Plans of Louisiana Pacific Corp. to gradually shift production at its Roaring River facility from one type of exterior siding to pre-finishing another type will result in a loss of jobs there, said Mark Morrison, LP director of corporate affairs.
LP officials shared the plans in meetings with the facility’s 312 employees last week.
The exact timing of the production adjustments, as well as the timing and number of jobs cut in 2020, haven’t been determined, said Morrison in an interview Friday.
Customer and market demand will play a role in the timing of the adjustments, he said, adding that LP officials expect to know more in early 2020 and “will communicate more with employees then.”
Morrison said the job reductions would come as LP transitions from making LP SmartSide fiber-based siding to prefinishing and painting LP SmartSide strand-based siding. The plant currently only makes fiber-based siding, but is doing trial runs with prefinished, strand-based siding and will gradually produce more of that, he added.
As market demand for fiber-based siding declines and growth of the prefinished siding market continues, he said, “we aim to capture more of that growth.” LP is focused on providing prefinished strand-based solutions “that deliver the beauty and durability our customers desire,” he said.
“Prefinished” means the strand-based siding product is primed, pre-painted and in some cases cut to be ready for installation. “Roaring River will not only have the capability to paint Smartside trim and siding, but also output other value-added shapes and designs, including corners and shakes,” said Morrison.
Production of fiber-based siding is a wet process, while production of strand-based siding is a dry process. LP’s SmartSide strand-based siding consists of wood strands coated with a resin binder that is compressed and coated with a zinc-borate treatment to protect against termites and rot.
On Oct. 8, LP announced the addition of prefinishing capabilities at the Roaring River facility and acquisition of BlueLinx’s prefinishing assets near St. Louis. LP acquired Prefinished Staining Product Inc., a prefinished siding company in Green Bay, Wis., in early June.
“The investment in Roaring River, along with the investments in prefinishing operations in Wisconsin and Illinois, will provide us with facilities, capabilities and expertise to grow this market.” This includes increased emphasis on siding products for repairs and remodeling.
The Roaring River plant is a major buyer of low-grade timber and sawmill byproducts (sawdust, bark and chips) in Wilkes and the area. Except as landscaping mulch, otherwise there is little demand for these materials. Annually in recent years, around 60% of this raw wood has been used to make siding and related products at the LP plant and about 40% has been converted into wood chips and shipped by railroad cars to paper mills.
Concerning the current or anticipated future status of the purchase of low-grade timber and sawmill byproducts, Morrison only said the Roaring River facility “will keep its wood yard going and (keep) selling additional wood chips.”
A spokesman for one of the largest lumber mills in Wilkes said his company was told by LP that the Roaring River operation is cutting back on purchases of low-grade timber and sawmill byproducts.
The LP operation in Roaring River began as Abitibi in September 1970, with economic incentives provided by state and local governments. A second siding manufacturing line was added in 1980, and it became an ABTco plant when sold in 1990.
LP acquired the operation in 1999, and in 2007-08 started manufacturing SmartSide siding, a rot and termite resistant product. The plant has been continually updated and expanded over the years.
With almost 12 acres under roof on a 400-acre tract along the Yadkin River, the LP facility at the end of ABTco Road has an appraised county property tax value of $7.72 million.
Nearly 400 people were employed at the LP plant in Roaring River when the company held an event celebrating 20 years of producing LP SmartSide siding, trim and related products there in April 2017. The mill’s annual capacity at that time was 300 million square feet of siding, trim and related products a year.
Founded in 1973, Louisiana Pacific is a global company headquartered in Nashville, Tenn., and traded on the New York Stock exchange under LPX. According to a recent article on the Nasdaq Inc. website, LP is gradually transforming itself from a commodity producer to a more stable cash-generative company by increasing revenues and earnings before interest, taxes, depreciation and amortization.
LP reported net sales of $603 million in the third quarter ending Sept. 30, down 18% from $737 million in the third quarter of 2018.
However, net sales of the company’s SmartSide strand-based siding products increased 13% over the third quarter of 2018.
LP’s oriented strand board segment (OSB) reported net sales of $197 million in the third quarter of 2019, down by 43% from $349 million in the prior third quarter.