufacturing expertise in the U.S.”

GROWTH POTENTIAL

While bamboo represents a $60 billion industry worldwide, there hasn’t been much of an attempt to capitalize on it in the United States, according to Resource Fiber, which calls itself the nation’s only vertically integrated bamboo fiber products company.

Resource Fiber now operates a 100-acre in-field bamboo nursery in Greene County, located in Alabama’s “Black Belt,” named for the rich, fertile soil that made it a key cotton-producing region. With the doubling of the size of its nursery, the company expects to provide enough plants to populate 100,000 to 150,000 acres of bamboo over the next decade.

While much of Resource Fiber’s focus is on the Black Belt, its growth potential has implications for the Alabama coal counties targeted by The Prosperity Fund. The company intends to move its production facility to Tuscaloosa County, and Puckett has connected it to support businesses in Walker and Jefferson counties already.

“As the bamboo economy grows in Alabama, we fully expect many more counties other than those in the Black Belt to benefit through expanded manufacturing of bamboo products utilizing bamboo fiber grown in Alabama,” Folsom said.

With financial backing from the Appalachian Regional Commission, Southern Research formed The Prosperity Fund in 2017 to accelerate small business growth and job creation in four Alabama counties hurt by the coal industry’s downward spiral.

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Southern Research’s Prosperity Fund is collaborating with students from the University of Alabama’s STEM Path to the MBA program to explore strategies to improve the fortunes of Walker County’s forest products industry.

The UA students, working with Prosperity Fund Managing Director Steven Puckett on a yearlong research project, are investigating a wide range of ways to spur a comeback for the industry in a county already battered by the coal downturn.

The students are evaluating possible new uses for Walker County’s vast timber resources, including engineered wood panel systems used in construction projects. They’re also studying unconventional solutions such as the viability of bamboo farms to augment the county’s sprawling pine tracts.

“We’re working as a team to develop concrete recommendations that will help this important industry in Walker County move toward more fully reaching its potential,” Puckett said. “We’re searching for ideas that could lead to job creation and provide a boost to small businesses in the county.”

With financial backing from the Appalachian Regional Commission, Southern Research formed The Prosperity Fund in 2017 to accelerate small business growth and job creation in four Alabama counties hurt by the coal industry’s downward spiral. Besides Walker, the counties are Fayette, Tuscaloosa and Jefferson.

‘ECONOMIC ROLLER-COASTER’

Troubles for Walker County’s forest products industry began shortly after the loss of 500 coal jobs. In 2014, a paper mill in Courtland – about 70 miles from Jasper and the chief consumer for Walker County wood fiber – shut down after 40 years of operation.

The mill’s loss has dealt a heavy blow to the industry across the region, said Paul Kennedy, president of the Walker Area Community Foundation, a partner in The Prosperity Fund.

“The forest products industry is a traditional economic roller-coaster,” Kennedy said. “This time, the roller coaster got to the bottom of the hill, and there was nothing to pull it back up.”

Today, Puckett said harvesters in Walker County must transport their product – essentially a bulk commodity with a low per-unit value — great distances under extremely uneconomical conditions.

“In Walker County, the producers have all this land and all these trees, but nowhere nearby to take it,” he said. “They have to take their loads about 150 miles one way, which means they travel all that way to make a delivery, then deadhead it back with nothing.”

REAL-LIFE LEARNING

The UA students got involved when Puckett approached Pamela Hill, a clinical instructor in the STEM Path to the MBA program, which allows high-achieving undergraduate students majoring in STEM disciplines to earn an MBA in an additional year.

Student Alex Jaffery said the UA team has been engaged in finding new solutions to improve the use of Walker County’s natural resources. His role has been to research alternative products, specifically bamboo. He served as a liaison with a company called Resource Fiber that’s seeking to commercialize bamboo.

“I learned a lot about business optimization in the project. In the program we also learned about formulating business models,” Jaffery said. “With the project I was able to formulate and apply a business model to a real-life situation.”

Other UA students working with the Prosperity Fund are Tyler Matthews, Tom Kobitter and Nichole Cheatum.

