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PINNACLE TEAMS WITH SAWMILLS

Pinnacle’s new pellet mill will be built near and in partnership with the new Two Rivers Lumber sawmill in Demopolis, Ala., which started up in 2017.

Pinnacle Renewable Energy plans to build an industrial wood pellet production facility in the Southeast U.S. at Demopolis, Ala., in close proximity to its Aliceville, Ala. facility. The new mill will be located adjacent an existing large sawmill in Demopolis.

The Demopolis facility is expected to have annual production volume of 360,000 metric tons per annum (MTPA) that will be sold through Pinnacle’s contracted backlog of long-term, take-orpay off-take contracts. Commissioning the Demopolis fa

cility with initial industrial wood pellet production is expected in the second quarter of 2021.

The Demopolis facility will operate under a single partnership with Pinnacle, The Wes tervelt Company (TWC), a diversified land resources company, and Two Rivers Lumber Company, LLC (TRL), a McElroy Enterprises company, holding a 70%, 20% and 10% interest, respectively. TWC will sell a 10% interest of its currently held 30% interest in the Aliceville facility to TRL. Under the terms of the partnership, Pinnacle will operate the Demopolis facility and manage all aspects of customer relations, marketing, sales and logistics. Anticipated capital costs to construct the Demopolis facility is expected to be US$99 million.

The Demopolis facility, to be located on the same river system as the Aliceville facility, will be constructed to ensure finished pellets can be barged and loaded at the port in Mobile, Ala., which is the same port used for pellets produced at the Aliceville facility. The Demopolis facility is currently in the final stages of design and construction planning and permit applications have commenced. Longterm fiber supply agreements have been completed with the majority of suppliers, including TWC and TRL.

“Building on our early success at the Aliceville facility, which is currently producing wood pellets ahead of the commissioning curve, we are pleased to be expanding our presence in the U.S. Southeast and leveraging the existing relationships and infrastructure we have established in the area,” says Rob McCurdy, CEO of Pinnacle. “The U.S. Southeast expansion further aligns the company Pinnacle’s new pellet mill will be built near and in partnership with the new Two Rivers Lumber sawmill in Demopolis, Ala., shown here, which started up in 2017.

with our partners and fiber suppliers and allows for flexibility to optimize fiber flow between the facilities, while further diversifying our business in the region, which will see approximately 660,000 MTPA of pellet production once fully commissioned.”

Brian Luoma, President and CEO of The Westervelt Company, adds, “Since we began working with Pinnacle last year at the Aliceville mill, we have built a strong partnership based on our shared commitment to safety, quality, environmental responsibility and our communities. This new venture with Pinnacle and Two Rivers allows Westervelt to participate in a growing market while capturing the advantages of the abundant resources in this area. Whether it’s industry experience, supply chain advantages or land management experNEWSFEED

tise, this partnership will benefit from the strengths of each of the companies involved.” Jay McElroy, President of TRL, comments, “We are excited to partner with Pinnacle and Westervelt in the expansion of their U.S. Southeast wood pellet production. Both organizations have great reputations and success stories. This partnership accomplishes our goal to further expand our investment into wood products and build upon our businesses in the region.”

Two Rivers Lumber, backed by logging firm Sumter Timber and trucking firm McElroy Trucking, started up its large production southern yellow pine sawmill in August 2017. Pinnacle currently operates eight industrial wood pellet production facilities in Western Canada and one in Alabama, with an additional facility under construction in Alberta. Additionally, Pinnacle owns a port terminal in Prince Rupert, BC.

RESOLUTE TO BUY THREE SAWMILLS

Resolute Forest Products Inc. entered into an agreement to acquire Conifex Timber Inc.’s three sawmills in the U.S. South for $163 million plus working capital delivered at closing, which is currently estimated at $7 million. The three sawmills, with combined production capacity of 550MMBF, are located in Cross City, Fla. and Glenwood and El Dorado, Ark.

“This transaction will provide immediate scale in the attractive U.S. South, with quality assets in a rich fiber basket, close to growing end-markets,” says Yves Laflamme, president and CEO. “Scaling our lumber business forms a key part of our stated transformation strategy. This transaction will also diversify our lumber production. When operating to capacity, almost 25% of our production will be in the U.S. South.” Production capacity for Cross City is 185MMBF and it is currently operating on a twoshift basis. Glenwood’s capacity is also 185MMBF and it is operating on a 1.5 shift basis. The El Dorado mill, with capacity of 180MMBF, was recently idled.

Resolute intends to build on Conifex’s significant capital investments in recent years, including $55 million invested in El Dorado, $23 million in Glenwood and $12 million in Cross City.

The net proceeds from the sale will be used by Conifex to repay in full its outstanding lumber segment credit facility and for working capital and

general corporate purposes.

