North America s New Largest Particle Board Mill Promises to Grow Michigan s Residuals Market BY EMILY TOWNSEND

Transcription

1 North America s New Largest Particle Board Mill Promises to Grow Michigan s Residuals Market BY EMILY TOWNSEND

2 Arauco, a Chilean-owned lumber company, will soon start producing particle board in North America s largest single-line press. The $400 million mill, located in Grayling, Michigan, has hired 250 employees and is already making contracts throughout lower northern Michigan with foresters and sawmills to buy up chips, roundwood, sawdust and pulp. Over the past four years, the lumber market in Michigan has grown, according to Michigan Department of Natural Resource s biannual report. However, sawmills have struggled to sell residual parts of the tree like sawdust, 100 inch pulp and other roundwood, since before the 2008 recession. Between 2006 and 2011, the four largest buyers of low-value wood in the region went out of business Menasha Paper in Otsego, Georgia Pacific in Gaylord, Sappi Paper Mill in Muskegon and the century old St. Mary s Paper, in Sault Ste. Marie, Canada. In the case of the closure at Georgia Pacific, more than 200 employees were laid off from the particle board factory, according to UpNorthLive.com.

3 With all those jobs lost, it turned into years of hurting for the Gaylord economy that trickled into suppliers and some of northern Michigan s logging industry who were also suppliers to the plant, said Lisa McComb, Otsego County Economic Alliance Executive Director. When all of the plants closed, it left a big hole in Michigan s wood basket. The pulpwood markets were just lost, said Randy Keen, the Wood Procurement Manager at Arauco. The biggest problem we ve had in this state since 06 has been getting rid of certain materials. And there are certain points in the season that softwood pulp and dense hardwood pulp are just so hard to move here, that it makes it difficult (for the logger) to cut jobs or buy certain kinds of jobs, said Keen, adding I think the addition of Arauco will compliment the other mills that are here. That s going to allow the loggers and the sawmills to work at their maximum potential and fully realize the forest resource we have in Michigan and they won t have to be so picky about jobs. On the mill side of things, Arauco is actually going to help us tremendously, said Shawn Johnston, the General Manager at Biewer Lumber, located in both Lake City and McBain, Michigan. Biewer Lumber will provide Arauco with a substantial amount of materials this upcoming year. Collectively the two mills put out about 140 million board feet of lumber annually and employ 173 workers. It gives us another market to sell residuals like chips and dust. It will definitely increase production. We had issues last year where we cut production shifts because we didn t have enough chip market. With Arauco coming online, we shouldn t have that problem, said Johnston, adding that, this will definitely affect employee retention and morale. Everyone wants a stable job, right? So cutting less shifts will help us. Arauco s demand is creating a larger change at Biewer, said Johnston. We re in the middle of a large expansion ourselves. We re putting in a new canon An exterior view of the plant. 36 THE NORTHERN LOGGER SEPTEMBER 2018

4 THERE S A LOT OF EXCITEMENT, BUT ALSO CONCERN. EVERYBODY IS GOING TO NEED TO ADJUST TO THE PRODUCTION LEVELS THAT ARAUCO NEEDS, BUT THERE IS A LOT OF UNKNOWN. WE RE RUNNING OUR MILL AS MUCH AS WE CAN TO CAPITALIZE ON THE HEALTHY LUMBER MARKET RIGHT NOW. THE NORTHERN LOGGER SEPTEMBER

