An upswing in housing and other construction is prompting Georgia-Pacific to invest nearly $400 million in its plywood and lumber operations in the coming years, the Atlanta-based company announced Friday.
The money will be used to expand plants and upgrade equipment in several states. In addition to Georgia, the company has operations in North Carolina, South Carolina, Alabama, Mississippi, Arkansas and Texas.
U.S builders have been on a construction binge over that last several months, according to the Commerce Department. Construction in February was at its second-fastest pace since June 2008 and permits for future construction also rose at the fastest pace in 4 ½ years.
Both single-family home and apartment construction are up, and Georgia-Pacific’s products are a primary source of materials. Georgia-Pacific, which had cut capacity during the downturn in housing construction, is also trying to meet growing demands from home improvement retailers such as Home Depot and Lowe’s.
“The markets for our products are currently improving at a steady pace,” Mark Luetters, executive vice president of Georgia-Pacific building products, said in a statement announcing the future investments. “These proposed investments would position Georgia Pacific to provide our current and potential customers with the products they need to grow with a long –term recovery in housing.”
Georgia-Pacific said the capital improvements will boost overall capacity by about 20 percent. The improvements will begin in the second half of 2014 through the beginning of 2015.
The company has invested nearly $1.5 billion in capital since 2006 for property and equipment upgrades and acquisitions, including its 2007 purchase of International Paper building products assets and 2010 acquisition of Grant Forest Products. The company is also in the process of acquiring Temple-Inland Building Products for more than $700 million.
Georgia-Pacific, which is owned by Koch Industries, is also a major producer of paper and packaging products.