Arauco’s $400 million mill moving along as planned
Dan Sanderson | Staff Writer
The whole experience has been wonderful. We had a great relationship with the state, we had great support from the state and amazing support from the local community. It’s not just from the leadership, but the folks that we ran into in town. It’s really one of the reasons we picked Grayling and Michigan at the end of the day. It’s the people." – Jake Elston, Vice President of Operations for Arauco North America
Construction for the $400 million particleboard mill, which will give Crawford County and the region a well-needed boost in economic growth, is on time and on budget.
Arauco, a global producer of wood products, is building a 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 square feet with an annual capacity of 452 million square feet (800,000 cubic meters).
Members of Arauco North America’s executive leadership team, who are based out of Atlanta, Georgia, were in Grayling last week to get updates on construction and plans for training employees to work there through Kirtland Community College.
It was the first time company leaders have been in Grayling since the April 12 groundbreaking for the project.
“This was incredibly exciting for me to kind of roll in and look at the project,” said Jake Elston, the vice president of operations for Arauco North America.
Elston said construction crews are about a quarter of the way through the project, and company officials maintain a positive outlook on the venture.
“The whole experience has been wonderful. We had a great relationship with the state, we had great support from the state and amazing support from the local community,” Elston said. “It’s not just from the leadership, but the folks that we ran into in town. It’s really one of the reasons we picked Grayling and Michigan at the end of the day. It’s the people. We’re a people-focused business at the end of the day. Everybody should be a people-focused business at the end of the day. It’s really what matters and it’s what drives a business.”
The mill will manufacture ready-to-assemble furniture, kitchen cabinets, industrial cabinets, and school furnishings.
“There is a lot of particleboard that’s required in the world, and it’s really quite amazing when you think about it,” Elston said.
The particleboard will be made with residual wood – sawdust and woodchips – which will come from other lumber mills within a 100-mile radius. Wood chips from the tops of trees and tree thinnings will be added into the mix, so that residents and tourists should not see drastic changes to the natural landscape in northern Michigan.
“You will never see big saw logs in our facility,” Elston said. “One, they’re too expensive for the business model. You wouldn’t want to use them because there are higher value things for those trees to be used for.”
Elston credits the company’s design and construction team for the success of the project. The team includes Tex Giddens, project director; Manfred Timmermann, project manager; Goran Oscarsson, innovation and optimization manager; Andrew Eddy, northern regional engineer manager; and Michael Battisti, business reliability manager.
“If they do a good job building it and do a good job running it, we’ll be around here for a long time and to be a partner in the community,” Elston said.
Arauco is now hiring its senior leadership team, who will run the mill.
“We’re building an equally impressive operational team that will be prepared to take over and run the organization,” he said.
In short order, technicians and the operating team will be hired. Between 200 and 250 jobs will be on staff when the mill is in full operations.
“We would like to have our hiring decisions made by in large at the end of 2017,” Elston said.
Resins, used to press and bind the wood together, will come from the Georgia Pacific Resins plant located across the road from the Aracuo facility.
“We have a long, very productive, cooperative relationship with Georgia Pacific Resins,” Elston said. “We’ve used them at our other facilities for years. This should be true business partnership. We want them to be successful, and we certainly know they will want us to be successful as well. They’ll help us get there.”
The first board is projected to come off the line at the mill around this time next year.
“We could get our first board out in August or September of 2018, but there is the gap of getting your first board out and really being in production,” Elston said.
The Beaver Creek-Grayling Townships Utility Authority received a $3.2 million grant from the United States Department of Commerce’s Economic Development Administration, and a $4.1 million United States Department of Agriculture’s Rural Utilities Service low-interest loan to provide water and waste water utilities for the Arauco mill. The utilities will also be used by Kirtland Community College, Charlie’s Country Corner, the Super 8 Motel, Georgia Pacific, and property developer Carroll Knight.
Grayling Charter Township Supervisor Rick Harland said planning for utilities will wrap up this winter.
“Most of the project will start in early spring as soon as we can get started,” Harland said.
The Grayling Charter Township Board and Crawford County Economic Development Partnership also approved a railroad spur that will connect with the Lake State Railway to serve Arauco.
“They’ll use that to ship all their product in and out,” Harland said.