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Timeline for new siding mill continues to lengthen

Potential plant not expected to open before 2022; will likely hinge on strength of housing market

Marshall Helmberger
Posted 8/16/18

COOK— The timeline for a new Louisiana-Pacific siding plant near here continues to lengthen, and the potential plant is now unlikely to be operational before 2022. That’s according to comments …

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Timeline for new siding mill continues to lengthen

Potential plant not expected to open before 2022; will likely hinge on strength of housing market

Posted

COOK— The timeline for a new Louisiana-Pacific siding plant near here continues to lengthen, and the potential plant is now unlikely to be operational before 2022. That’s according to comments from L-P CEO Brad Southern during a conference call with investors late last week.

The company acquired the former Ainsworth oriented strandboard plant in late 2016 with the intent of eventually converting it to manufacture its popular Smartside siding product.

But the company has been slow to advance development at the Cook site.

The company is currently in the process of converting an existing OSB plant in British Columbia to siding, which is tying up company capital and engineering capacity for the next several months.

According to Southern, he expects to turn to a serious evaluation of the Cook site, as well as a second site in Quebec, in late 2019 or early 2020. Given the condition of the Cook site, Southern said it would require at least two years from a decision to move forward with redevelopment of the site until it would be operational.

He expected it would take about a year to be operational at the alternative site, in Val d’Or, Quebec.

Southern said that the shorter conversion time could provide an advantage to the Val d’Or site, although he noted in a similar call to investors earlier this year that rail capacity in Canada remains a serious concern.

In the end, Southern said the market demand will likely determine which plant is brought on line first. He said the Cook plant would be most favorable if the market is demanding more of its eight-foot panel products, while Val d’Or was better suited to production of 16-foot siding.

“Both mills remain viable options for siding production,” he said.

Yet the prospects for both plants also depend on continued growth in demand for Smartside. While L-P is taking steps to increase the product’s market penetration in commercial and multi-family construction, the vast majority of current demand for the product is in the single-family housing sector, which has shown weakness in 2018 as construction costs have escalated and interest rates have been rising. As a result, new housing starts in the U.S. have been on the decline throughout most of 2018.

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