Expected Lumber Capacity Continues to Grow with Recent Announcements from Georgia-Pacific, Interfor

Summer continued to bring good news to forest landowners, forest-based businesses and rural communities in Georgia as two major forest product manufacturers, Georgia-Pacific and Interfor, recently announced plans to invest in expanding lumber capacity in the state. These announcements continue the trend of investments in the construction of new mills or expanding existing sawmills in the US South. In the last year, there have been ten announcements of investments in forest product manufacturing facilities in Georgia.

“Ten of the thirty announcements of expansions or new sawmills in the nine southern states have been in Georgia,” Andres Villegas, president and chief executive officer of the Georgia Forestry Association, said. “We are well positioned to continue to be a national leader in our sector and are pleased that the added sawmill capacity will give landowners across Georgia a reason to keep planting and managing working forests.”

Data in map above was provided by Forisk Consulting (Q3 2018 Forisk Research Quarterly)

On August 6, Georgia-Pacific announced that it will invest $150 million to construct a 320,000 sf softwood lumber facility in Albany, GA. When fully operational, the plant will produce approximately 300 million board-feet of lumber a year and have more than 130 full-time employees.

Fritz Mason, general manager and vice president of Georgia-Pacific Building Products, noted several unique attributes that made Georgia a top prospect for investment.

“Our location decisions are driven by several factors, but mainly we must have a plentiful and affordable supply of raw materials (trees) in a good geographical area that makes it affordable to deliver them to the site,” Mason said.  “A pool of talented labor and good highways and rail to get your product to market are also essential, which makes it easy to stay local in Georgia.”

This is the company’s third announcement in the last year. In February GP announced plans to build a $135 million, 340,000-square-foot facility in Warrenton, GA. Prior to that, in September 2017, the company announced the construction of a $100 million, 300,000-square-foot lumber production facility in Talladega, AL. Today, GP employs 7,200 people at 18 locations across the state, including its headquarters in Atlanta.

“We had a very good relationship in Warrenton – and adequate real estate next to our lumber facility – so it made sense to continue our investment there by adding a new, state-of-the-art lumber production facility,” Mason said. “Georgia ranks number one in the nation with more than 22 million acres of commercially available, private timberland; so, when we were looking for our third location in the South, Albany was a great site with good highways and rail.”

Immediately following the announcement from GP, Interfor announced the expansion of its mills in Thomaston and Eatonton, GA, and Georgetown, SC, to Phase II of the company’s Southern Investment Strategy. The three projects combined will increase production capacity by approximately 275 million board feet per year, and enhance the product mix and grade. This is in addition to the two projects announced in Phase I last fall for company’s sawmills in Meldrim, GA, and Monticello, AR.

Duncan Davies, president and chief executive officer at Interfor, noted “an attractive fiber basket, proximity to major end use markets and an unparalleled business environment” as major factors in the company’s decision to invest in existing mills in Georgia.

“Well capitalized and efficient mills are better able to weather changing markets – both domestic and international. This capital investment means we’re also investing in our people through internal training programs to build the skilled workforce we need to run these modern and efficient sawmills,” said Davies.

The total combined cost of Phases I and II is expected to be $305 million and the projects are designed to increase production capacity by approximately 425 million board feet per year.

“We are committed to building value by hiring, partnering and investing in local communities in Georgia to grow our global lumber business. Through this investment our sawmills will consume more timber which is good news for local loggers and timberland owners in the state,” said Bruce Luxmoore, vice president of southern operations at Interfor.

Interfor acquired seven mills in Georgia since 2013, set up its Southern Regional Headquarters in Peachtree City, and has invested nearly $500 million to date in Georgia.

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