Louisiana-Pacific starts siding line in Canada, not Cook

An example of Louisiana-Pacific’s wood siding product.

Officials with Louisiana-Pacific announced Friday that the company would start a new line of wood siding at its plant in Dawson Creek, British Columbia. That plant currently produces OSB, or oriented stand board, a form of wood paneling.

That means that the company’s development of the former Ainsworth plant in Cook, Minnesota, moves to the back burner.

William Bradley “Brad” Southern, Executive Vice President and chief operations officer, made the announcement in Friday’s quarterly earnings call during an update on Louisiana-Pacific’s SmartSide product line.

“Because of the growth we’re seeing on the West Coast and our desire to lower the risk, our current plan is to convert our Dawson Creek, British Columbia OSB mill to a SmartSide plant,” said Southern. “Key factors that differentiated this side are timing to first board, wood cost, cost of production, proximity to our West Coast customer base, and reduced operational risk due to the fact that Dawson Creek is currently staffed and producing OSB.”

Southern did not shut the door on future expansions to Cook or another recently acquired mill in Quebec.

“Both Val-d’Or, Quebec and Cook, Minnesota sites are likely options for future Siding expansion,” said Southern. “Given our strong SmartSide demand growth, we estimate that the Dawson Creek conversion will satisfy about two to three years of demand growth.”

That means any production at the former Ainsworth plant in Cook will happen after 2020 at the earliest. The Iron Range Resources and Rehabilitation Board offered tax breaks to Louisiana-Pacific last year after state tax breaks failed with the rest of the tax bill. Initially slated for Hoyt Lakes, last fall L-P announced it was looking at Cook instead.

In the end, Cook appears to be the company’s next option, though with a much looser timeline.

“Given the brownfield nature of Cook, we have initiated a more detailed engineering and design study, which will be followed by the necessary environmental permitting assessments,” said Southern. “These are exciting times for our SmartSide business. We’re fortunate to have multiple viable manufacturing options to support the demand growth being realized by our sales and marketing team, with the support of our distribution partners.”

So if SmartSide takes off, and if the company’s detailed study comes up roses, Louisiana-Pacific might yet open a new facility in Cook. Nevertheless, hopes of an immediate economic development home run for Northern Minnesota have sailed into foul territory.

Comments

  1. Scott Dane, Executive Director ACLT says:

    Your report and interpretation is not accurate. The Canadian plant conversion is to address immediate need which the Cook site could not obviously do. But LP is going ahead with engineering and permitting for the Cook site, with an operational target date of 2020. What did you think, that the Cook site was a turnkey operation. The good news is that the decision to go forward with the Cook site over the other recently acquired Canadian site moves Cook to the forefront.

    • Hi Scott — That’s almost exactly what I said. The last time we covered this we were being told that the Cook plant could be running by 2018. This clearly pushes that back to 2020. You’ll note that I included L-P’s comments about their plans at Cook.

  2. Gray Camp says:

    The quote from Southern “Both Val-d’Or, Quebec and Cook, Minnesota sites are likely options for future Siding expansion” doesn’t sound very definitive. Perhaps he is simply trying to convince shareholders that LP is not overextending by downplaying that they are really planning on installing both the BC plant and the Cook plants? Even if they are proceeding with design and permitting doesn’t mean they can’t back away prior to pulling the trigger on construction however.

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