MADISON — A company planning to produce wood fiber insulation out of the former Madison Paper Industries mill has received a $250,000 grant for product testing and marketing.

GO Lab Inc., a Belfast-based building products manufacturer, received the grant from the U.S. Forest Service’s Wood Innovations Grant program, according to a news release from the company Monday.

Although the sale of the former mill is not yet final, GO Lab is planning to take over ownership by the end of the year and start renovations in 2020 to outfit the site for wood fiber insulation manufacturing.

The wood fiber insulation, to be made from softwood chips, would be renewable, recyclable and non-toxic, according to the company.

They estimate using about 180,000 tons of softwood chips annually and say the plant will create about 100 new jobs and generate about $70 million in annual revenue.

“It’s a tremendous acknowledgement of all the work we’ve done as a company to research the products we’re bringing to market,” said GO Lab President Joshua Henry in the release. “It will give confidence to our customers and to the lumber yards and insulation distributors carrying our products.”

The grant will allow GO Lab to do critical testing on its wood fiber boards, batts and blown-in insulation products, according to the release, and will also support marketing and education efforts aimed at helping customers understand how the product fits with U.S. building codes.

GO Lab is also a finalist for a $50,000 award in the Gorham Launchpad small business competition and will give their business pitch to a panel of judges June 4.

U.S. Senators Susan Collins, R-Maine, and Angus King, I-Maine, praised the funding opportunity from the forest service in a separate release Monday.

Along with the $250,000 for Go Lab, the federal agency is also awarding $250,000 to the University of Maine in Orono for modeling, siting and engineering a biomass power system to supply the energy needs of its Orono campus.

“Maine’s forest economy plays a vital role in the state’s economy and it is critical that this industry has the tools it needs to adapt to changing markets,” the senators said in a joint statement. “The funding will help the GO Lab Inc. and the UMaine teams develop new products and opportunities for the forest industry and support rural communities that rely on it. We look forward to supporting these efforts to help Maine’s forest economy continue to grow and thrive.”