Walmart Inc. canceled its exclusive contract with Structurlam Mass Timber Corp., a move that caused Structurlam to temporarily suspend operations at its $90 million Conway facility, because of production issues, officials of both companies indicated.
The suspension of operations resulted in the layoff of 144 of Structurlam’s 168 employees at the plant.
The Bentonville retailer had contracted with Structurlam, based in Penticton, British Columbia, to provide 1.7 million cubic feet of mass timber to build Walmart’s expansive new headquarters complex.
In 2021, Structurlam converted a former steel plant in Conway into a 288,000-SF mass timber plant to turn Arkansas’ southern pine trees into Walmart’s building materials.
But the massive order proved to be too much too soon for the plant, and Walmart canceled the contract in January. Neither side, however, has shared details of the problem.
“It isn’t uncommon in manufacturing to have unexpected startup delays or issues,” said Cindi Marsiglio, Walmart’s senior vice president of corporate real estate. “You encounter them and overcome them. We are still very much part of the mass timber partnership and growth, but nonetheless I need to get our campus [finished].
“No one is more disappointed than we are, but it’s just an unfortunate circumstance we are in right now.”
Structurlam CEO Matthew Karmel said his company was in discussions with Walmart to resolve the production issues when the retailer announced the dissolution.
“[W]e were surprised,” Karmel said in an email to Arkansas Business. “Up to that point, we were engaged in constructive conversations to address customer issues and believed we were all making positive progress.”
Structurlam hopes to restart production at the plant soon.
‘Future Possibilities’
The use of mass timber in construction has been popular in Europe for decades, and the industry has been trying to gain a foothold in the U.S.
For Arkansas, products such as cross-laminated timber (CLT) and glued laminated timber (glulam) would provide more demand for one of its plentiful resources: southern yellow pine trees. Both Walmart and Structurlam officials expressed optimism that their problems won’t significantly affect the adoption of mass timber as a construction component.
“Demand for mass timber in North America is currently far outpacing supply, and that is projected to be the case for many years to come,” Karmel said. “We’re excited for future possibilities, as cross-laminated timber and glulam are rapidly gaining popularity in the United States.”
One of the reasons Walmart contracted with Structurlam and helped it open an Arkansas production facility was to help the state’s timber industry. For its part, Walmart remains a believer in mass timber and in Structurlam. Several Walmart executives sit on Structurlam’s board of directors and the retailer retains a financial stake in the company.
“We’re still committed to use mass timber,” said Marsiglio, who is a Structurlam board member. “We’ve had to find some alternate sources to mix in so that we can continue to move forward and stay on schedule. It has just been production delays that didn’t mix with our schedule, really.
“Even though there is less Structurlam-only material in the project, we still have some buildings to figure out so I can’t give you what it is really going to land at. Mass timber has a ton of opportunity, and they are still actively working through these challenges that they had.”
Marsiglio said the Walmart HQ is on schedule to be completed in 2025.
What Went Wrong
Marsiglio said she would “direct the reason” for the production problems to Structurlam.
“Typical of any new, complex manufacturing operation, startup issues are inevitable and expected,” Karmel said. “Bringing the plant up to full capacity required fine-tuning state-of-the-art, highly sophisticated equipment, training a skilled workforce, and developing a diverse supply base qualified to meet Structurlam’s exceptionally high standards for mass timber.
“The Conway plant has met these challenges with flying colors — its cross-laminated timber and glulam production capabilities already exceed its plan objectives and its processes have been validated repeatedly by the APA [the Engineered Wood Association] to exceed U.S. regulatory standards.”
Manufacturing CLT or glulam is more involved than producing wood products found at a home improvement store. For example, CLT requires lumber that has a moisture content of between 12% and 15%, drier than the 19% of traditional wood products.
Drying wood to 12%-15% isn’t complex since all harvested wood has to be dried in a kiln anyway. But in drying the wood, more imperfections or flaws can be caused or revealed, meaning some of the product might not be architectural surface finish quality.
“What is probably more of a challenge or a hurdle to get over is the quality of the wood, the clarity of the finish surface,” said Jason Wright, a partner with Modus Studio in Fayetteville. “For every 10 boards that come off the line, not all 10 are going to be clear enough or free of defects enough to be considered architectural-grade finish board.”
Modus Studio is another big believer in CLT. It designed the University of Arkansas’ 202,027-SF Adohi Hall, which used mass timber from Austria.
Wright said European manufacturers have had more time to develop a “smoother process” for mass timber, but he expected American manufacturers to catch up.
“It’s always a challenge to get started and try something new,” Marsiglio said. “We’re not taking our foot off the gas for mass timber. We’ll continue to support Structurlam.”
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