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Timber CEO: Georgia-Pacific Closures to Range Far and Wide in Arkansas

3 min read

Georgia-Pacific’s announced plan to close its bleached board operations in Crossett will have a ripple effect across Arkansas’ forest products industry, Steve Anthony, CEO of Anthony Timberlands Inc., told Arkansas Business.

It also makes the slow-to-materialize Sun Paper plant in Clark County more important than ever, he said. “But who knows if that will ever happen?”

“This is a big deal way beyond the 500 jobs, which devastates Crossett and will have a significant negative impact on El Dorado,” Anthony said in a phone interview Wednesday morning. “The ramifications of this really extend further than, say, Kimberly-Clark laying off 500 people.”

G-P’s bleached board plant was a “huge consumer” of timber products that are already in oversupply, he said. That includes wood fuel, otherwise useless timber byproducts that are burned as boiler fuel, and wood chips that are part of the paper formula.

There is already a glut of wood fuel, Anthony said, because stricter environmental regulations had encouraged many industrial users to switch to natural gas boilers rather than retrofitting wood-burning boilers with the necessary pollution controls. The loss of G-P as a buyer and user of wood fuel will exacerbate the glut of unused wood fuel in Arkansas’ timber region, Anthony predicted.

G-P’s decision will impact Anthony Timberlands specifically because the Crossett operation has been the sole buyer of hardwood chips manufactured at the sawmill in Mount Holly (Union County) that Anthony bought from Watson Sawmill Inc. just last summer. Unlike wood fuel, chips are specifically manufactured for use in paper products.

The Mount Holly sawmill also makes lumber, and its chipping equipment is also used to manufacture softwood pine chips. But Anthony said about 75% of the chips produced at Mount Holly have been hardwood, and it will take time to find buyers if that capacity is converted to pine chips because most consumers already have contracts with other chip makers.

“It becomes a price issue, so you’re buying your way into the market, which is never good,” he said.

In April 2016, Shandong Sun Paper Industry of China chose a site near Arkadelphia for a pulp plant with a price tag of $1.3 billion. At that time, it was expected to add vast new demand for wood pulp from south Arkansas’ timberland.

In the ensuing three years, the scope of the plant has changed and a trade war with China has commenced. As of April, the Arkansas Economic Development Commission was still expressing confidence that the plant would be built. The Arkansas Department of Environmental Quality’s hearing on Sun Paper’s air permit last week “went smoothly,” according to Max Braswell, the executive vice president of the Arkansas Forestry Association, who attended the hearing.

“We understand that is still a viable project,” Braswell said Wednesday morning.

While Anthony seemed less confident, he said Sun Paper would be more important than ever — not to increase demand but to replace G-P as a buyer of Arkansas wood products. 

Having manufacturing infrastructure that is close to the forests is “very important,” Braswell said. “Export markets currently aren’t large enough to replace having manufacturing facilities here in the state and close to the fiber source.”

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