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July 28, 2016
ARAUCO NORTH AMERICA SUMMER NEWSLETTER
BUILDING FOR THE LONG HAUL
Kelly Shotbolt, President of ARAUCO North America


 
We’re gearing up for the International Woodworking Fair next month in Atlanta, the biggest and most important event for the North American wood products industry. All indications are that it will be a great show with the largest numbers of exhibitors and attendees participating since IWF 2008. We will commemorate this renewed industry vitality with a newly designed booth to meet with our customers and showcase our high-quality products and value-added services.

As the articles in this quarter’s newsletter attest, we will have no shortage of things to talk about at IWF. These articles reflect the deep and unwavering commitment ARAUCO is making - setting aside short term gains in favor of a long-term vision of strategic growth through investments in production capacity, product development and informational resources for our customers.

Allow me to expound on each of these themes:

Capacity Boost: The particleboard plant ARAUCO is constructing in Grayling, MI, will not only be the largest single-line capacity particleboard plant in North America, but it also represents the first green field particleboard plant constructed on this continent since 2001. When completed in late 2018, it will bolster our commitment to servicing customers, especially those in the Midwest and eastern Canada. We’re currently laying the groundwork needed to proceed with construction: clearing the site, securing environmental permits and hiring a management team. At the same time, we’re enjoying getting to know our Grayling neighbors. The city has been a fantastic partner and we look forward to being a member of the community and providing career opportunities for many local residents.

The huge $325 million commitment to build the Grayling facility comes on the heels of an important $30 million investment to upgrade and expand the ARAUCO particleboard plant in Bennettsville, SC. We’ve added a vast new drying area that not only increases the plant’s annual capacity by 50 million square feet of raw particleboard, but also results in delivering a better product to our customers. We have also added a state-of-the-art fast-cycle press to double the plant’s output of thermally-fused laminate panels.

Product Innovation: At IWF, we’ll present a wide representation of our product line. Highlights include:

• Prism, ARAUCO’s fashion-forward collection of thermally-fused laminates, will be launching a new collection and EIR texture called Taction adding new possibilities to create value for architects, designers, fabricators and distributors.

• FIBREX, which is celebrating 25 years, continues to innovate with new products like HDF chalkboard and whiteboard for restaurants, offices and other end uses, along with a new in-line etching process that imitates woodgrains.

• AraucoPly has long been the go-to source for sustainably sourced softwood plywood. Now, in addition to sanded, natural wood faces, we’ve added a new painted alternative, which has become an especially hot product in the transportation industry.

Going Green: Our sustainability story begins with sourcing material from our almost four million acres of well-managed plantation forest in South America, while the North American version begins with repurposing recovered and recycled wood to make high-value wood composite panels. Over the years we have worked hard to obtain FSC certification for our plantations and FSC chain of custody for all of our manufacturing facilities. Our ongoing R&D efforts have led to the development of VESTA, an ultra-low emitting formaldehyde (ULEF) resin system that more customers demand for LEED and other green building projects.

In addition, we continue to lower our carbon footprint and have worked to secure ISO 14001 and OHSAS 18001 certifications for all of our operations. We are proud of our record of environmental stewardship and eagerly share our accomplishments and ongoing commitment in our annual Sustainability Report. For the benefit of our customers who specify our products to achieve certification for LEED, Green Globes and other green building programs, we are developing new web pages to simplify the process. We are also working on new resources including environmental product declarations for our products.

These are just a few of the initiatives we have in the works. Among other things, we’re still in the process of optimizing a new SAP information system. This is a huge undertaking, and to no one’s surprise is proving to have a lengthy learning curve. But we’re well on our way and know that the short-term challenges will give way to long-term benefits that will allow us to collect and analyze business intelligence to provide a whole new level of superior customer service.

If you are coming to IWF, be sure to stop by and visit us at booth #3237. See for yourself how ARAUCO is reshaping its future to meet the challenges and opportunities of the North American wood products industry. On behalf of the entire ARAUCO team, I look forward to seeing you in Atlanta.





