Weyerhaeuser Expanding Engineered Wood Products Portfolio
Announces strategic investment to build new TimberStrand® facility in Arkansas
SEATTLE, Nov. 18, 2024 /PRNewswire/ -- Weyerhaeuser Company (NYSE:WY) today announced its plan to invest approximately $500 million to build a new, state-of-the-art TimberStrand® facility near Monticello and Warren, Arkansas, expanding the company's engineered wood products (EWP) capacity in the U.S. South. The facility will have an annual production capacity of approximately 10 million cubic feet, which is comparable to the company's existing TimberStrand® facility in Kenora, Ontario. Construction is expected to begin in 2025, with the goal of starting operations in 2027.
The new facility will support an underserved and growing market for TimberStrand® in the U.S. South and showcase Weyerhaeuser's innovation in Wood Products. Leveraging its proprietary TimberStrand® technology, the company is combining institutional expertise from Kenora with extensive research and development to manufacture TimberStrand® with southern yellow pine as the primary feedstock. Given the company's sizeable timber holdings in Arkansas, the Monticello facility is strategically located to source most of its fiber log requirements from Weyerhaeuser timberlands in the region. Additionally, the plant will include a biomass-fueled cogeneration system, which will fully supply the plant's electrical needs and significantly reduce its environmental footprint.
Key attributes of the new facility:
- Doubles Weyerhaeuser's North American TimberStrand® capacity and enhances the company's EWP offerings in the U.S. South
- Delivers seamless integration with existing Weyerhaeuser timberlands and wood products distribution network, as well as with readily available freight and rail transportation in the region
- Expected to generate over $100 million of annual Adjusted EBITDA at full operating capacity, with additional upside from portfolio integration benefits
- Serves the company's strong and expanding customer base in the region, along with increasing demand for TimberStrand® in housing and industrial applications
- Enhances the company's product offering to the mass timber market as it continues to grow and mature
- Aligns with the company's long-term sustainability and greenhouse gas emissions reduction goals
- Expected to add nearly 200 high-quality jobs in Monticello and the surrounding area once fully operational
- Expands the company's total investment and impact in Arkansas, adding a third manufacturing facility to go along with a lumber mill in Dierks and a plywood and veneer plant in Emerson, as well as 1.2 million acres of timberlands, a seedling nursery and several offices — currently employing more than 700 people across the state
"This is an exciting opportunity to grow our EWP business, expand TimberStrand® into the U.S. South and provide an additional outlet for our fiber logs in Arkansas," said Devin W. Stockfish, president and chief executive officer. "Of the wood products we produce, EWP has the strongest tie to single-family housing construction activity, and this new facility aligns with our conviction that U.S. housing demand will remain favorable over the long term. In addition, this plant will allow Weyerhaeuser to better serve other customers and end markets in the region, including mass timber applications, and it supports our broader sustainability ambitions. I'd like to thank the state of Arkansas and local officials for working with Weyerhaeuser to site this facility. We look forward to building on our long history in the state and providing new employment opportunities in Monticello and surrounding communities."
The company expects to incur approximately $500 million of capital expenditures for the facility through 2027 and plans to exclude this investment for purposes of calculating the company's annual Adjusted Funds Available for Distribution, as used in its flexible cash return framework. This capital outlay may be sourced from cash on hand or through future financing, as the company deems appropriate.
ABOUT WEYERHAEUSER
Weyerhaeuser Company, one of the world's largest private owners of timberlands, began operations in 1900 and today owns or controls approximately 10.5 million acres of timberlands in the U.S., as well as 14 million acres of timberlands managed under long-term licenses in Canada. Weyerhaeuser has been a global leader in sustainability for more than a century and manages 100 percent of its timberlands on a fully sustainable basis in compliance with internationally recognized sustainable forestry standards. Weyerhaeuser is also one of the largest manufacturers of wood products in North America and operates additional business lines around real estate, climate solutions, energy and natural resources, among others. In 2023, the company generated $7.7 billion in net sales and employed approximately 9,300 people who serve customers worldwide. Operated as a real estate investment trust, Weyerhaeuser's common stock trades on the New York Stock Exchange under the symbol WY. Learn more at www.weyerhaeuser.com.
NON-GAAP FINANCIAL MEASURES
This news release references a forward-looking estimate of Adjusted EBITDA, which is a non-GAAP measure that management uses to evaluate the performance of the company. Adjusted EBITDA, as we define it, is operating income adjusted for depreciation, depletion, amortization, basis of real estate sold and special items. Adjusted EBITDA should not be considered in isolation from, and is not intended to represent an alternative to, our GAAP results. We have not provided a reconciliation of this forward-looking non-GAAP financial measure to the most comparable GAAP measure of net income because Adjusted EBITDA, as we define it, excludes the impact of certain items listed above in our definition of Adjusted EBITDA, and management cannot estimate these items or the impact they will have on Adjusted EBITDA on a forward-looking basis without unreasonable effort. As a result, investors may be unable to accurately compare the expected impact of this investment to our historical results or the results or expected results of other companies that may have treated such matters differently. Nonetheless, management believes that providing this forward-looking non-GAAP information about this investment is useful to investors, and given the uncertain nature of forward-looking statements, we believe investors are able to take into account the inherent limitations of this forward-looking non-GAAP information. We cannot reasonably predict the occurrence, timing or amount of any of the items that we exclude from our Adjusted EBITDA estimate. Accordingly, the actual effect of these items, when determined, could potentially be significant to the calculation of Adjusted EBITDA and actual results may differ materially from our estimate.
FORWARD-LOOKING STATEMENTS
This news release contains statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, concerning the company's plans to construct a new TimberStrand® manufacturing facility including without limitation with respect to the company's expectations about the timing of construction and the start of operations, the amount of required capital expenditure, plans for facility energy requirements, planned production capacity and expected financial and economic contributions including projected incremental annual Adjusted EBITDA and number of new jobs. We also reference the future growth of the mass timber market, the new facility's alignment with our long-term sustainability and greenhouse gas emissions reduction goals and our intent to exclude the cost of the facility from our annual calculation of Adjusted Funds Available for Distribution, and these also constitute forward-looking statements. Forward-looking statements may be identified by our use of certain words in such statements, including without limitation words such as "expected," "goal," "plan," and "will" and other words and expressions referencing future events or occurrences. All forward-looking statements speak only as of the date hereof, are based on current expectations and assumptions and are not guarantees of future events or performance. The realization of our expectations and the accuracy of our assumptions involve and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties include, but are not limited to, those identified in our 2023 Annual Report on Form 10-K, as well as those set forth from time to time in our other public statements, reports, registration statements, prospectuses, information statements and other filings with the Securities and Exchange Commission. In addition to those risks and uncertainties, other factors that could affect our ability to commence or complete construction of the new TimberStrand® facility within the stated time periods, or at all, or our ability to realize the projected financial and economic benefits of the project, include without limitation our ability to procure necessary and applicable government licenses, approvals and permits, our receipt of certain tax abatement and related financial incentives from state and local government, the performance of our vendors and contractors, facility equipment and machinery procurement and performance, and other factors not described herein or elsewhere because they are not currently known to us or because we currently judge them to be immaterial. There is no guarantee that any of the events anticipated by these forward-looking statements will occur. If any of the events do occur, there is no guarantee what effect they will have on the company's business, results of operations, cash flows, financial condition or future prospects. The company undertakes no obligation to update these forward-looking statements after the date of this news release.
For more information contact:
Weyerhaeuser
Analysts – Andy Taylor, 206-539-3907
Media – Nancy Thompson, 919-861-0342
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SOURCE Weyerhaeuser Company