West Fraser Entered Into Agreement to Acquire OSB Mill
Rubber and Wood | 2021-10-28 00:27:13
The Allendale facility, with an estimated capacity of approximately 760 million square feet, has been idle since late-2019.
By Paul Ploumis
SEATTLE (Scrap Monster): West Fraser Timber Co. Ltd. announced that it has entered into an agreement to acquire Georgia Pacific’s oriented strand board (OSB) mill located in Allendale, South Carolina. The $280 million worth acquisition deal is expected to close further to successful completion of U.S. regulatory reviews and satisfaction of customary conditions. The acquisition will be financed with cash in hand.
The Allendale facility, with an estimated capacity of approximately 760 million square feet, has been idle since late-2019. West Fraser plans to make additional capital investment of around $70 million to upgrade and optimize the facility. The upgrade works are expected to extend to nearly nine months. A ramp up to full production may take up to 2 years, which in turn will generate around 135 direct jobs.
The modernization of the Allendale facility will significantly enhance West Fraser’s OSB portfolio. The additional OSB capacity will help the company to better meet customer demand, especially from large, growing southeastern U.S. end markets.
Rey Ferris, President and CEO, West Fraser noted that it looks forward to modernize the Allendale mill to make it another component of the company’s low-cost production portfolio. The additional production capability will help West Fraser to meet demand growth for its engineered wood products, he added.
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