Alabama forest products industry poised for gains after strong year

Alabama forest products industry poised for gains after strong year
Louisiana-Pacific makes its new FlameBlock fire-rated sheathed panels at a plant in Clarke County. (LP)

After a banner year for the forest products industry in Alabama, the sector is primed for even more growth and innovation.

Last year, Alabama recorded forest products industry projects involving $1.2 billion in new investment and more than 1,000 anticipated jobs, according to the Alabama Forestry Association and the 2016 New and Expanding Industry Report issued by the Alabama Department of Commerce.

The investment total made forest products the state’s top Accelerate Alabama target industry for 2016, surpassing the juggernaut automotive and aerospace industries, which recorded impressive totals of their own. Accelerate is the state’s strategic economic development growth plan.

Forest products is a cyclical industry and is on a prolonged upswing after a severe industry recession, said Ken Muehlenfeld, director of the Forest Products Development Center at AIDT, the state’s top workforce training agency.

“Demand is expanding across many industry segments,” he said. “Alabama is benefiting by virtue of its strong timber resource base, competitive cost structure, pro-business environment and targeted economic development strategy.”

Austria-based Kronospan is investing $362 million to expand its Alabama plant, where it produces laminate flooring. (Contributed)

Industry innovation

Meanwhile, innovation is being seen across the industry, in both products and processes, Muehlenfeld said.

“A good example of product innovation would be the announcement in June by International Beams, which is building the first plant of its kind in the eastern U.S. to produce a new engineered wood product, cross-laminated timber, in Dothan,” he said.

“Another would be Kronospan, which is making huge investments at its existing facility in Calhoun County to add a variety of value-added downstream products.”

As for process innovation, Two Rivers Lumber Co. and Weyerhaeuser Co. are building state-of-the-art sawmills in West Alabama.

“A number of existing sawmill operations are upgrading their process technology to improve product recovery, production capacity and cost efficiency,” Muehlenfeld said.

International Beams CEO Bruno Lebel discusses the innovative timber panels and beams his company will produce for its IB X-LAM USA label in Dothan. (Jamie Martin/Governor’s Office)

New product

Another example of innovation in Alabama’s forest products industry can be found in Clarke County, at Louisiana-Pacific Corp.’s $265 million operation near Thomasville, which employs nearly 200 people.

The company, a leading manufacturer of engineered wood building products, last year spent $15 million to install a new LP FlameBlock production line at the Clarke County facility, and it is now the sole LP production source for this innovative product.

FlameBlock, which has a fire-rated sheathing that slows the spread of a fire, is used on interior and exterior wall assemblies and roof deck applications of single-family or multi-family homes and businesses.

In Clarke County, Alabama workers manufacture the panel itself and, in a separate process, apply the coating that makes it fire-rated.

“This is the first coating line we have at LP,” said Lorraine Russ, business product manager for the company.

Changes in U.S. building codes have driven the need for the product, she said.

“As we all become more aware of how we can build better buildings, so fire is less of a risk, codes have been put in place to combat the risk,” she said. “This product is a great example of how we can support those code changes.”

Current trends in the building industry include more wood frame construction in multifamily dwellings, along with single-family homes being built closer together on zero lot lines.

FlameBlock also helps improve efficiency and reduce labor costs and construction time on job sites. Builders don’t have to install a separate fire-rated panel in addition to a structural one; FlameBlock serves as both.

Russ said the company is anticipating 15 percent year-over-year growth in FlameBlock sales.

The new LP FlameBlock production line puts the spotlight on the Clarke County operation, which has been recognized by the company for its 2016 safety record and with environmental awards for a successful reuse program for wood ash.

“LP Clarke County plays an important role in our company’s largest business segment – oriented strand board,” LP Clarke County Plant Manager Wayne Young said.

He added, “One reason LP leadership selected Clarke County for the LP FlameBlock production line is because of our strong workforce. Our team of employees has a winning spirit and the quest to make a quality product that represents Clarke County and Alabama very well.”

Austria’s Lenzing is investing $293 million to expand its Alabama fibers plant. (Lenzing)

Forestry resources

Alabama has the second-largest commercial timberland base in the U.S., with 23 million acres.

Forestry is the state’s second-largest manufacturing industry, producing an estimated $14.8 billion worth of products in 2013, the latest data available. The industry directly employs 42,500 Alabamians with an annual payroll estimated at $2.1 billion.

Key projects in 2016 included Kronospan, an Austrian maker of laminate flooring, which announced a $362 million expansion of its Calhoun County facility, and Lenzing, also based in Austria, which is investing $293 million to expand production of eco-fibers at its plant in Mobile.

Muehlenfeld said he is optimistic about the current industry cycle.

“I think we have a good bit further to run with regard to this industry expansionary cycle. Housing starts are still well below their equilibrium level, and only at about 60 percent of the pre-recession peaks. The demographics indicate strong demand for wood products is likely.”

Alabama is well-situated to capitalize, Muehlenfeld said.

“We have an abundance of high-quality timber that’s being grown much faster than we’re using it. This suggests that we can sustainably support significantly more manufacturing capacity, with a very favorable outlook for wood costs,” he said.

This story originally appeared on the Alabama Department of Commerce’s Made in Alabama website.

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