West Fraser announced that it has entered into an agreement to acquire Georgia Pacific’s oriented strand board (OSB) mill near Allendale, South Carolina for approximately $280 million. The sale is anticipated to close following successful completion of U.S. regulatory reviews and satisfaction of customary conditions.
The Allendale mill, which initially began producing OSB in 2007, has been idle since late 2019. It has an estimated capacity of about 760 million square feet (3/8-inch basis).
West Fraser plans to invest an estimated $70 million to upgrade and optimize the facility in preparation for its restart. The improvements will take about nine months to complete.
The mill is expected to directly employ about 135 people. West Fraser expects it to be one of the lowest cost mills in the company’s OSB portfolio after the optimization is complete and the mill
has ramped up to full production, a process that typically takes 18-24 months after restart.
It is an attractive location for West Fraser because of abundant, low-cost forest resources in the South. The mill’s additional OSB capacity will also give West Fraser the flexibility to better meet customer demand, particularly from large, growing end-markets in the Southeastern U.S.
