Residents and officials eager for a new siding plant to open in northeast Minnesota are going to have to wait a bit longer.
Louisiana Pacific — which last year announced the purchase of a former mill in Cook, Minn., to expand its thriving engineered wood siding business — now says it will first convert a mill the company operates in British Columbia to make siding.
In a conference call with analysts, LP's chief operating officer Brad Southern said it makes sense to develop the Canadian site first because of its proximity to the company's West Coast customer base, and because the mill is already staffed and operating.
But that doesn't mean a northern Minnesota plant is off the table. The Cook location and another site in Quebec "are likely options for future siding expansion," said Southern. He added the company is "continuing our planning process for both locations with a focus on Cook."
Still, the earliest the Cook mill would likely open is 2020, Southern told analysts. The company would first need to construct buildings and equip the entire mill.
"The advantages of Cook, though, is it is a larger mill," said Southern. "Cook gives us a lot of upside on volume. It's a beautiful piece of land, a beautiful site to construct the mill and then expand it."
State legislators and economic development officials on the Iron Range have had high hopes for the Louisiana Pacific plant as something that could kickstart the region's wood products industry.
LP officials have said the plant would employ around 150 people, but state officials say the number of spinoff jobs in logging and other sectors could be even greater.
"This is only disappointing in that we won't have the jobs in the next year or so, it will be further out," said Mark Phillips, commissioner of the Iron Range Resources and Rehabilitation Board.
"I'm not sure anybody anticipated the length of time it's going to take to get Cook up and running," he added.
The IRRRB approved a package of $36 million in economic incentives for the plant last year. But that was predicated on the plant being built in Hoyt Lakes.
Now that LP has purchased the former mill in Cook, Phillips said they will likely need to tweak the incentive package. "But essentially we're trying to keep the package on the table," Phillips said.
State lawmakers have also passed an annual production incentive of $3 million that could amount to a $30 million subsidy over 10 years.
Louisiana Pacific's engineered siding business, led by a product known as SmartSide, has thrived in recent years. The company just reported first quarter sales of $214 million, up 18 percent from the same time last year.
That growth has prompted the company to look to Minnesota to expand its business. The IRRRB's Phillips said LP has spent more than $10 million on the Cook facility.
"We're still elated," he said. "It's very likely to happen in Cook, more than likely I'd say even. People are going to have to be patient."