SITE PREPPED FOR HUGE PARTICLEBOARD PLANT’S CONSTRUCTION


 
Constructing North America’s largest single-press capacity particleboard operation in Grayling, Michigan, is no small feat.

Just ask Jake Elston, Vice President of Operations for ARAUCO North America. He knows full well that the devil is in the details from the site selection and land procurement completed last year, up to the very moment the first panel comes off the press in late 2018.

“This is definitely one of the most exciting things many of us have ever been involved with in our careers,” says Elston, who joined the company 21 years ago after finishing his tour of duty with the U.S. Navy. “This mill will utilize the newest technology available in the industry. It will truly be a state of the art composite panel mill.”

How big is the Grayling particleboard project?
The entire operation will be situated on one square mile located in north central Michigan. The plant will occupy approximately 750,000 square feet under roof. The 170-foot long by 10-foot wide Dieffenbacher continuous press line housed in it will have an annual production capacity of 424 million square feet of particleboard on a ¾ inch basis.

To put that huge production volume in perspective, Elston put pencil to paper and came up with several translations of what 424 million square feet represents, including:

• Equivalent to 13,250,000 standard 4x8 panels;

• Laid end-to-end, these panels could be used to build more than eight particleboard sidewalks stretching from New York City to Los Angeles; and

• Laid end-to-end these panels could be used to build a particleboard sidewalk around the circumference of the earth.

Plans for the operation also include installation of a decorative paper impregnation system and a pair of thermally fused laminate lines sold under the company’s new Prism TFL brand.

Grayling Plant Update
Elston says a project milestone was recently observed when the company hired Charles Mason on May 30th as a site drafter. Mason became the first of many area residents who will be hired eventually to operate the plant.

“We’ve had our internal design team of Tex Giddens, Goran Oscarsson, Manfred Timmerman and Mike Battisti working nearly full time with our strategic planning and engineering teams in South America for over a year. As the first local employee, Charles is working with this group to come up to speed on vendor contracts and also starting to support local issues in the Grayling community,” Elston says. “We will start hiring select plant leadership and construction management personnel by the end of the year.” Elston adds that ARAUCO North America is in the process of leasing temporary office space in downtown Grayling to support employees during construction planning and building phases. The facility is expected to eventually employ 250 employees.

“We are also engaged in reaching out to some of our local neighbors to personally introduce ourselves. We’re letting them know what’s going on regarding the scope and schedule of the project. Senior manufacturing consultants Matt Gibbon and Brian Sarginson have been on the ground and interacting with our neighbors to the extent possible. We’ve been very pleased with our dialogue and continue to be impressed with the Grayling community residents,” Elston says.

ARAUCO has applied for environmental permits with state and local agencies. Elston says approval is expected in mid-August.

In the meantime, work has begun to remove trees and underbrush from the building site, prerequisite preparations to add roads and utilities to service the plant. If all goes according to plan groundbreaking for the plant will commence this fall after permits are issued.

“It’s a very aggressive timetable to have the plant startup by the end of 2018. When you take into account Michigan winters, that’s really only 18 to 20 months to bring a mill of this size and capacity up to fully functional.”

Say Yes to Michigan!
Elston notes that the Grayling location is ideal for the new particleboard plant for a variety of reasons.

“The upper Midwest region – with the office furniture industry, RTA industry, cabinets and others – is the largest panel consuming region in North America. Michigan is a good fit to serve this market because it has available wood fiber, including residual wood from some nearby sawmills, and is logistically closer to many significant customers that are currently being served from suppliers much farther away.” Elston emphasizes that “The use of low value fiber that is currently underutilized in the area should be a win-win for ARAUCO, Grayling area land owners, and the community as a whole. It was a logical fit especially when you add the outstanding support we have received from local and state government agencies. Everything came together for this to be a great place for us to build our geographic footprint. We are looking forward to being an integral part of the Grayling community.”

Elston adds that the addition of TFL capacity gives customers throughout the Midwest better access to the latest Prism designs.