EXPLORING NEW OPTIONS

Puckett said the UA students have focused on identifying catalysts that could spark growth in Walker County. One idea centers on cross-laminated timber, or CLT, an engineered wood panel system that is increasingly used in construction projects, particularly in Europe.

The students have been willing to think outside the box. Their research determined that pine trees yield about $54 an acre over 20 years. Bamboo, on the other hand, can yield between $700 and $1,500 per acre. And once it’s established after seven years, bamboo can be harvested every year.

“There’s a huge difference in value,” Puckett said. “If bamboo could be introduced on a meaningful scale and markets found for it, that could produce a substantial potential economic impact on the county.”

The student group has also met with several large companies involved in land management in Walker County. One company is intrigued by their bamboo idea; this spring, a test plot will be planted on reclaimed mine land as an experiment, Puckett said.

In addition, a lumber company in Jasper is evaluating a cost-saving suggestion advanced by the students. The company currently imports expensive exotic wood from South America to use as spacers in its wood kilns. Tests will show whether bamboo grown and processed in Walker County serve the same purpose more cheaply.

One unconventional idea being explored involves planting lavender on a commercial scale on reclaimed mine lands for sale to industrial producers of essential oils.

Kennedy at the Walker Area Community Foundation is grateful for the students’ involvement and isn’t concerned that some ideas likely won’t fly. He recalled an anecdote about inventor Thomas Edison saying 300 failures taught him valuable lessons.

“If the students can take us through the 300 ways that won’t work for our forest products industry and get us to the one way that actually lights up and changes the world, that’s what I’m after,” Kennedy said.

Corey Tyree, director of strategic growth initiatives at Southern Research and a co-founder of the Prosperity Fund, said he is confident the students will develop actionable recommendations that could benefit the forest products industry in Walker County.

“The Prosperity Fund operates by harnessing available resources and identifying innovative solutions to difficult problems holding back industries and communities,” Tyree said. “Our work with these talented University of Alabama students to assist Walker County’s timber industry aligns perfectly with that strategy.”

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Southern Research’s Prosperity Fund is working to create jobs and boost economic activity in Alabama’s coal region by developing big ideas while always thinking small — small business, that is.

The Prosperity Fund’s efforts in Walker, Fayette, Tuscaloosa and Jefferson Counties concentrates on providing support to bedrock small enterprises and aspiring business owners in communities whose fortunes have long been tied to the coalfields.

As the recognized heart of the nation’s jobs engine, small business should play a larger role in economic development efforts today, according to Corey Tyree, Ph.D., a co-founder of The Prosperity Fund and a director in Southern Research’s Energy & Environment division.

“For a long time, economic development has been about attracting large businesses to your region, and there was a good reason for that,” Tyree said. “But small businesses create two-thirds of U.S. jobs, and there are more things we can do to help them.

“We want to help retain and grow existing small business and help create new ones,” he added.

The Prosperity Fund, created with significant backing from the Appalachian Regional Commission (ARC), begins its work at a time when many Alabama coal-mining communities are showing signs of prolonged distress.

Jobs lost in the coalfields aren’t being replaced quickly enough, and new businesses aren’t springing up to fully replenish the economic activity that’s slipped away. The fact that the coal slump followed on the heels of “The Great Recession” just made matters worse.

Alabama’s coal job losses have been heaviest in the four-county area, where some families have worked in mining for generations. The 2,505 coal jobs lost there between 2011 and 2016 represent 10 percent of all U.S. job losses in the sector.

CHALLENGING CONDITIONS

Despite some stabilization this year, many in Alabama’s coal communities doubt the industry will ever regain its traditional role as an economic pillar and job creator in the area.

“I don’t see the industry coming back to its heyday for two reasons – one is mechanization, which has reduced the need for the headcount that mines used to have, and the second is that natural gas prices are just overly competitive compared to coal,” said Paul Kennedy, president of the Walker Area Community Foundation in Jasper.

Fayette County Probate Judge William Oswalt said economics are working against a comeback for coal mining.

“It’s going to be hard to convince a group of investors to come in and spend $700 million or $800 million to develop a coal mine,” Oswalt said. “I’m not hopeful.”

Coal mining has long played an important role in the region served by the Prosperity Fund. In 1997, Jefferson County alone produced 10.4 million tons of coal, making it one of the Top 15 coal-producing counties in the U.S., according to ARC data.

