Chilean Lumber Manufacturer to Build $325M Plant in Grayling Township

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Arauco, an international manufacturer of composite panels, plywood, and lumber, will invest $325 million to build a new manufacturing facility in Grayling Township, a move that will create about 250 jobs in the northern Michigan community. The plant is expected to be completed by the end of 2018.

“This is great news for northern Michigan, in terms of job expansion and new growth in the skilled trades,” says Gov. Rick Snyder. “Arauco’s presence in Michigan will be a significant contribution to the state’s forestry product industry, and it will have a positive impact on the economy throughout Crawford County.”

The facility will be built on a 600-acre site, and Arauco will spend $44 million to construct the facility and will invest another $281 million on machinery and equipment. Snyder says the project will propel an expansion of the logging supply sector in northern Michigan. 

The Michigan Department of Agriculture and Rural Development estimates an additional 12 to 15 additional logging crews will be needed in the region to supply the plant’s raw material needs. 

“Our presence in Michigan should promote Michigan’s emphasis on healthy and sustainable forest management through utilization of low value fiber,” says Jake Elston, vice president of corporate operations for Arauco North America. “This should be supportive of local landowners, sawmill operators, and other forestry related resources.”

Elston says Arauco obtains all wood fiber supplies from sustainably managed forests or post-industrial sources, and does not use wood from native forests in its products.

A nearly $12-million, 13-year Forest Products Processing Renaissance Zone was approved today by the Michigan Strategic Fund for the project. The selection of the Grayling Township site comes after a yearlong search by the Chile-based company, which has operations in Argentina, Brazil, Uruguay, Canada, and the United States.

About 90,000 jobs in the state are supported by the Michigan forest products industry, which generates about $17 billion annually, according to the Michigan State University Department of Forestry.

Construction on the plant is expected to begin next spring. 

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