Work is underway near Grayling for Arauco’s $400 million mill
Dan Sanderson | Staff Writer
“I think it’s going to be huge if you look at the number of jobs, and you can double or maybe even triple that for all that it’s going to take to supply it. It will be a huge boon to the area, and it’s not just Crawford County. It will expand out into the four counties that border us.” – Dave Stephenson, Chairman of the Crawford County Board of Commissioners
As cranes, bulldozers, and earthmovers chugged away in the background, company and governmental officials took part in a groundbreaking for the official start of construction of a $400 million particleboard plant, which will transform the Grayling economy.
Arauco, a global producer of wood products, held groundbreaking ceremonies on Wednesday, April 12, for its new state-of-the-art plant that is located off of Four Mile Road in Grayling Charter Township.
The facility is scheduled to be operational by late 2018.
“Once completed, the plant will feature North America’s largest single continuous particleboard press (170 ft.) and will be one of the most productive in the world. The plant’s main structure will measure 820,000 ft2 with an annual capacity of 452 million ft2 (800,000 m3),” according to an Arauco press release.
Kevin Shotblot, the vice president of sales and marketing from Arauco North America, said building the plant in Grayling is a major undertaking.
“This will be one of the most important plants of its kind in North America, and anywhere in the world,” Shotbolt said.
The facility is the first new particleboard plant to be built in North America, bucking an 18-year trend.
Dozens of mills that produce products similar to what will be manufactured in Grayling closed, including the Georgia Pacific Plant in Gaylord at the height of housing boom in 2006. As the housing industry was on its way to recovery in 2014, mills were operating with inefficient equipment and materials, and the quality of their products was inconsistent.
Instead of building and re-investing in plants in North America, firms built mills in China, Southeast Asia, South America, Russia, and Eastern Europe, while others shut down.
“They followed the furniture industry, where it emerged, and most flat just gave up here,” Shotbolt said.
Shotbolt said that some its customers that purchase its products are 700 to 1,500 miles away from its existing mills. Along with the high cost of shipping, the company has had to face a lack in over the road truck shipping and lack of railroad service that is focused on serving the oil industry.
Those customers dot the Michigan map from as far away as Dowagiac, Sturgis, Coldwater, Mt Clemens, Grand Rapids, Kentwood, and Midland to nearby Alpena.
Arauco hopes that its costumers will choose to return to U.S. soil when the plant is up and running.
“Our hope is that we start to attract some of those furniture manufactures that have left our shores to come back to North America, and particularly to this region,” Shotbolt said.
Shotbolt praised State of Michigan officials in all the departments the plant worked with as well as local leaders.
“This event today is much more than a celebration,” Shotblot said of the groundbreaking. “In many ways it’s a testimony to good caring leadership. It’s a testimony to the resilience of small communities, and we operate only in small communities, and we understand what’s that like to survive and hopefully start to thrive with investments like this.”
Gonzalo Zegers, the senior vice president of international and business for Arauco, said the Santiago, Chile-based company was founded 47 years ago.
The company was established to produce wood products and to manage renewable forest resources.
Arauco is now one of the largest forestry services business in the world with plants in North America, South America, Europe, and South Africa. Arauco sells its products to more than 80 countries.
“We have the utmost respect for our surroundings, and as a forest products company, it’s natural that we take a long-term view to create sustainable, and long-term values in all of the communities in which we operate,” Zegers said. “Likewise, our North American commitment is a lasting one.”
Gov. Rick Snyder, who attended the groundbreaking, said the forest products industry is part of the state’s rich heritage.
“That’s part of who Michigan has been and will be, and we’re very proud of that,” Snyder said.
Snyder also noted that Michigan Department of Natural Resources and Michigan Department of Agriculture and Rural Developed created task forces to create plans that emphasize timber and the forest products industry in Michigan. The efforts, in turn, are helping create jobs and opportunities for future generations.
“Government doesn’t do that,” Snyder said. “We can create the environment for success, and let free enterprise work.”
“The Grayling plant’s raw fiber needs are going to be 100 percent supplied by residual wood sourced from nearby sawmills, logging operations, and low-grade wood fiber traditionally left on the forest floor,” according to an Arauco press release.
Bill O’ Neill, chief of forest resources division for the DNR, said the state grows two to three times more trees than what are harvested. Those renewable resources are used in people’s homes and everyday lives.
“If you want to do the right thing for the world, use wood,” O’Neill said.
The particleboard produced at the plant ultimately will be used in commercial and residential furniture, fixtures, and cabinetry.
Aruaco expects construction of the Grayling plant will create approximately 700 construction jobs, and running the plant will create approximately 200 direct jobs. It is also estimated that a manufacturing plant of this scale typically creates one to two support jobs locally for every direct job. The majority of recruitment for plant employment will begin in late 2017.
“We need to staff a very technological mill, and to get the people right, because it’s important,” said Jake Elston, the vice president of operations for Arauco North America.
The groundbreaking culminates three years of work done by company, state, and local officials, which will set the tone for economic development for generations to come.
“I think it’s going to be huge if you look at the number of jobs, and you can double or maybe even triple that for all that it’s going to take to supply it,” said Dave Stephenson, chairman of the Crawford County Board of Commissioners. “It will be a huge boon to the area, and it’s not just Crawford County. It will expand out into the four counties that border us.”
The retired president from AJD Forest Products, which is located just west of the Arauco plant, Stephenson said the new mill will create a market for pine pulp and help manage habitat for the Kirtland’s warbler.
“They’re a topnotch company,” Stephenson said. “They’re doing things right.”