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Weyerhaeuser Company WY is all set to invest approximately $500 million to build a new, state-of-the-art TimberStrand facility near Monticello and Warren, AR. This will expand its engineered wood products (EWP) capacity in the Southern United States.
WY expects to begin construction of the facility in 2025 and start operations by 2027.
Details of the New Facility
Leveraging its proprietary TimberStrand technology, Weyerhaeuser will combine institutional expertise from Kenora, Ontario, with extensive research and development to manufacture a facility with southern yellow pine as the primary feedstock. Comparable to WY’s existing TimberStrand facility in Kenora, the new facility will have an annual production capacity of approximately 10 million cubic feet, which will double its total North American capacity.
The Monticello facility is strategically located to source most of its fiber log requirements from Weyerhaeuser timberlands in Arkansas. Also, the plant will include a biomass-fueled cogeneration system, which will fully supply the electrical needs and significantly reduce its environmental footprint.
Notably, the new facility will support an underserved and growing market for TimberStrand in the Southern United States and showcase Weyerhaeuser's innovation in Wood Products. It will also expand its customer base, with rising demand for TimberStrand in housing and industrial applications. In addition to these benefits, the new facility favorably aligns with the company's long-term sustainability and greenhouse gas emissions reduction goals.
WY expects to incur approximately $500 million in capital expenditures for the facility through 2027 and generate more than $100 million of annual adjusted EBITDA at full operating capacity.
A Look at the Timberlands Business Expansion
Weyerhaeuser’s business segments — Timberlands, Real Estate, Energy and Natural Resources and Wood Products — are categorized primarily on the basis of products and services.
In the second quarter, Weyerhaeuser announced strategic timberland acquisitions in Alabama, covering 84,300 acres for $244 million. The first transaction, valued at $48 million, closed in the second quarter of 2024, with the remaining acquisitions expected to close in the second half of the year, subject to customary conditions.
These mature and highly productive timberlands are strategically located to enhance Weyerhaeuser's existing operations, delivering immediate synergies. The acquisitions are projected to generate industry-leading cash flow and high harvest volumes per acre within the company’s Southern Timberlands business. Including these deals, Weyerhaeuser has invested approximately $775 million toward its goal of expanding its Timberlands portfolio through $1 billion of disciplined investments by the end of 2025.