Coal jobs were plentiful that year. Jefferson County had 2,052 coal miners, while Tuscaloosa County had 1,750, the ARC data says. Coal mining jobs numbered 750 in Walker County, and 375 in Fayette County.

The region looks a lot different today.

As this year began, Jefferson County had 1,198 coal miners, a 42 percent decrease in one generation. Tuscaloosa County’s coal miners totaled 397, a decrease of 77 percent. Walker County’s total dropped slightly to 644, according to ARC data.

Fayette County, meanwhile, has lost all its coal mining jobs.

A MINE CLOSES

The harsh blow fell on Fayette County in 2013, when Walter Energy shut down its North River Mine near Berry, saying its coal reserves were running low after 40 years of operation. Some of the 320 or so miners were able to transfer to other Walter mines in Tuscaloosa, but many of them simply saw their paychecks come to an end.

“We had people who were making $60,000 or $70,000 a year digging coal, with benefits, with retirement, lose their jobs,” Oswalt said.

The pain is still being felt. Today, some of these miners remain out of work after decades in the mines because employers see them as too old to start a new career and unwilling to accept wages that fall short of the pay of the lost mining jobs, he added.

The closing of North River Mine also delivered a devastating blow to the finances of Fayette County, wiping out coal severance tax revenue that brought in $500,000 for the county’s general fund annually, Oswalt said.

“It’s been brutal. We have absolutely no means of replacing that. Zero. We had been drawing that revenue for the last 30 years,” he said. “You wake up one morning, and it goes to nothing.”

When Walter closed the North River Mine, the company planned to invest $1.2 billion in a massive new mining operation that would open by 2019 with 450 jobs in northeast Tuscaloosa County.

That project died, and Walter slid into bankruptcy.

BLUEPRINT FOR RECOVERY

The kind of concentrated job losses affecting Fayette County have magnified the coal downturn’s negative effects in many Alabama communities, adding to challenges that were already present.

For one thing, wages have been lagging in much of the four-county area. Fayette County’s per capita income in 2014 was $19,356, only slightly more than half of the U.S. average. Walker County’s figure of $25,993 was 78 percent of the national average, according to data from the Economic Innovation Group, a bipartisan public policy organization.

Another challenge is that entrepreneurial activity is low through much of Alabama’s coal region, which creates a negative cycle in a struggling community. With few new businesses being formed in these communities, economic fragility increases and some residents depart for areas offering more opportunity.

So the big question is: How can Alabama’s coal country bounce back from a devastating downturn that appears lasting?

Tyree believe the answer lies with new approaches to help small businesses in the region become healthier.

The Prosperity Fund’s focus in on helping nurture small businesses so they can grow and hire new workers, as well as lending support to get promising new ventures off the ground. It has hired a veteran entrepreneur, Steven Puckett, to work with businesses in the region.

The initiative will collaborate with existing businesses, colleges and universities, economic development groups, potential investors, and community leaders throughout the region. It’s working with businesses to find new customers, improve efficiency and update their technology and processes.

The Prosperity Fund is also developing broader small business programs such as workshops focused on small business procurement, lending, human resources, and more.

FINDING RESILIENCE

Leslie C. Hartley, Ph.D., dean of instruction and interim executive vice president at Bevill State Community College, agrees that a new way of looking at economic development is needed in the area.

“The economic development of today is focused on human capital building. That’s where we’re going today – building the human capital we already have in our area,” she said. “There are so many niches of talents and ideas, and there are lots of opportunities for individuals in our community to be more prosperous.”

Tyree believes that Southern Research, which was founded in 1941 to drive economic development in Alabama, is the right organization to help small enterprises and struggling communities in Alabama’s coal belt.

“Regions with strong entrepreneurial cultures bounce back faster from economic downturns. Unfortunately, that sort of economic resiliency is increasingly something seen only in a few urban areas. We’ve got to work to change that,” Tyree said. “We want to work with community leaders who can introduce us to the folks who need our help.”

Oswalt said he believes small business growth and increased entrepreneurial activity would provide a boost for Fayette County.

“If I could get a new company that employs 10 people, I’d shout,” he said. “That would be a huge victory.”