“This will be the first greenfield particleboard plant to be started in North America since 2001,” Elston says. “It’s very exciting for all of us to be part of the project and we are pleased and proud that the company has the confidence in us to build and operate this amazing facility in Grayling.”




 
PRISM OFFICE CONTEST SPOTLIGHTS BIG IDEAS FOR SMALL SPACES



New York-based industrial designer Zac Feltoon blew away a distinguished panel of judges with his compact, yet surprisingly versatile Totem modular office to win the Prism Pop-Up Office Competition.

The competition, organized by ARAUCO North America and Interiors + Sources magazine, showcased the new Prism collection comprised of woodgrain, solid and pattern designs each available in nine different textures. The Pop-Up competition is just one of the innovative ways that Prism is connecting with promising interior designers. Not only does the brand highlight Prism’s new and trendy designs, but it is exploring new and creative ways to use the versatile material.

Feltoon’s creation, featuring Prism’s Merit Maple thermally fused laminate (TFL) and Trupan VESTA no-added formaldehyde MDF, nailed all of the design considerations outlined in the contest’s rules. The 4-foot by 5-foot Totem workstation incorporates a sit-down desk opposite a shallower bar-style surface that encourages standing for touch down temporary work. Both the desk and the bar-style surface are full height adjustable and incorporate an induction charge station. In addition, Totem is distinguished by its natural wool felt canopy to dampen noise and a linear LED light fixture.

“All three of the major criteria outlined were met in every submission,” observes Meghan Ryan Jeske, Midwest Design Market Specialist for ARAUCO, who coordinated the competition. “We looked at feasibility, creativity and sustainability. The idea that open officing can not only be accomplished in a smaller footprint, but also adaptable and open to collaboration was a key. The jury, who was comprised of top level architecture and design leaders, and product designers for large brands such as Kimball and Watson, all agreed: the winning designs solved the challenges at hand excellently.”

Feltoon beat out some stiff competition. Each of the two runners-up showed a flair for the ingenious in their respective office pop up designs.

The second place team of Emi Day and Keyna Mulvaney of Mahlum Architects of Seattle designed the Nimble Nomad workstation, using Prism Pacaya with a Medina texture, which lends itself to a distressed feel. “We assume that work will become more and more nimble, and the most valuable workstation will be one that allows users to easily pivot between ‘heads down time’ and casual meetings,” the designers state about their creation.

Third place went to Kendra Freemont of Seattle Pacific University for her “Future of Offices,” a workstation that is literally capable of being folded and unfolded for ease of storage and portability. She chose to use Umbra, a neutral color for the desktop of her prototype design. “To achieve a contemporary look that highlights the Prism laminate desktop, I incorporated calming color with a play on modernism with metaled inlaid recycled material by 3-Form. The materials I specified also have a long lifespan with recyclable properties,” she notes.

Each of the finalists received a cash prize. In addition, the winning design Totem was showcased at the Materials Pavilion at NeoCon, the world’s largest office and commercial interiors event, held June 13-15 in Chicago. ARAUCO also displayed samples of the Prism collection, which caught the eye of contract furniture designers and specifiers attending the show.

“The Prism Pop Up Competition allowed us to embrace designers and speak to them in their own colorful language,” Jeske says. “This competition is the first to endorse the new Prism brand. TFL has been around a long time, but I think Prism casts a new shining light, making the category fresh, approachable and accessible.”




 
ARAUCO GEARS UP FOR LEED V4


Effective November 1, the U.S. Green Building Council (USGBC) will no longer register green building projects under LEED 2009 certification standards. The phase out represents a huge transition for the green building standards group that has registered more than 75,000 LEED projects worldwide.

So great are the differences between the old and new certification programs, USGBC extended the original June 27, 2015 end date for accepting LEED 2009 registrations after 61% of green building professionals polled in a 2014 survey said they needed more time to prepare for LEED v4.

Unsurprisingly, as the sun sets on LEED 2009, questions about its replacement are on the rise.

