After yet another consolidating acquisition of southern sawmills, it seems like an opportune moment to review the changing profile of the softwood lumber industry in the U.S. South. At the end of 2008 – the early days of the housing crisis – southern softwood lumber capacity totaled near an all-time high of 19.5 billion board feet. A slew of mill closures in 2009 and 2010 trimmed capacity to below 17 billion board feet before beginning a long recovery. In 2017, this capacity finally exceeded its 2008 total and continues to climb at a steady clip.
The southern sawmill story extends deeper than the aggregate capacity. The firms behind the capacity changed considerably over the past decade. In 2008, the South was led by the triumvirate of Weyerhaeuser, Georgia-Pacific, and West Fraser (as it is today). However, West Fraser and Canfor were relative newcomers to the region and the only Canadian firms to make inroads in the South. Southern lumber capacity owned by Canadian firms stood at 14% of the total, while the top ten firms combined to control 54%.
Today, the picture differs. West Fraser and Canfor aggressively expanded their footprints over the last ten years. West Fraser is now the region’s largest producer. Two new Canadian firms, Interfor and Conifex, also entered the top ten. Conifex is the smallest and most recent arrival, as its acquisition of Suwannee Lumber (Cross City, FL) and Caddo River Forest Products (Glenwood, AR) was completed just days ago. Canadian firms now account for a full third of the region’s lumber capacity.
The top ten firms comprise a greater portion of capacity (66%) than a decade ago. Four firms dropped off of the top 10 list (Temple-Inland, Gilman Companies, Rayonier, and Tolleson). Looking forward, we expect the ranking of the top ten to change little by the end of 2020, but most of the firms represented have announced plans to further increase capacity by expanding existing mills and/or building greenfield mills.
The data for this post was pulled from Forisk’s comprehensive analysis of North American wood-using current and historic capacity by firm and sector across North America, along with projected capacities by sector and region for the next two years. For more information, click, here.