COOK— The timing of a new siding plant near Cook is less certain based on comments by Louisiana-Pacific CEO Brad Southern during a presentation to investors earlier this month. Last year, …
COOK— The timing of a new siding plant near Cook is less certain based on comments by Louisiana-Pacific CEO Brad Southern during a presentation to investors earlier this month. Last year, Louisiana-Pacific purchased the former site of the Ainsworth oriented strandboard plant for a planned expansion of the company’s siding production.
The company’s Smartside engineered siding product has proven successful in the marketplace and continues to demonstrate double-digit growth in new sales and revenues despite the fact that new home starts have run somewhat below projections so far in 2017.
Louisiana-Pacific acquired the former Ainsworth facility from Toronto-based Norbord, Inc. in 2016 in a deal that included a second plant in Val d’Or, Quebec, Canada, L-P officials indicated at the time that they plan to eventually redesign both facilities to accommodate new siding production, but the company has offered mixed signals about which facility might be opened first.
During a presentation to investors this past spring, company officials indicated they were putting their emphasis on the plant in Cook. But at their latest investors presentation, held Nov. 6, CEO Southern said the timing will depend on which sub-sector within the siding division shows the most growth over the next few quarters.
Southern noted that the Val d’Or plant already has a 16-foot press in place, which the company sees as ideal for the production of trim and lap components for the Smartside sector. “As we look at the opportunities, if we continue to grow our lap and trim business more aggressively than siding, we would lean toward a Val d’Or conversion first,” said Southern. Currently, he said, L-P is looking at the Cook facility for additional siding production, rather than for lap and trim. “If the growth in demand is more even, that would likely put us back at Cook first. The key decision for us is to continue to watch the relative mix as we have this growth, and that will push us to either a Val d’Or start-up or a Cook startup first.”
In comments earlier this year, Southern had indicated the company was leaning towards a production start-up in Cook first, with the Quebec plant to follow.
The projected start-up for both plants was pushed back by the company’s decision earlier this year to convert its existing OSB plant in Dawson Creek, British Columbia to siding production. The company began that work in the third quarter on that $130 million retooling project and expects to have the plant producing siding in late 2018.
That’s likely to push back a start-up of either the Val d’Or or Cook plant until at least 2020, with the second plant conversion potentially after that.
The prospects of a future expansion in Cook continue to hinge on growth in L-P’s Smartside division, and for now that prospect remains hopeful. In fact, according to Southern, the company’s third-quarter sales and revenue from the sector hit a new record, up 12 percent from a year ago.