Timberland Investment

Northern Minnesota’s wood products industry woes continued in a big way today when Boise Inc. announced it will close two of its four paper machines at its International Falls mill resulting in 300 jobs being permanently eliminated.

***

Boise will retain about 580 employees at the mill running two paper machines producing uncoated white office paper and producing the pulp that’s made into paper, Virginia Aulin, Boise vice president of human resources and corporate affairs, told the News Tribune this morning.

"We will no longer have to buy pulp to make our paper in International Falls," Aulin said.

***

Earlier this year, Wisconsin-based Wausau Paper says it is closing its Brainerd mill and eliminating 134 jobs because of stiff global competition in overseas markets where the company was trying to expand.

Last August, Georgia-Pacific announced it would permanently close its Duluth hardboard plant, putting 141 employees out of work.

Since 2008, three oriented strand board manufacturing mills closed in Grand Rapids, Bemidji and Cook with a loss of hundreds of jobs. In Deerwood, 158 jobs were lost when Weyerhaeuser closed its strand lumber plant. And last year the Verso Paper Mill in Sartell closed for good after a deadly Memorial Day explosion and fire. It had already shed 175 jobs in late 2011 and the closure meant 260 more layoffs.

While many investors have flocked to the timber sector as way to diversify, the explosive growth prospects in bioproducts are often ignored.

Georgia-Pacific showcased its oriented strand board plant in Clarendon County Wednesday, which recently began ramping up operations to supply the needs of a quickening home-construction market in the eastern United States.

The Atlanta-based forest products company that is a closely held unit of Koch Industries bought the plant in 2010 from Grant Forest Products, a Canadian forest products company. Grant finished the plant, and another one in Allendale in 2007, but never began operations because it came on line just as the Great Recession crushed the housing industry.

***

Last month, Georgia-Pacific announced that it is developing plans for potential investments, totaling almost $400 million, in its plywood and lumber operations. The facility expansions and equipment upgrades would increase Georgia-Pacific's overall capacity by approximately 20%. Pending final site selection and required permitting, startup would be expected in the second half of 2014 through the beginning of 2015.

***

The beginning of production at the Clarendon OSB mill created 130 new jobs, [CEO Jim] Hannan said.

In addition, the mill will spend $30 million to $40 million a year purchasing trees — the raw material of OSB products — from land owners and timber harvesters in a 60 to 70 mile radius around the plant.