Texas-based fiber processor Panda Biotech says it will complete the setup of its factory and begin processing hemp by the end of 2023, after years of delay.
Blake Carter, Panda’s CEO, told HempToday that the company is in the final stages of construction and installation of equipment at its site in Wichita Falls.
“The greatest opportunity has been for Panda to issue large volume contracts to farmers in our region who have been waiting for the opportunity to plant more acreage of industrial hemp,” Carter said. “We are actively looking to source baled hemp fiber now and currently contracting with farmers to grow for Panda.”
Fits and starts
After Panda announced a plan to create the “Largest Industrial Hemp Processing Facility for Fiber and Cellulose in the United States” in 2019, the project has repeatedly gone off schedule.
The company announced a first setback in late 2020 when it said it would not meet its target startup date in January 2021. In August 2022, Panda said it would not meet a subsequent target date of October that year.
In a recent appeal for relief, Panda has petitioned the city of Wichita Falls for an extension on its promise to hire 50 workers under a $2.8-million incentive agreement struck with the city’s Economic Development Corporation (EDC) in 2020.
Panda has been the beneficiary of support from economic development and municipal agencies in the form of loans, bond issues and tax breaks for the factory, which has a price tag of more than $100 million.
How viable?
Through a cold eye, Panda Biotech has always looked like a dubious proposition.
First of all, because the hemp fiber processing startup is based in Texas, where the heat and long days are barriers to growing strong hemp crops. Carter said Panda achieved “its best batch of seed to date in terms of germination and vigor” this year.
Panda has tossed around the superlatives from the get-go – always a red flag. “We have concluded that the processing of hemp stalk for industrial uses will be the next multi-billion-dollar business in the United States,” Scott Evans, executive vice president, enthused in an early press release.
Carter told HempToday that Panda has “custom-configured the flow of the processing and refining equipment” for the production of “traceable, clean, textile-grade hemp fiber.” Processing capacity of the equipment currently being installed is 10 tons of hemp per hour, according to Carter.
Wild ride
Panda Biotech first announced it would build the Panda High Plains Hemp Gin in Shallowater, Texas in 2020, later switching to a site in Wichita Falls, where Panda said it was purchasing a former Delphi automotive factory for $5.8 million, and planned to invest another $100 million.
“Located on a 97-acre campus, the Panda High Plains Hemp Gin is a 500,000 square foot state-of-the-art facility that will be the largest in the world to process U.S.-grown hemp straw into mechanically cottonized fiber and hurd using proven and tested technology,” according to the company’s website.
In 2020, the company received $85 million in tax-exempt bonds from the economic corporation in Mission Texas, a separate municipality 580 miles to south of Wichita Falls, to buy and equip the former Delphi factory. The deal was touted as the largest investment of private capital in Wichita Falls in 40 years. At the time, Panda said the factory would create 100 direct jobs and up to 700 indirect jobs.
Facing a deadline to sell the bonds in June 2021, Panda withdrew its application for the bond issue, planned for purchase and equipping of the Delphi facility, without explanation.
On two occasions Panda got extensions from the city on a $1 million loan that was part of the $2.8-million incentive package. The company is reportedly repaying that loan at a rate of $70,000 per month, with equipment – said to already be in the former Delphi building – serving as collateral.
Panda’s bumpy road
- December 2019 – Panda Biotech announces it will create the “Largest Industrial Hemp Processing Facility for Fiber and Cellulose in the United States” in Texas.
- July 2020 – Plans to set up a factory in Shallowater, Texas are abandoned for a site in Wichita Falls. Panda says the Shallowater building did not pass inspection.
- July 2020 – Wichita Falls City Council approves an agreement with Panda through which the Wichita Falls Economic Development Corporation will put in $2.8 million to develop a hemp processing operation.
- September 2020 – Panda announces it will purchase and equip a former Delphi automotive factory in Wichita Falls for a total investment of $110 million, with plans to go online in early 2021.
- September 2020 – Wichita County Commissioners approve the company for a 70-percent tax abatement.
- December 2020 – Panda announces it is moving equipment into the Wichita Falls facility.
- January 2021 – Delay is announced for the startup of the decortication facility after an original announcement that the factory would go online in the beginning of 2021.
- March 2021 – The company announces finalization of purchase of the former Dephi automotive factory.
- June 2021 – Panda withdraws application for $100 million state bond issue, planned for purchasing and equipping Wichita Falls factory.
- August 2022 – Panda announces that the opening of the company’s factory will be delayed from October 2022, marking the second such setback.
- December 2022 – Wichita Falls’ Economic Development Corporation approves an extension on the $2.8 million incentive package Panda received from the city in July 2020.
- March 2023 – Equity partnership deal with the Southern Ute Indian Tribe Growth Fund is announced.
- August 2023 – Panda applies to the Wichita Falls Economic Development Corporation for a three-year extension on its promise to hire 50 workers.
With reporting from the Wichita Falls Times Record News