5 line and drying capacity. With the new Arauco mill and its increased capacity, we re investing in some capital and looking to increase our production by 50 percent, he said. Arauco s particle panels will be shipped throughout the Midwest and Canada in the ready-to-assemble furniture market, office furniture market and kitchen cabinet assembly. It is likely that Arauco hopes to be a major provider for the leading furniture companies in the Midwest, including Ashley Furniture, Sauder, Steelcase and Hayworth. Keen is looking forward to rolling in the first of the roundwood in September of this year. He has been addressing questions from the public about overharvesting: Some people have concerns that there won t be enough wood to supply Arauco, because it s a pretty big mill. You have to look at all the materials supplied to those closed mills combined. It was sustainable then. Our usage is going to be less than back in the early 2000s, he explained. Keen has worked in wood procurement for various sawmills since 1995 in northern lower Michigan. While the new plant will restore much of the market need, Arauco will still have to compete for the most affordable residuals in the region with a dozen paper mills in Wisconsin and the two remaining paper mills in the Upper Peninsula, UP Paper and Verso. There s a lot of excitement, but also concern, said Johnston, everybody is going to need to adjust to the production levels that Arauco needs, but there is a lot of unknown. We re running our mill as much as we can to capitalize on the healthy lumber market right now. The Wood The plant will procure a mix of softwood and dense hardwood with approximately 60 percent of it roundwood and 40 percent recovered fibers from sawmills. And unlike paper mills, particle board mills like Arauco will also buy up sawdust for production along with chips and roundwood. Pulpwood will be recovered too because we haven t had good softwood markets below the (Mackinac) Bridge in quite a few years, said Keen, attributing this hole in the market to all those closures in the early 2000s. The mill closures had little to do with 2008 housing crisis and general recession, said Keen. It wasn t the economics of the wood market in general. It was the old mills and old technology. The last new mill of this scale in Michigan was built in the 1980s, adding that, Old mills are extremely difficult to retrofit. NOWADAYS, EVERYTHING IS USED IN A SAWMILL OPERATION. EVEN OUT IN THE WOODS, THEY ARE TAKING PULPWOOD DOWN TO THREE INCH TO CLEAN UP THE BEST THEY CAN AND LEAVE THE BRANCHES AND LEAVES FOR GROUND NUTRIENTS. 38 THE NORTHERN LOGGER SEPTEMBER 2018

6 Keen is making contracts with sawmills and loggers with species mix in mind, but above all he s looking for sustainable logging practices. All Arauco mills are FSC certified and we give preference to Master Loggers. That s very important to us. The master logger ranks are growing in Northern Lower Michigan. I think that s in part because of Arauco putting out the word that we will give preference in terms of quota to Master Loggers, said Keen. 44.1% of Michigan forests are privately owned by families. For this reason, Keen says, Arauco is a gate wood mill and will be buying from independent loggers and sawmills alike, buying almost no stumpage at all. Other particle board and furniture companies are joining the FSC bandwagon. IKEA, the largest single consumer of wood globally, has committed that by 2020, all purchased materials will be FSC chain of custody certified. Keen recognizes that customers want to buy wood products that are made sustainably. Fortunately the wood industry is one of the best examples of doing a great job utilizing. When a tree is cut in the forest, everything is used. The bark is used for burn or landscaping. Clean chips and sawdust go into paper, a composite panel or a product like ours. The lumber is used for 2x4s, adding that, Nowadays, everything is used in a sawmill operation. Even out in the woods, they are taking pulpwood down to three inch to clean up the best they can and leave the branches and leaves for ground nutrients. How it s Made The plant spans 820,000 sq. ft. on a 600 acre plot of land purchased from the State of Michigan s Department of Natural Resources forest management division, who have provided Arauco with inventory data and suppliers sawmills. When the wood comes in, Arauco is looking for clean chips with no bark smaller than 11/2 inches. The chip is sorted by species before going into a flaker that sorts the chips into the two different sizes, the face and the core, the way one sorts different pieces before putting a jigsaw puzzle together. The core is made up of larger flakes in the board filling. The face uses finer particles, much like sawdust. There is a unique building for each different species. The flaker makes different size flakes and then is screened into face and core and oversized, which are sent back to the hammermill to break down into more face. Super fine chips will be burned in the on-site energy plant. The core and face flakes are dried, formed, mixed with glue and resin and then made into a sort of layer cake, one foot tall. Then as the thick matt rolls down a continuous press, heated by thermal oil to 410 degrees, the gap gets smaller until it is 1/4 11/2 inches thick. The continuous matt is cut into the various panel lengths depending on customer s dimension needs. Along with raw particle board, Arauco makes thermally fused melamine (TFM) sheets with a glue-impregnated paper and laminate, that allows the manufacturers to choose many different veneer colors. The plant will run 24/7 365 days a year. NL THE NORTHERN LOGGER SEPTEMBER