In November Conifex Timber announced that the Agent for its lumber segment lenders approved in principle Coni - fex’s proposed asset divestment and restructuring plan. NEWSFEED

CLT FIRM COMING SOUTH

Structurlam Mass Timber Corp. announced it will expand its operations into the U.S. with a plant in Conway, Ark., set to open in mid-2021. The Canadian-based company, in which Walmart has made an investment, will spend $90 million to purchase, retrofit and equip a former steel plant and create 130 jobs, and will source softwood lumber from Arkansasgrown southern pine trees.

“The commercial and residential building industry is experiencing a revolution brought on by the rise of mass timber building solutions,” says Hardy Wentzel, CEO of Structurlam. “We’re proud to establish roots in the great state of Arkansas and the city of Conway, and support Walmart as the exclusive supplier of mass timber products for its new home office campus.” Wentzel adds that the new U.S. location will answer the demand for mass timber building products and industrial matting products in the Southern, Central and Eastern U.S., and will complement the company’s British Columbia operation serving the Canadian, Pacific Northwest, California and Intermountain markets.

Walmart will be the first customer of Structurlam’s Con way facility. The world’s largest retailer plans to use more than 1.1 million cubic feet of mass timber in its new Home Office campus in Bentonville, Ark.

Established in 1962, Structurlam is based in Penticton, BC and has mass timber production facilities in Penticton, Okanagan Falls, and Olivier, BC.

Dan Bartlett, Executive Vice President, Corporate Affairs of Walmart, comments, “We want our new campus to be modern and sustainable while embracing the natural beauty of our home state. These priorities have a lot to do with our choice to use mass timber, and specifically Structurlam.”

The new Walmart home office campus will cover 350 acres. A 3-D model of the new campus shows buildings laid out in four quadrants, called “neighborhoods.” Each quadrant has parking and is surrounded by green spaces, courtyards and trails. Food trucks will be parked near the office buildings. At the center of the campus is a large activity hub for meetings and other events. A food hall sits nearby, although coffee bars, food trucks and other dining options will be scattered throughout the campus. Other amenities, such as a child care center, fitness center and hotel, are on the campus’s periphery.

STERLING OPENS LUFKIN CLT MILL

Sterling celebrated the Grand Opening of its second cross-laminated timber (CLT) facility with Texas Governor Greg Abbott on hand in October in Lufkin, Texas. The 350,000 sq ft. manufacturing facility will annually produce 200,000 TerraLam CLT mats for use on rights-of-way in the power transmission and distribution, oil and gas, and general

construction industries.

“I’m proud of our team here in Lufkin in making our dream of building one of the largest CLT manufacturing facilities in North America a reality,” says Sterling CEO Carter Sterling.

TerraLam mats are built with southern yellow pine. When built with a specialty adhesive and proprietary process, TerraLam mats last longer and are more sustainable than traditional bolted timber mats, the company reports.

Sterling’s first CLT facility is near Chicago. The two plants will now annually produce more than 400,000 CLT mats. NEWSFEED

CANFOR PURCHASE IS A NO-GO

Canfor Corp. has agreed with Great Pacific Capital Corp., a wholly-owned subsidiary of Great Pacific, to terminate a previously announced arrangement agreement that called for Great Pacific, which already owns 51% of Canfor, to purchase the remainder of the shares of Canfor for nearly $1 billion. Based on a vote of Canfor shareholders, the “majority of the minority” vote required under a “Protection of Minority Security Holders in Special Transactions” instrument, will not be achieved, coming up at least 5% short in votes. The deal, which would have turned Canfor from a public company into a private one, appeared to have the momentum to reach fruition, with the board of directors of Canfor recommending it following endorsement from various special committees and shareholder services.

The board had stated that the purchase price represented a significant premium over the existing share price, and that ongoing industry headwinds in the forestry sector had caused some instability in trading prices and in company operations, including multiple curtailments of sawmill production in the Northwest U.S. The company operates multiple sawmills in the Southern U.S.

LANCE FP BOUND FOR NEW MEXICO

Northern California’s Lance Forest Products is relocating a sawmill from Redding to Cimarron, NM with the help of a $350,000 investment from the state Economic Development Department. Lance Forest Products executives have developed logging and thinning agreements with ranches in the northern New Mexico region, and state officials are hoping additional thinning in the area will help reduce the risk of catastrophic wildfires such as the Ute Park blaze that burned 36,000 acres in and around Philmont Ranch in 2018.

Company officials are looking for 40 employees to staff the operation, and state officials are hoping the move will revitalize the forest restoration economy in the area, provide needed jobs and improve forest health. The Village of Cimarron also plans to develop an industrial park around the new sawmill to serve businesses that can use wood products for furniture and pellets. Lance Forest Products officials say they plan on relocating more than $1.2 million in machinery from California to New Mexico and hope to begin operations in mid 2020.