“We are receiving more and more questions about the changes from LEED 2009 to LEED v4,” says Kerry Little, Corporate Sustainability Manager of ARAUCO North America. “In particular there are increased inquiries regarding the materials and resources credits for “chemical transparency” and Environmental Product Declarations and how our products may qualify”.

To help customers get a better handle on the host of changes to LEED project certification, ARAUCO North America is in the process of updating product documentation and developing “a revised ARAUCO green-building web page,” Little says. “We will be revamping this web resource over the coming months to include information that supports LEED v4 transparency reporting requirements collectively available in one place. Environmental product declarations (EPDs), manufacturer’s ingredient inventories and ARAUCO’s Sustainability Report will be some of the information added to the site,” Little adds.

LEED v4 vs. LEED 2009
The LEED v4 standards raise the bar for building materials to qualify for LEED points, and further enhances the benefits for specifying ARAUCO wood composite panels in green building projects.

“I think there is additional credit power on the wood material side,” Little says. “The challenge is to ensure we are providing the information customers and specifiers need when using our products for LEED v4 projects. Some of the new criteria was complicated and unclear at initial roll-out. Over time the USGBC has published several addenda and added clarification which helps.”

Under LEED 2009, wood composite panels potentially qualified in four credit categories: recycled content, regional materials, certified wood and low-emitting composites.

Under LEED v4, ARAUCO offers composite wood panels that can qualify in up to five credit categories. The first four items are tied to new Disclosure and Optimization criteria. LEED v4 point opportunities include:

• Life Cycle Assessment: This new opportunity for receiving a LEED point is designed to reward use of products verified to have improved life-cycle impacts. LCA data supports wood-based products as a preferable material in this category.

• Environmental Product Declarations: Industry-wide or generic EPDs are available for particleboard and MDF manufactured in North America. Often likened to the nutritional information on a box of cereal, EPDs not only document a building product’s material contents, they also provide information on manufacturing energy use and efficiency, environmental impact of raw material acquisition, waste generation and more.

• Responsible Extraction of Raw Materials: LEED v4 now recognizes product attributes such as recycled content and certified wood under a single credit category. All ARAUCO North America products are manufactured with 100% recovered and/or recycled wood, and all of the mills are FSC chain of custody certified.

• Material Ingredient Reporting and Optimization: Look for a new materials transparency reporting platform to come from ARAUCO in the next few months for the requirements of clauses 1 and 2 of this credit. In addition, the USGBC has recently clarified requirements for the third clause of this credit, Product Manufacturer Supply Chain Optimization, which gives additional recognition to products which are manufactured with “robust” systems in place for managing risks associated with chemical ingredients. All of ARAUCO North America’s particleboard and MDF mills are third party certified to the rigorous ISO 14001/ OHSAS 18001 Environmental, Health and Safety Management System standards, and many of our major suppliers carry similar programs.

• Low-emitting materials: VESTA products meet the requirements for low-emitting composite wood as being either CARB ULEF (ultra-low emission formaldehyde) or CARB NAF (no added formaldehyde).

Green by Nature
With LEED v4, the USGBC’s focus has shifted from do less bad to do more good.

From Little’s perspective that’s a good thing for ARAUCO and its customers. The company proudly documents its environmental stewardship in its annual Sustainability Report.

“By nature, our products have always been considered a green choice,” she says. “Our products have very high recycled content, meet CARB formaldehyde emission standards – widely considered the most rigorous in the world - and have a great life cycle assessment story to tell. Even before sustainability became a widely-embraced concept, ours was a sustainable product.”

While LEED v4 is driving a lot of ARAUCO’s new reporting and green-building web updates, this information also will come in handy for helping customers spec products to meet other environmental program requirements such as those of the Green Building Institute’s (GBI) Green Globes certification and the International Green Construction Code (IGCC).

“Our products remain the same sustainable products that they were under LEED 2009 but we are getting geared up to provide a lot more information for our products as they relate to LEED v4,” Little says. “Everything we are working on - from materials transparency reporting platforms and annual sustainability reports to our new green product web page - is designed to provide our customers and downstream users with more information to help them meet the requirements of the green building programs of their choice.“