2022-06-06 | NDAQ: PCH | Press release
PotlatchDeltic Corporation (Nasdaq: PCH) today announced that it is investing $131 million to expand and modernize its Waldo sawmill in Columbia County, Arkansas. The project will increase the mill’s annual capacity from 190 million board feet of lumber to approximately 275 million board feet. The investment will also significantly reduce the plant’s operating costs.
“The investment in Waldo is an exciting strategic growth opportunity, and it will position the plant among the lowest cost producers in the southern United States,” said Eric Cremers, President and CEO. “We expect to achieve an additional EBITDA of $25-30 million per year and an IRR of approximately 22% in our base case, which is based on a relatively conservative timber price assumption. The project reflects our belief that housing fundamentals will remain strong,” Cremers said.
PotlatchDeltic owns three sawmills and nearly 950,000 acres of forest land in Arkansas. The expansion is expected to create 55 new indirect jobs. “The Waldo Sawmill investment will further strengthen PotlatchDeltic’s important role in Arkansas’ forest products industry,” Governor Asa Hutchinson said. “By upgrading and expanding the plant, the company will support the community and position the plant and its team members for success long into the future.”
Waldo’s investment includes log yard and planer upgrades, a new saw line and a new continuous dryer. The existing plant will continue to operate during the project and is expected to be completed by the end of 2024. PotlatchDeltic has contracted with BID Group to design, build and equip the expansion and modernization.
PotlatchDeltic (Nasdaq: PCH) is a leading real estate investment trust (REIT) that owns approximately 1.8 million acres of forest land in Alabama, Arkansas, Idaho, Louisiana, Minnesota and Mississippi. Through its taxable REIT subsidiary, the company also operates six sawmills, an industrial-grade plywood mill, a residential and commercial real estate development business, and a rural timberland sales program. PotlatchDeltic, a leader in sustainable forestry practices, is committed to environmental and social responsibility and responsible governance. More information can be found at www.potlatchdeltic.com.
Caution Regarding Forward-Looking Information
This press release contains certain forward-looking statements within the meaning of federal securities laws, including, without limitation, our expectations regarding the Waldo, Arkansas plant, including annual capacity, cost reductions in operations, EBITDA, IRR, housing fundamentals, timber prices, employment creation, mill expansion completion schedule, ability of existing mill to continue operating during plant expansion and similar matters. Statements and assumptions regarding our investment in the Waldo plant are examples of forward-looking statements and do not constitute guarantees of future conduct or policy. The actual conduct of our business, including the development, implementation or continuation of any program, project, policy or initiative, may differ materially in the future. Actual results could differ materially from those expressed or implied by the forward-looking statements contained in this press release due to factors such as: difficulties or delays or increases in the cost of completion of the Waldo project; the ability to effectively manage the Waldo project and operating expenses; changes in the US housing market; changes in raw materials, fuel and other costs; transportation disruptions; the impact of natural disasters, weather, pandemics and other causes beyond the company’s control; and global economic, business, political and climatic conditions and effects on our customers and suppliers. These are just some of the factors that could affect the forward-looking statements contained in this press release. For more information about the risks and uncertainties associated with our business, please refer to our filings with the United States Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended on December 31, 2021 and our 2022 Quarterly Reports on Form 10-Q, which can be obtained on the Company’s website, www.potlatchdeltic.com. The forward-looking statements contained in this press release are intended to be subject to the safe harbor protection provided by federal securities laws. Except as required by applicable law, we do not intend to issue updates regarding any future revisions to our views to reflect events or circumstances after the date of this press release.